Power shares

[fish]

Additional gas storage could provide about half the dry-year cover offered by the proposed $4 billion Lake Onslow pumped hydro scheme at about 5 percent of the cost, energy executives heard yesterday.

Gas Industry Company chief executive Andrew Knight said the Lake Onslow project being studied by the government to provide a long-term dry-year reserve is a “good benchmark” to test alternatives against.

The country has a choice to spend “$4 billion plus plus plus and build a big lake” at Lake Onslow in Central Otago or spend a “couple of hundred million” building additional gas storage, he said.

“That’s the discussion we need to have,” Knight said in a panel discussion at the energy sector’s Downstream Summit in Wellington yesterday.

[Jantar]

Additional gas storage could provide about half the dry-year cover offered by the proposed $4 billion Lake Onslow pumped hydro scheme at about 5 percent of the cost, energy executives heard yesterday.......

See post #637

[Snoopy]

The Ahuroa Gas Storage, built by Contact, can store up to 18 PJ of gas. To put that in terms of electrical storage, that is the equivalent of 1800 GWH of electrical energy and cost just shy of $400 M. So at first glance it looks like a cheaper option than Onslow. But that is not renewable, and it cannot be used to buffer intermittent generation as easily. Where it is used it is still only in a ratio of 1:1, not 1:2, so 2400 MW of fast start gas fired plant would be needed to do the same job as Onslow.

It also uses gas to run the compressors to feed the gas into the field, and uses more gas to heat the gas coming out of the ground. To recover that 18 PJ of gas actually requires buying 27 PJ of gas off the market between compressing and re-heating. Thus gas from storage being used as generation has a much higher marginal cost than gas purchased directly from the well.

Add in the Opex for gas fired plant and it becomes quickly obvious why electricity prices spike up to the hundreds of dollars per MWh even when there is no overall shortage. Opex for CCGT plant like at Huntly or Stratford is very high, around $40 per MWh plus fuel cost, while Opex for hydro plant is around $2 to $3 per MWh. Hydro fuel is nil for normal hydro plant, but will have a cost at Onslow.

You talk about 'cost' Jantar. But isn't it the 'price' that the gentailers pay for gas that is the key figure? 'Cost' and 'price' are not the same thing. If you need gas to run your power station you will almost certainly have a 'take or pay' supply contract. If a generator puts their gas into the Ahuroa gas storage site, it is because they have no use for that gas at the time the gas was put in. So the marginal cost -to our electricity generator- of that gas is now zero. Yes they may have to pay the owners of Ahuroa to store it, and I presume that payment would cover the costs of pumping the gas out again. But these charges are the whole price of gas supply to our generator. There is no 'price of gas' to be added because the alternative - to not take the gas in the first place - would still see the generator charged at the same price as taking the gas. IOW the gas once it is put into Ahuroa is 'free gas' from our generator's perspective.

SNOOPY

[Snow Leopard]

Just had a quick look at this Ahuroa Gas Storage and at 18PJ it holds about 25 times more gas than the APA Dandenong LNG Gas Storage on the site where I used to work for a while before I 'retired'.

Interestingly the smaller Dandenong facility has a 5 times greater rating for supplying gas.

PS: Just noticed that the two facilities use the term injection for opposite things!

[Davexl]

... An articles the other day was suggesting Fonterra could be a potential customer for manapouri's power. I don't think this is super likely because they wont want to pay the electricity prices but it does go to suggest, a customer(s) will arise to take up the power. Whether it be an existing industry or a new one we aren't aware of yet.

That's some of my thoughts anyway.

Fonterra favours wood over electricity for emission reduction

https://businessdesk.co.nz/article/f...sion-reduction (Paywalled)

"...But she said that even with lower power prices and low or no transmission costs, the South Island electrification projects still needed a carbon price of about $100 a tonne to be economic. With no assistance, the average cost of carbon abatement across its South Island sites was “well over $200” a tonne.

NZ carbon units are currently selling for about $34 a tonne. The new auction scheme being introduced to the emissions trading scheme is intended to cap prices at about $50 a tonne...."

...

"Last month, Fonterra said it would replace coal at its Stirling plant near Balclutha with wood. The company had previously been considering using electricity.
Thompson said the cost of installing an industrial-scale heat pump at Stirling was estimated at $10 million.
As well as the unit itself, the plant’s reticulation systems would have to be converted from steam to hot water. New process heat exchangers would be required, along with new piping and the plant’s chiller room would also have to be extended.
Installing an 11-megawatt electrode boiler was estimated at $15 million – about $9 million of which was the cost of upgrading the site’s electricity supply. Operating costs would also increase by about $3 million a year, she said."

Looks like Fonterra is pretty much wood only for its South Island plants.

Unless the Govt can raise the carbon price higher, by mandating electricity use for carbon offsets in some scenarios?

[Jantar]

You talk about 'cost' Jantar. But isn't it the 'price' that the gentailers pay for gas that is the key figure? 'Cost' and 'price' are not the same thing. If you need gas to run your power station you will almost certainly have a 'take or pay' supply contract.....
SNOOPY

I can't speak or all generators, but Contact did away with most take or pay gas agreements some years ago. They now use ROFR contracts and short term gas contracts. Genesis have an interest in Kupe so also have very little take or pay gas. It was the take or pay agreements that Contact inherited that made the now decommissioned Otahuhu power station appear to be worthwhile, but also the cause of burning gas flat out while spilling water at hydro stations

Only 1700 GJ of gas can be injected per hour or recovered from Aharoa per hour but that 1700 GJ in requires 2300 GJ purchased from the market. That is about half of what TCC or Huntly U5 combined cycle plant uses. If gas is bought from the market at a price of $7 per GJ then the fuel value to generate with it later it is $9.40 per GJ. This is therefore the fuel cost for the GT or CCGT that is using it. The operator of Aharoa will add an operating charge on top of that.

[Getty]

Ah, if only we had a bit of Nuclear...
Just so there's no confusion or division,
I don't mean fusion, I mean fission...

I recently checked out the Marsden site by Ruakaka, and its still at the ready.
The other site under consideration is Blackhead Beach in Hawkes Bay, and its almost ready...

[Jerry]

Ah! Blackhead beach, favourite holiday site of Waipukerau, likely recipient of a 12m high Sendai-type Tsunami sometime in the not too distant. Don't talk about fission in NZ it would be madness, given our Geology.

[bull....]

genesis boss reckons smelter might not close

https://www.stuff.co.nz/business/122...r-hydro-spills

[Getty]

Ah! Blackhead beach, favourite holiday site of Waipukerau, likely recipient of a 12m high Sendai-type Tsunami sometime in the not too distant. Don't talk about fission in NZ it would be madness, given our Geology.

Ah, we've learnt a bit since Fukushima...