Monthly Archives: August 2013

The Electricity Series P3 – Charges and Accounting

Here it is, the final installation in the Electricity Series. This one is a good primer for the Bidding Orders and the NEM post.

Here I go into some of the (utterly boring, but important) methods and reasons behind how you and the rest of the grid are charged for electricity use. From this flows discussion of how renewables work in this market and how the Mandatory Renewable Energy target (MRET) is calculated.

Part 1 – The Basics is available here
Part 2 – AC/DC and The Grid is available here

Domestic Users

Electricity use for domestic users is a pretty simple affair. Almost everyone just pays a flat rate per kWh of energy used. There are also some little charges associated with billing, for connections and administration, plus the fees associated with the MRET.

The only complicator is people who choose to go to Time-Of-Use (TOU) billing or have Off-Peak power. TOU will be discussed in the industrial section further down. Off-Peak power is metered separately and is only turned on over night, using cheap electricity to heat water. There’s a long tirade in your future and mine about the evils of Off-Peak power and the baseload furphy, but I’ll spare you in the short term. Just know that if you have off-peak power you’ll have 2 separate meters, which will be charged at different rates (Off-Peak will be cheaper).

Industrial Users

This stuff is actually important in the context of the impacts of a price on carbon.

Big users are charged differently to residential users. On top of the normal charges for energy used, (Energy Costs) industrial users are also charged a premium depending on the maximum demand they have for power throughout the billing period. There are a couple of similar but different mechanisms here, which can be coarsely grouped as Network Charges. So, their bill will be *roughly* 40% Energy Costs, 40% Network Charges and up to 20% administration and levies. These include some charges to keep the network operator in business and some money to cover their MRET contribution.

Energy Costs for a business are based on the time that the energy is used; ‘peak period’ varies between network operators, but is usually an 8 or 9 hour period essentially during business hours. This is the highest energy rate, somwehere in the order of 20c/kWh. Two hours before and after peak period is the shoulder period, where energy rates are somewhere around 15c/kWh. The rest of the time is off-peak where rates fall to about 10c/kWh. Weekends are off peak the whole way through.

Network charges are the fees associated with sizing the network to meet energy users needs. The theory is this; if you have a plant that runs all day at a constant rate (say 20MW) the network only needs to be sized to 20MW (plus a little safety factor). But, if you run at 20MW all day, but peak to 50MW for a half hour period, well then, even though you only use it a little bit, the network provider needs to build the network to meet your 50MW demand.

The way this charge is actually calculated is based on an energy user’s maximum demand during any 15 minute period, during peak hour. This is charged in cents per kW demand, times the number of days in a month (because it’s charged monthly).

Why this is Important – Carbon Costs

So, you can see from the above, that the cost of the actual energy used only makes up about half of the cost of electricity supply to a business. If (likely, when) a price on carbon is introduced, this will only affect the cost of energy; it will not affect the cost of building and maintaining a network.

As an example then, consider a coal fired power plant. These plants produce roughly 1 kg of CO2 per kWh electricity consumed from the grid. If you’re keen, have a look here, on page 218 to see how this factor varies between States.

1kg/kWh is the same as 1 tonne per MWh (multiply them both by 1000). So, for peak power, 20c/kWh is $200/MWh. From this you can tell that 1 MWh makes 1 tonne of CO2 and costs about $200.

Now, add a price on carbon to that. Garnaut called for about $20 a tonne, other numbers put it as high as $40 a tonne. Lets go crazy and call it $50 a tonne. So, your MWh of electricity goes from costing $200 to $250.

A 25% increase.

But, since energy costs are only half of big energy users bills, $50 a tonne carbon price will only increase their bills by half of 25%; 12.5%.

All this crap about electricity prices going through the roof are the worst kind of uneducated speculation and fear mongering. If you see ANYONE talking about how a carbon price will double the cost of power, tell them they’re wrong and direct them here. It’s embarrassing how few smart people, who should know better, get this wrong. Is it cynical of me to think that some of the people that should know better actually do, and they’re being intentionally ignorant to try and score cheap points?

For comparison, have a read of this. This year Energy Australia began upgrading the network in Sydney. This will change nothing for consumers; it is a safety and reliability upgrade. No carbon reduction, no renewables, just network hardware. $18 billion, divided between consumers is ‘roughly $2 a week’. Make it $100 a year, on an average bill of say $1000 a year; 10% increase. This sort of upgrade happens infrequently, say every 3 years and that price increase is almost exactly in line with inflation. A carbon price will only come in once as a step change. After 4 years you can be pretty sure that increase would have happened anyway.

How Renewables and Greenpower get involved

From Part 2 I hope I made it pretty clear that managing the network is insanely complex. The network operator monitors in very short bursts what the frequency of the grid is and brings in and boots generators and loads as need be to maintain that frequency.

The need to switch generators on and off means that electricity from generators that can despatch instantly is worth a hell of a lot more than generators that take a day or so to warm up (like a big coal plant). So, rather than keeping a record of how much of each type of electricity each user consumes, they use retailers as intermediaries. For big users they will negotiate a price per kWh for the year and the retailer assumes the risk that it might be more than that. Retailers deal with wholesalers and even some generators to purchase the required energy as cheaply as possible. This happens in real time through the network operator who determines which generators are on and so the cost of energy from moment to moment.

The actual system is considerably more complex than that, but this level of detail is sufficient for the moment.

Currently the major mechanism supporting renewables in Australia is the Large Renewable Energy Target (or LRET, formerly the Mandatory RET). This sets a baseline for what percentage of their yearly energy use retailers must purchase from renewables. Currently it’s about 10% and will rise in a straight line to 20% in 2020. So at the moment, retailers need to purchase Renewable Energy Certificates (REC), (each worth 1 MWh) from generators to the value of 10% of the energy they sold. This cost is spread across consumers and is part of your bill. This is a ‘cross subsidy’ purportedly worth about $18B over the life of the program.

So, whether you like it or not, 10% of your power is currently sourced from renewables.

Now, I’ve been asked, a few times now, how Greenpower works in this market, and I finally understand it. The question was, if Greenpower subscriptions are greater than the LRET target for that year, does it make a difference?

I can finally answer a resounding ‘Yes’.

Noted above is the fact that the LRET requires retailers to source 10% of their energy from renewables. Greenpower is a retailer who voluntarily buy 100% of their energy from renewables. So, all retailers need to buy 10%; Greenpower buys 100%; the 90% above the LRET will be over and above the LRET for the country. So, I can honestly say, if EVERYONE was on Greenpower, our carbon emissions would drop ridiculously.

Domestic Generation

Lastly, how does the rise in domestic solar influence this equation?

There are a couple of points to consider here.

First is the interaction of domestic renewables with the LRET, then how domestic generation lowers emissions.

Recent changes to the LRET laws split domestic generation out into a separate system called the SRES (Small RE Scheme). What this means is that any certificates generated by small installations will not count towards the 20% target. So, any domestic generation will be over and above the LRET. This is good.

However, there are conundra for conscientious home generators. To be able to afford the system, a lot of people sell their future RECs to a retailer. This means that the renewable part of their electricity has already been sold and they are effectively using grid power for all their energy, because someone else is using their renewable component. To fix this (we’ve got panels on the roof) I just buy Greenpower. So, we’re contributing to the renewable % in Australia and managing our own emissions. This personal Greenwash costs us about an extra 25% on our energy costs.

Summing Up – Finally I hear you say

It’s been a rollercoaster ride, but the formal part of the Electricity Series is over. Hopefully now you know how energy is measured and moved around and why Nikola Tesla is a genius. I’m not promising this will be the last time I blog about electricity, but this is definitely the last post of this arc.

For your reference here’s a link to Part 1 – The Basics

and here’s Part 2 – AC/DC and the Grid

Questions, clarifications and cock-ups cheerfully accepted.

Until next time.

EB

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The Electricity Series P2 – AC/DC and the Grid

This is part 2 of what is likely to be a gripping trilogy of posts on how electricity is made and moved around Australia. Part 1: The basics is available here.Part 3 – Charges and Accounting is available here

Today we wind up the technicality a bit with a discussion of the differences between AC and DC power and why AC was chosen to power the grid. Once you’ve got your head around that we’ll move into how the grid is managed and why.

The Two Different Flavours of Current

In the early days of electricity research and designing networks for cities (late 1800’s), something of a war went on between Thomas Edison and Nikola Tesla, two pretty stout minds in the field of electrical research.

Edison, seriously famous American inventor was in favour of direct current (DC) for distributed networks, mostly because he held patents in most of the DC equipment.

Tesla, famous Serbian engineer (who emigrated to the States to work) favoured alternating current and legend has it the two men banged heads pretty vigorously over this one. I would have liked to be a fly on the wall then! Those same legends also have it that they were both awesomely eccentric and stubborn men too.

This begs the question: Why is it even important enough to argue about?

Direct Current and Alternating Current

When electricity passes through an object, say a light globe, it interacts with the materials in it and converts some electricity into another form of energy. It’s not overly relevant, but I’m pretty confident there is ALWAYS heat lost as part of this interaction, plus some of what you actually want, such as light in the case of the light globe.

In a direct current circuit the electricity flows (as always) from high potential to low potential, and this direction is constant. Batteries are the classic example of DC operation. As discussed in P1, one part of the battery is high potential, the other low potential, and the energy essentially drains from high to low, like letting water out of the bath. There is no mechanism for it to come back the other way. Once the high potential end is no longer higher than the low end, you’ve got a flat battery.

But DC doesn’t necessarily need to complete its circuit through a battery, it just needs to flow from high to low. If the connection is good enough and the potential difference great enough DC will flow straight into the ground. This is exactly how lightning works.

Alternating Current is a slipperier concept altogether. But, once you’ve got your head around it, the mechanisms governing the rest of the grid make a lot more sense.

Rather than going in the same direction all the time, Alternating Current, as suggested, switches direction periodically, a characteristic of the power known as frequency. We’ll come back to that. So, in the lightbulb example above, rather than, say, flowing always in a clockwise direction, the current flows clockwise, then deteriorates to zero, goes back the other way, then back through zero. A graph of it looks like this:

This is the sort of power that comes out of the walls in your house. You poke a plug into the wall and the top 2 pins complete a circuit through the device and the rest of the electrical network. Considering the lightbulb again, the electricity comes from one pin, through the bulb, to the other pin, then drops to zero, turns around and comes back again, through the bulb and to the original pin, where the voltage drops to zero again. Imagine this whole cycle as one full wavelength. That happens 50 times a second in the Australian grid; meaning the frequency is 50 hertz (Hz). During each wavelength the bulb goes from off to full brightness, back to off, then back to full brightness, then darkness on the return journey. But our eyes can’t perceive this as it happens 100 times a second (2 bright spots per wave, 50 waves per second), where I believe our eyes struggle to detect flicker about 30Hz, somewhere around there.

The frequency of electricity has some tangible influences on our experience of it, so 50Hz isn’t arbitrary. In early networks where electricity was applied to replace bullock and horse drawn devices, grinding, slow traction was required, which is provided by lower frequencies, around 16-24Hz. But, once this was applied to street lighting the flicker caused by such low frequency electricity was considered unacceptable. At the other end of the spectrum, higher frequencies move more energy, faster, but with a side effect of increased radiation. This would make your mobile phone reception even worse than it already is. Planes often use very high frecuency AC because they don’t care about your phone reception. Most grids worldwide operate around 50-60Hz.

The Grid

I carried on for a long time about frequency there because the concept is important. Particularly when operating an electricity network.

It’s easy to imagine how AC and frequency works with just a one generator/one load model, but as the number of generators and loads go up, it gets complex fast. Here’s where my new analogy comes in.

Every wave cycle on the grid, EVERY generator is pushing the same direction and every load is using that generation in the same direction. Then the current reverses and everyone pushes in the opposite direction, and all the loads use electricity in the opposite direction. This means the actual location of the generator is of very little relevance. It’s all about the combined effort pushing in the same direction.

One way to think of it is one of those old school, properly dangerous, merry-go-rounds from suburban childhoods:

This one will do.

Imagine that anyone pushing the MGR is a generator and anyone wanting to get on is a load.

Assume it always spins at the same frequency, like the grid. As people get on, the mass increases and the size of the pushes needs to be bigger to maintain frequency.

More than anything, this illustrates the importance of frequency in a grid. Anyone that tries to push at the wrong time, or in the wrong direction is going to get belted. Ditto any load that tries to get on out of synch with the grid.

One of the hardest things in renewable (in fact any) energy generation on a small scale is synchronisation. The grid is so big and ‘heavy’ (momentum is a useful similie for a high-energy grid) that anything trying to connect will BECOME the frequency of the grid; there’s no way a small generator can influence the frequency. So, get it wrong at your peril. There’s no faster way to make a motor explode than trying to run it out of phase with the grid.

Managing the Grid

The network (and we’re talking about the Australian East coast, Tassie and SA, there’s no connector across the Nullabor) is managed by AEMO; The Australian Energy Market Operator. Their job is 2 fold; make sure the network keeps running and to organise the market for electricity.

Keeping the network running, their most important task is maintaining frequency. If the frequency gets weird you could wreck a lot of generators very quickly, crashing the network not just momentarily but for a LONG time. They manage this by bringing generators on and booting loads off, if the need arises. It’s managed in real time, with the accounting done after the fact.

So, Why AC Again?

This is the part where Tesla become a genius and Edison a stubborn old bastard looking to protect his patents and income.

A national network MUST be AC, so that the distribution of generators and loads is less crucial. That way you can hook in anywhere and contribute; DC you always need to be upstream of the load. Tesla knew this and pursued it accordingly.

So the grid is AC for a couple of major reasons;
1. Distributed generators and loads. As discussed extensively above.
2. It’s EASIER to generate AC power from rotating machinery. I could go into the physics, but it might make your head explode?

There are others, but they’re getting a little esoteric.

Bonus Question

So, what’s 3-phase power then?

Once you’ve got your head around AC power, you can see there will be times there’s effectively no power. This is overcome with 3-phase power.

The power described in the examples above is 1-phase; just one wave, wobbling back and forth all by itself. You can improve the flat spots, by making machinery that uses 3 different circuits at once; 3 phases. They don’t come down the same wires, but in separate ones, co-ordinated by the generators. Each wave is a 1/3 of a wavelength behind the other, as shown below:

Assuming for simplicity’s sake that a wave at the top of its curve is maximum power, see that 3 waves gives a lot more time at full power? In the Merry-go-round analogy it effectively means 3 times as many handles to push; more opportunities to provide energy. This is why 3-phase welders are the envy of shed oriented men everywhere.

The Postscript

I’ve wrestled with this post for an age. I know this stuff pretty well, but I always think about it in terms of maths; integrals and rates of changes. How’d this go for you? It’s big and difficult stuff, but sort of important. Well it’s important to me anyway. But once you know this, it refutes some of the common misconceptions about the grid; like Dave’s (totally valid) question about the location of generators and the type of electricity he gets. It doesn’t matter where you are, or what electricity you use. It’s all about the energy contracts and who you’ve chosen to go with.

And so, next post will look at how you are charged for energy, how big users are charged for their connection (it’s different to residential users) and how renewables are calculated. I will also answer the question of how Greenpower contributes in a MRET world. That’ll get the punters in!

Part 3 also available here.

Questions, as always, appreciated.

EB


The Electricity Series – Part 1

This is an old series from my other blog, that probably belongs here more than there.

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You might find this hard to believe, but I am regularly asked to explain how electricity works and in particular how the grid works. I’ve been thinking about and answering this question for a while so it’s probably time I formalised a response. Here goes. As always, questions and comments greatly appreciated.

This will be the first post in a series of posts on electricity, how the Australian grid works and is managed, and some of the basics around renewable energy and how it is accounted.

Part 2 – AC/DC and The Grid is available here
Part 3 – Charges and Accounting is available here

I’m going to skip the actual physics of how electricity moves around. It’s too hard, really, and of little consequence. But one point; considering the movement of electrons will not make understanding electricity any easier for you. Just remember ‘electricity’ (whatever that is) flows from areas of high positive potential to areas of lower potential.

Lastly, apologies to the nerds out there, but I’m not going to include any formulae. Unless your maths is pretty strong, they’re unlikely to aid your understanding. In any case, if your math is strong enough that Maxwell’s equations improve your understanding of the world, then this guide is a little below your level…

Circuit Basics

Electricity always flows in a circuit; from areas of high potential to areas of low potential. In a torch powered by battery, the battery has a high potential end (which the electricity comes out of) and a low potential end, which it flows too. Put things in between (like a lightbulb) and you have the ability to make things happen (formally called work). But without the ability to move from high to low potential, nothing, I repeat NOTHING will happen.

That’s why birds can sit on electric wires without anything happening. When they sit on a wire, it’s HEAPS easier for the electricity to continue through the wire, rather than up one leg and down the other. However, if the bird was wearing, say, a large, floppy, wizards hat made of alfoil, and this hat touched another wire, then our bird is in trouble. Suddenly there’s a nice short path to an area of lower potential so the electricity is going to go there. Fast. The bird would likely explode.

Voltage and Current

As electricity moves around, there are two major descriptors to consider; voltage and current.

Voltage is essentially the desire electricity has to move between two points. Voltage must be measured ‘across’ or ‘between’ two points; it is always a relative measure.

High voltage means the electricity wants to move A LOT. So, as the voltage goes up, the normal restraints of wires become ignored. The electricity wants to move so much it can leap across gaps; the higher the voltage, the larger the gap the electricity can leap across. Lightning has enormously high voltage; the gap in this case being the distance between the sky and the ground. Voltage is also what makes substations dangerous; current is easy to avoid; just don’t touch the wires. But big voltages are a bit scarey. An 11kV (11,000V) transformer could electrocute you from ~30cm away. Spooky.

Household voltage in Australia is 240 Volts (240V). This was chosen to balance safety and power delivery. Higher voltages mean higher rates of energy delivery, but the reverse of that is a bigger kick when you grab the bare wires of the iron one day.

Current on the other hand, is a measure of the amount of energy in the electricity should it start moving. This measure is called an ampere, amp or just A. It’s a bit of an odd one though; current is demanded by an item, not pushed by the electricity. You flick on a 10A kettle, and the kettle is going to draw 10A. Put 2 kettles on the same plug, and they’re going to demand 20A.

When circuit breakers on your house flick, or a fuse is blown, that’s because there have been too many items demanding amps at once. Voltage stays the same around a house; it should be very close to 240V everywhere in your house. But, since current is the movement of energy, put too much of it in a wire and it will melt, then catch on fire, then burn your house down. So, to stop people demanding so much power that they burn their house down, circuits within a house are limited in the amount of current they are allowed to draw. So, 5 powerpoints might be on the same circuit, with the whole circuit protected by one circuit breaker or fuse (circuit breakers are the modern replacement for fuses, but they behave effectively the same). Plug a toaster, kettle, washing machine and bar heater into the same circuit and turn them on all at once and you’re likely to demand too much current. The circuit breaker will ‘trip’ and you’ll be outside with a torch playing around in the fuse box.

When you get electrocuted it’s current that kills you, rather than voltage. You can have quite large voltages (up to kilovolt range and beyond) but extremely low amps and survive a shock (like an electric fence). But, drive the current up above 5 or 10 milliamps (mA) and you can stop a heart.

The Water Analogy

Is the usual way to explain electricity, particularly the basics; ie how voltage and current are related. For this post I’ll just mention it here to try and help fill in some details, but otherwise I’ll use a different analogy altogether; one I invented to explain how the grid works.

Anyway, the water analogy is simply this; in a pipe full of water, the pressure can be considered analagous to voltage and the flow rate, or pipe size, analagous to current.

The whole analogy falls down when you try and think about alternating current anyway, so I’ve never really understood the appeal.

Power and Energy

Now this is a concept I wish more people understood.
This. Stuff. Is. Important.

Power Is an INSTANTANEOUS descriptor of an item’s ability to do work. It is measured in watts, kilowatts (kW), MW, GW… so on. Power is the result of both voltage and current; pick 2 items that operate at the same voltage, one draws 10 amps, the other draws 20 amps. It can be said that the second one is twice as powerful.

I know I said there wouldn’t be any formulae, but this is worth it. Power is the product of voltage and current. If you’ve got a voltage of 240V and current at 10A then power is 2400 Watts. (2.4kW)

Power is a promise, not a guarantee. It is a descriptor of what something is capable of, not what it is doing nor has done. A 2.4kW kettle has the capacity to draw that much power when going absolutely flat out.

Power is both produced (by generators) and used (by machinery, lights etc). In either case though, it can only be used to describe an instant.

Understanding the difference between power and energy is critical for thinking about the electricity grid.

Energy Is power, over a period of time. Electrical energy is generally measured in watthours, kilowatthours, MWh, GWh, etc

One kWh is the amount of energy used if a 1 kW motor runs flat out for 1 hour. An average compact flourescent light globe (CFL) uses 10 watts; run it for an hour and it has consumed 10 watt-hours; 100 hours and it’s consumed a kilowatthour.

Energy is what is measured on your electricity bill. It’s a combination of the rate at which you use power (so brighter lightbulbs use more power) combined with using it for a longer time (you pay more if you leave the lights on). This is usually charged in cents per kWh.

……..

And I’ll leave this one there.

The next step is the grid, which will need to open with a discussion of the difference between AC and DC power, which will obviously lead to discussion about how Nikolai Tesla is one of the sharpest minds ever to have lived. But once we’re talking about AC power, a lot more interesting things can be discussed. So, AC/DC and the Aussie grid should just about be worth a post in its own right.

Following that there’s scope for discussion on how renewables integrate with the grid and how they are accounted for. Thrilling stuff I know, but if more people knew this, my job would be so much easier.

EB