The Green Grid is a major initiative commissioned by RenewablesSA to unlock major green energy investment in South Australia. The study, prepared by a consortium of Macquarie Capital, WorleyParsons and Baker & McKenzie, has established a viable business case for investment in transmission and generation to unlock large scale renewable energy generation in the Eyre Peninsula region of South Australia.
Green Grid Study - Overview Provided by WorleyParsons
Australia is a large continent, and it has a correspondingly wide range of climates. The weather can range from below zero temperatures in the Snowy Mountains to intolerable heat in the north west. Australia's large wind resources, for example, exist mainly on the south and west facing coasts. The Eyre Peninsula in South Australia is one of these areas.
Covering an area roughly the size of Ireland, the Eyre Peninsula is on the fringe of the existing Australian electricity network and, with just over 50,000 people, is sparsely populated.
In a project known as the Green Grid Study, WorleyParsons teamed up with financial firm Macquarie Capital Advisors and legal firm Baker & McKenzie to examine the business case behind large scale grid investment to unlock the renewable energy potential of the Eyre Peninsula.
The study, funded by the South Australian Government, focused on planned regulatory changes by the Australian Energy Market Commission aimed at providing a network framework under which such regions could be unlocked, as well as the value of the energy generated which would be traded on the Australian Electricity Market.
The study initially focused on what renewable energy resources were available, eventually concentrating entirely on the wind energy potential as this was seen as the most likely near term deployment prospect in terms of its excellent wind resource, generated price and technical maturity.
WorleyParsons undertook all technical components of the study. This covered quantifying what the wind energy potential was across the region, involving geographic information system analysis using sophisticated mapping analyses across such constraints as social, wind resource, engineering, land use and tenure. An enormous wind energy potential was uncovered - more than 10,000MW of commercial prospects with commercial capacity factors (>35%) - which were eventually consolidated into the most prospective four “zones” of 1000MW.
We then designed and optimised a transmission network solution to unlock these zones, including the integration into the existing grid. It was an exhaustive exercise involving static and dynamic analysis across a wide range of solutions, including significant augmentation of the existing network up to 1000km away from the Eyre Peninsula into other States of Australia. Our analysis considered a wide range of solutions, including energy storage and very long HVDC connections, but eventually established and costed almost 1000km of new 500kV transmission assets.
Macquarie Capital Advisors were able to use this information to develop and present a business case behind such grid investment within the regulatory bounds assessed by Baker & McKenzie, with the result a positive one for 2000 MW of wind farm development on the Eyre Peninsula.
This result indicates that under certain regulatory and resource conditions the strategic investment in purpose designed transmission solutions to unlock the best renewable resources is a better alternative than more organic renewable energy growth.
Further, the study shows the important interplay between regulation, technical issues and commercial imperatives that are just part of the renewable energy challenge. The search is now on for the right business structure to see the much needed future Green Grid concept for clean, renewable resources such as solar and wind power move into greater deployment, the ultimate end game of such work.
Green Grid Report - Unlocking Renewable Energy Resources in South Australia (4.7 MB)
In December 2010, the Green Grid Forum comprised of the private sector parties which have expressed an interest in the Green Grid project and RenewablesSA provided a submission to the Australian Energy Market Commission's Options Paper consultation process on Scale Efficient Network Extensions. The proposed regulatory framework is important to the commercial case for the proposed Green Grid investment of 2,000 MW of wind power generation.
Cover Letter to Australian Energy Market Commission
Macquarie Capital Report to Green Grid Forum
In March 2011, the Australian Energy Market Commission released its draft determination on Scale Efficient Network Extensions. A response was provided by the Commissioner for Renewable Energy on behalf of the Green Grid Forum.