Super-Fast New Gas Turbines Make Green Energy More Viable

(Bloomberg) -- When an old gas turbine comes up for major maintenance at Origin Energy Ltd.'s Quarantine power station in South Australia, they don't do it. Instead they replace the turbine with a new lightweight version that can deliver power to the grid within five minutes of starting.

That rapid-response technology can help the company manage the transition to cleaner energy because it can quickly offset intermittent power from wind- and sun-powered generation.

“That's what we need in our portfolio to back up renewables,” Greg Jarvis, who runs Origin's generation business, said in a phone interview.

The shift from coal, which provides nearly 70% of Australia's generation, is proving tricky for Origin and rivals AGL Energy Ltd. and CLP Holdings Ltd.'s EnergyAustralia. That's partly because renewables don't always produce steady levels of power, requiring operators to backstop supply with quick-release sources. That can include batteries or so-called peaking plants, like Origin's Quarantine station, which is being upgraded with aeroderivative gas turbines.

“I've got brownfield sites right across the eastern seaboard and every one of those sites is existing transmission, which I can upgrade and put more aeros or batteries in,” Jarvis said.

As well, increasingly hot summers have lead to demand spikes on an aging grid that still suffers from blackouts. The reliability issue returned to the fore last week when the energy market operator warned that the closure of thermal coal plants in Victoria's Latrobe Valley over the next decade may result in supply shortfalls and weaken the security of the system.

That followed a report that EnergyAustralia was considering shutting its Yallourn coal power station in Victoria before its scheduled 2032 closure as a result of the state's plan to reach a 50% renewables target by 2030

Reliability Obligation

The government plans to proceed with a retailer reliability obligation that requires the generators to guarantee they have enough dispatchable power to meet demand. It has also embarked on a program to underwrite investment in new generation which focuses on gas and hydro projects that can provide power on demand.

It is important for any new generation to be located close to existing transmission lines, Jarvis said. That will help minimize the need to build costly new infrastructure, which could result in higher bills for consumers. Origin closed up 0.3% to A$7.43 in Sydney on Wednesday

And the march toward renewables will continue. Origin, which targets 25% of its generation coming from renewables by 2020, recently installed 185 megawatts of rooftop solar panels in just one month. Meanwhile, Jarvis said he will continue to invest in those super-fast gas turbines, as well as battery and hydro storage to back up intermittent solar and wind power.

“The biggest issue we need to solve as an industry is reliability,” Jarvis added. “It's the enabler for more renewables to come into the system.”

To contact the reporter on this story: James Thornhill in Sydney at jthornhill3@bloomberg.net

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark, Rebecca Keenan

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