Two years on - 100% renewables

With another year done and dusted, I thought I’d take some time over the break (tragic that I am) to revisit how City of Newcastle’s (CN) renewable electricity supply contract had fared in it’s second year of operation. Having taken a good look at the first year of operations here – 100% Renewables – A year in practice, the silver lining was that a lot of the analysis tables were already set up and just needed an update. As a quick recap, City of Newcastle operates a dozen large sites such as the works depot, admin centre, libraries and Art Gallery as well as over 200 small sites and more than 14,000 street lights and in 2020 became the first council in NSW to switch to a 100% renewable electricity contract. The contract is a retail power purchase agreement (PPA) through Flow Power, with Sapphire Wind Farm as the renewable generator.

In addition to this contract, CN operates a 5MW solar farm at its landfill site, is approaching 1MW of rooftop solar and around half a megawatt of battery storage soon to be operating.

Two years in, what’s the story?

 Firstly, from an emissions reduction perspective, to reach 100% renewable electricity, CN uses a combination of renewable certificates (LGCs) self-generated from the solar farm and large rooftop systems and then sources the gap from Sapphire Wind Farm or the market. In future this could provide an opportunity to further support local renewable generation by buying additional LGCs from community renewable projects.

The focus of this analysis though is on the actual supply of renewable electrons through the PPA and how this matches day to day against CN electricity consumption at its sites. While not there yet, ultimately the goal would be a load and supply balance matched on a 5-minute basis (or the holy grail, instantaneous matching). That is, to have enough renewable electricity or firming to meet 100% of CN’s electricity requirements around the clock. What this 2nd year edition shows again though, is that firming requirements, at least to get a very high matching (if not 100%) are not as big as you’d think, but we’ll get to that later.

Financial Performance

In it’s first year of operation (2020), CN’s renewable contract resulted in a cost reduction of 12.15% against the business as usual (BAU) contract reference price while achieving a supply of 100% renewable electricity. Year two did not perform as well due to two main factors, a reduction in the year 2 BAU fixed contract price (received at time of tender) and the subsequent market volatility that occurred following the explosion in May 2021 at the Queensland Callide coal-fired power station. Despite this significant event, over the course of a year the difference against BAU all told was -2.51%. Working as intended, the wind supply contract also provided excellent coverage and returns through May – July.

When looking though at the cumulative position against BAU since 2020, the renewable PPA contract is still tracking 6.28% ahead.

Matching Renewable Generation with CN load

In the aggregate, over the course of the year there is more than 100% renewable electricity available to meet CN’s electricity load, however, as with the 2020 data review, I looked at each of the half-hour intervals over the 12 month period in 2021 to look at the supply and load balance between renewables and electricity consumption. With the change to the 5-minute settlement market in October 2021, drilling down to 5 minute intervals would make sense going forward.

While there was a fair bit of data to crunch, the table below summarises some of the headline figures:

When adding in supply from CN’s Solar assets (both rooftop and solar farm):

It is again easy to see the benefit that a hybrid source of wind and solar provides in matching the load profile and compared to 2020, there was roughly a 2% improvement across these figures. While some of this was due to reduced load from Covid impacts, the main reason was through reducing evening street-lighting load after embarking on an upgrade of a further five thousand street-lights to LED which I wrote about here. A number of battery projects which are still to be brought into operation will further improve the supply/load balance.

As shown above, when utilising a hybrid solar and wind generation source (effectively without firming) 76% of the time the renewable energy supplied CN’s load requirements on a half hourly basis. Deploying local battery storage, demand response and time-shifting non-essential loads can further bridge the gap but it would be interesting to also consider how electricity supply from more than one wind generator (in this case Sapphire) would affect the supply/demand match.

Of the unmatched load though, I was also interested in what the spot exposure was like or looking at it another way, what dollar value firming might have had.

The 2021 NEM NSW spot price average for the calendar year was $72.62/MWh (give or take and happy to be corrected) but the average price during periods of insufficient renewable coverage was closer to $80/MWh for the Wind PPA or $97.68/MWh for the Solar and Wind gap (with the fewer periods of undersupply). Given it wasn’t a flat load during these periods though, I also looked at the actual consumption and effective cost in each of the half-hour intervals, finding that the average $/MWh spot exposure for undersupply from wind was $99.24 and for the solar/wind mix it was $110.57/MWh.

So what role for Batteries?

While I again ran out of time and brain capacity to fully investigate how battery storage could improve the situation looking at each half hour interval, I did run a few simplistic scenarios with various battery sizes on a single cycle per day. i.e. starting the day full and discharging throughout the day, rather than running multiple charge and discharge cycles.

Looking at the daily supply balance, the starting point was:

So in the current situation, with no real firming, there was only 22 days in the year that there was not enough renewable generation currently in place to meet demand and the longest stretch of insufficient supply was 9 days.

Looking at a few options, I added in scenarios for a 1MWh and 5MWh battery (2MW discharge) and found that the days of generation undersupply reduced from 22 down to 15 and the longest consecutive stretch of ‘Negative’ days dropped from 9 down to 3.

While not yet the holy grail of 100% firmed renewables, in this case at least for a relatively small addition of battery storage (compared to overall annual load) it gets exceedingly close. Where it really gets interesting though is in future opportunities not just for large static battery storage but in utilising CN’s other assets while not in use – fleets of electric vehicles and trucks that could provide short periods of discharge in the evening peak when the depot shuts and then recharge later in the evening. With CN soon to take delivery of a SEA-Electric tipper truck with 136kWh of battery capacity and actively investigating converting the waste fleet to EV garbage trucks, when you start to consider the aggregated potential of all these batteries, 5MWh+ of battery storage to firm the city’s renewable electricity supply starts to look like an achievable goal and moving to 100% firmed renewables doesn’t seem that far out of reach.

*While all care has been taken in analysing and presenting the results, ultimately it was an academic exercise undertaken out of interest and should not be relied on for any particular purpose.