1. Preparing for driverless cars

Leaders from federal and state road and transport agencies, motoring clubs, local government and engineering and industry groups met in Brisbane in August to consider how government and industry can better collaborate to ensure a smooth transition to the world of connected and automated vehicles.

They are expecting partially automated vehicles on public roads before 2020, and highly automated and driverless vehicles within the ensuing decade.

They agreed to three key principles:

• achieve national consistency around the regulation and operation of connected and automated vehicles,
• lay down the ground rules early, before the horse bolts, and
• understand the value chain created by automated vehicles, and how it will be captured.

2. The Perfect Storm

Andrew and Petra Stock have done a 32-page report for The Climate Council analysing what the SA gas companies did during the SA power price spike in July.The main game was profit maximisation by the gas companies – AGL and Origin – taking advantage SA’s peak winter demand and the temporary removal of the Heywood Interconnector with Victoria. AGL and Origin have 80% of the market, so can jerk it around through their bidding processes. Also the charge is made that AGL made some of its Torrens Island capacity “unavailable” on the most extreme demand days to worsen the situation and boost prices.

The Stocks think an interconnector to NSW is essential and look to more competition, including from renewables.

They also do not think the role of gas is going to be positive as we look to a lower emissions future.

3. ARENA announces large-scale solar grant winners, 480MW in total

On 8 September ARENA announced the winners of its large-scale solar energy round. In all 12 projects were chosen, six in Queensland, five in NSW and one in WA.

Less than $100 million of grant money has leveraged almost $1 billion worth of investment.

The average funding required for the projects was just 19c a watt, which was below the 28c/watt revealed in June and the $1.60 a watt needed to build Australia’s first big solar projects. Project costs have fallen 40 per cent since the start of the process.

It seems that some projects were being held up to see if they struck it lucky in the ARENA round, but will now go ahead anyway.

4. Two big solar plus storage projects

One such is Lyon Solar at Roxby Downs in SA. Lyon Solar says it will now build what will be the largest single large-scale solar and battery storage facility in the world – a “minimum” 100MW of solar PV paired with 100MWh of battery storage near the BHP-Billiton project at Roxby Downs. They announced another one at Lakeland in North Queensland.

Both are at the extremities of the national grid, which should avoid enhancing the remote transmission lines.

The battery systems are being developed by AES, who they say are “the world’s most experienced energy storage providers”.

5. COAG reforms

I missed the outcomes of the COAG meeting in August to discuss power production strategy post the SA price spike. This article, looking at the implications for APA, the owner of 75% of gas pipelines in Australia, seems to imply that the future is in making more gas readily available. Issues concern the lack of available capacity in the pipelines to meet emergency needs, and a lack of transparency from companies about reserves. The bottom line seems to be that export yields the best prices, and there isn’t a lot of new gas around. Moreover, renewables will be more competitive, especially if there is a price on carbon.

6. South Australia goes to the market

SA has launched a tender for 75% of future power supply, but this article suggests that the dice is loaded towards gas.

Bizarrely, the Pelican Point gas generator, which was built 17 years ago and had been mothballed because its owners saw bigger profits selling gas into the export market, will be allowed to bid into the tender, despite not strictly being a new competitor as it has been operating again since July.

SolarReserve wants to build six large solar tower power plants with molten salt storage in SA to provide clean, dispatchable electricity to the state’s grid. The power plants:

could account for one quarter of the state’s power needs, keep a lid on power prices because of the zero fuel cost, and provide 24,000 jobs during construction.

They need to get the first one up at Port Augusta in this tender, or the whole project will probably not happen. A problem is that the tender is only for 10 years, whereas 20 years would be required to amortise construction costs.

Meanwhile a new report suggests that solar, wind and biomass on Kangaroo Island, with battery storage, would cost roughly the same as upgrading the connector to the mainland. If they are game, and if they are allowed to.

7. ARENA saved?

The LNP had promised before the election to cut the final $1.3 billion remaining of legislated ARENA grant funding, to be replaced by debt/equity funding in the Clean Energy Finance Corporation. Labor, in this week did a deal as part of the Omnibus Savings Bill which they thought saved $800 million of the ARENA funding without curtailing CEFC funding, to find within hours Cormann saying there would be corresponding cuts to the CEFC.

I think Giles Parkinson has the story. Cormann was either confused, or trying to pull a swifty. His choice was to stick with Labor’s understanding or try to convince Xenophon and the rest. So he backed down becasue he needed the win on his Omnibus savings and any change to ARENA funding would require senate approval.

Adam Bandt of course took the opportunity of calling Labor “clean energy charlatans”.

Labor had in fact included the defunding of ARENA in its budget ‘saves’ before the election, and had said it would stick with whatever it took to the election during this term. So in one sense they were finding a way to lessen the initial atrocity.

I understand the Omnibus Savings Bill passed the Senate last night 40 to 14.