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Report: Energy and Resources; Powering State Growth

Written by | Jun 25, 2024 4:08:24 AM

In June 2024, the Queensland Futures Institute’s Energy and Resources; Powering State Growth Forum outlined Queensland’s ambitious plans to integrate renewable energy, focusing on the Queensland Energy and Jobs Plan. The discussion underscored the importance of collaboration between industry and government to achieve emissions reduction targets and maintain economic prosperity during the transition.

 

SPEAKERS

   

Kieran Cusack 
Chief Executive Officer
Queensland Hydro

James Harman
Chief Executive Officer,
EDL

Janette Hewson
Chief Executive Officer
Queensland Resources Council

Mark Scott
Chief Executive Officer
Hastings Deering

Professor Paul
Simshauser AM
 
Chief Executive Officer
Powerlink
MODERATOR -
Tahlia Nolan
General Manager Hydrogen, 
Iberdrola Australia
 
 
SUMMARY OF PANEL COMMENTS
 
  • Queensland’s energy transition will require significant infrastructure development – including up to
    6 gigawatts of long-duration pumped hydro storage and 25 gigawatts of wind and solar resources.
  • Delivering this transition will create opportunities for the Queensland economy across the energy
    and resources sectors. The state will play a significant role in delivering reliable, affordable and low
    emissions energy to support decarbonisation efforts of Queensland industry, communities, the rest of
    Australia and our energy export partners.
  • However, there are significant challenges in achieving the pace of the transition required and reaching
    a high penetration of renewables.
  • Innovative solutions will be required to deliver the significant projects – including pumped hydro –
    to operate the system and support the decarbonisation of remote mines and communities
    across Queensland.
  • Long-duration storage – as well as sustainable fuels – will also play a critical role in supporting high
    penetration of renewables.
  • This will require a supportive policy environment and collaboration between government and industry to
    effectively deliver these projects.
 
PANEL COMMENTS
 
How is Queensland Hydro planning to integrate the pumped hydro energy storage with renewable
energy resources to provide the electricity supply for the State?
 

 

Keiran Cusack

  • The Queensland Energy and Jobs Plan will require 6 gigawatts of long-duration
    pumped hydro storage, 25 gigawatts of wind and solar resources and a transmission
    super grid.
  • Queensland Hydro already has two projects underway: Borumba – which is in EIS
    phase, with exploratory works to start after approvals – and Pioneer Burdekin, the
    business case for which is to be delivered to the government shortly.
  • Pumped hydro is fast, flexible and reliable, providing secure power 24/7. This
    reliability is crucial to the renewable energy transition as variable renewable sources
    like wind and solar are deployed.
  • Uruguay is an excellent example to illustrate how renewable energy targets can be
    achieved, given its population of 4 million and its history of oil and gas. The country
    has successfully integrated 100% of renewable energy into the system in only 10
    months – utilising pumped hydro, wind and solar, as well as a carbon tax.
  • This level of renewable penetration requires a system with deep storage, variable
    renewable sources, and an efficient grid.
 
How is your organisation preparing to handle this integration of diverse renewable energy
resources and new loads like green hydrogen while maintaining grid stability?

 

Prof. Paul Simshauser AM

  • Queensland has the world’s longest and stringiest grid – which makes integration complex.
  • To maximise power system availability, Powerlink has the ability to work on live substations – a globally unique operational decision shared only with Electricité de France.
  • The Queensland network was originally built to support 11 generating sites (coal and hydro), but now has over 74 generators across the state. This is a significant operational challenge.
  • In its role, Powerlink has adopted innovative operational strategies, such as the Wide Area Monitoring and Protection Control (WAMPAC) system, to manage the grid more effectively. This allows circuits to be run at higher utilisation through credible contingent events such as lightning storms, switching in less than 160 milliseconds in order to maintain stability if a lightning strike occurs. Powerlink is again one of the first two operators globally to utilise this innovation – the other being Southern California Edison.
  • Innovations like this help manage the grid’s increasing complexity and maintain stability.
  • Powerlink has done well to enable renewables – exemplified by the state’s northern grid (above Mackay) having the highest renewable share globally – higher than Denmark.
  • Given this high level of renewable market share, Powerlink has had to address new challenges in operating the grid due to complexities with inverter-based systems. This has led to innovations in system strength and system operations.
  • Generators are also dealing with these challenges. For example, Vestas – a leading
    turbine manufacturer – pioneered a wind farm control solution for system strength
    with a Queensland wind farm, applying it across its global fleet. This demonstrates
    Queensland’s role in pioneering solutions for system management.
  • Queensland also has the highest rooftop solar PV take-up rate in the world, which
    also presents network challenges.
  • Powerlink engineers are continuously solving these complex problems, ensuring grid
    stability and enabling the integration of diverse renewable resources and new loads
    like green hydrogen.
With the growing demand for critical minerals, are the current policy reforms and initiatives adequate to drive the necessary investment into the sector? Is the market well placed to deliver the necessary supply?

 

Janette Hewson

  • The resource sector will play a key role in this transition. Gas is currently needed for
    manufacturing – which will continue to be important given the Future Made in Australia
    initiatives – and steelmaking coal is used in electric vehicle production. We must
    ensure public understanding of the necessity of these existing commodities, as well as
    critical minerals, to reach net zero.
  • Queensland is well positioned for critical minerals due to our existing resource sector,
    a skilled and highly paid workforce, and strong ESG criteria met by the
    state. Our state has strong mining and energy sectors and stringent environmental
    regulations, which boosts confidence in our ability to benefit from these opportunities
    and become a critical minerals leader.
  • To meet global demand, 230 new critical minerals mines are needed by 2030. It
    currently takes 16 years on average from exploration to production, indicating we’re
    behind in starting critical mineral operations.
  • Ensuring investment confidence is a key challenge to unlocking Queensland’s
    opportunities not only in traditional mining, but also in advanced processing to add
    value along the supply chain.
  • Reliable, affordable, and sustainable energy is also critical for these ventures. For
    example, existing mines are major energy users who are demanding clean energy as
    they pursue decarbonisation. This is being met through electrification on site and
    through renewable energy agreements.
  • Additionally, we must streamline project approvals to reduce the 16-year wait and
    enhance investor confidence.
  • The development of the resource sector is vital for Queensland’s economy,
    government revenue, and employment – directly and indirectly supporting over half a
    million Queenslanders.
  • The Queensland Resources Council emphasises policy stability to maintain investor
    confidence and capitalise on opportunities. Policy certainty and stability are critical for
    long-term investments; sudden changes without consultation deter investors.
  • The right policy settings are critical to ensuring Queensland capitalises on the
    opportunities in the critical minerals sector.
There is a clear need for affordable, reliable, sustainable energy for Queensland’s mining sector.
What is the role of off-grid hybrid renewable energy systems in being able to deliver this energy?

 

James Harman

  • The transition to sustainable energy is challenging, but Queensland is well placed to
    contribute to the global effort.
  • One key challenge is providing renewable energy to those far from the grid, which
    includes many remote areas in Queensland. Traditionally, these off-grid areas have
    relied on unreliable diesel generators.
  • EDL has played a key role in delivering hybrid renewable energy alternatives to
    remote communities and mine sites.
  • When these projects were first started, this resulted in about 10-15% renewable
    energy for a mine site or remote community. Cannington mine was an early example
    of this, with the conversion of a diesel-fired power station to gas, and then the
    addition of a solar farm.
  • In 2020, EDL developed the Agnew microgrid in Western Australia for a Gold Fields
    mine – integrating wind, solar, battery, and thermal backup to deliver more than
    50% renewables. This was also the first mine in Australia to be powered by largescale wind.
  • As technology and EDL’s solutions have developed, and come down in cost, it has
    become possible to deliver projects that are over 80% renewables – while ensuring
    the lowest cost for new mining projects anywhere in Australia.
  • This is enabling a different approach to managing electricity supply and demand,
    moving from a centralised model towards decentralised energy for communities and
    customers located away from the main grid via microgrids. These can deliver 75-
    80% renewables and can be more reliable than the grid.
  • Policy change is critical to continuing to support these innovative solutions.
  • These solutions are case studies for microgrids which should be considered in
    policy development in order to supply remote power across Queensland.
  • Broader decarbonisation policy is critical to achieve 100% renewables; while we
    can get to about 90% renewables through solar, wind, battery, and some thermal
    backup, renewable gas or fuels can enable the final 10% for remote energy
    applications in communities and mines.
  • As another example of innovation helping with the global transitions, EDL is also a
    producer of renewable natural gas – biomethane – in the US, where we have up to
    seven petajoules of capacity.
  • Considering the difficulty in decarbonising and electrifying industrial processes,
    having an alternate to fossil fuel gas is critical. The use of renewable natural gas is
    widespread in Europe and North America, but not in Australia – given the supportive
    policy environment in these regions. This includes the Inflation Reduction Act and
    Renewable Fuel Standard – which has resulted in 70% of the gas used in transport
    in the US being renewable, compared to zero in Australia.
  • Greater policy support will be required to unlock the bioenergy sources in
    Queensland, which could supply more than half of the domestic demand for gas in
    the state.

There is going to be a large build of pumped hydro energy storage to enable renewable energy
resources, and off-grid systems to supply our remote mining operations – which unlock $500
billion of critical minerals and power remote communities across the state. Are we ready for the
significant construction that will be required?

 

 

Mark Scott

  • Hastings Deering has a 92-year history in Queensland, working in construction,
    resources and energy sectors.
  • As an industry, we are ready for the ramp-up in construction needed for pumped
    hydro energy storage and renewable integration. This major opportunity for the
    construction industry should focus on long-term benefits for Queensland and the
    country, not just immediate needs.
  • To achieve this, these projects require planning, coordination, resourcing and the
    right funding models to achieve success.
  • Certainty and planning are critical for long-term investment and infrastructure
    development. To achieve this, we must ensure a well-planned pipeline of
    opportunities and secure our supply chains.
  • Collaboration across the value chain is necessary to achieve the construction goals
    and unlock the state’s potential.
  • Another critical enabler of this development will be continuous investment in skills to
    overcome ongoing skill shortages.

 

Keiran Cusack

  • Queensland Hydro have launched a new campaign focused on education and
    awareness. This was in response to low levels of knowledge about Queensland
    Hydro and how hydroelectricity works in areas outside of those directly impacted
    by development.
  • Queensland Hydro is also spreading information via a website to address this gap,
    providing more information about the Pioneer Burdekin project – including how
    hydro works and how it integrates into the system.

 

James Harman

  • The Queensland Government’s decarbonisation initiatives are significantly
    contributing to this area.
  • One notable initiative is the Queensland Decarbonisation Hub, launched in
    collaboration with universities, industry, government and communities. This hub
    promotes a collaborative approach to decarbonising the state, ensuring community
    involvement in projects like wind farms, solar farms, and hydro projects.
  • Another significant policy is the Low Emission Investment Partnership, aimed at
    supporting mining, particularly metallurgical coal. This partnership invites industry
    collaboration to help mines decarbonise.
  • For over 20 years, EDL has been converting waste gases from underground coal
    mines in Queensland into power.
  • With government support, this fund will enable major miners in Queensland to
    undertake similar initiatives and advance their decarbonisation efforts.
There is a clear shift from just addressing emissions towards thinking more broadly about naturebased impacts and solutions. Given the environmental impacts of pumped hydro, how can we implement the environmental policy required while maintaining a timely energy transition?
 

 

Keiran Cusack

  • Queensland Hydro considers how to achieve nature-positive outcomes, beyond
    just the immediate benefits from hydro. For example, we are looking for
    opportunities to exceed our base offset requirements and increase the protected
    area of national parks.
  • While hydro has obvious benefits for decarbonisation and the reef in particular, we
    have an obligation to further contribute to ensuring positive local impacts as much
    as we contribute to the global impacts of decarbonisation.
How is Queensland Hydro addressing challenges around constructability, which have previously
contributed to delays and cost over-runs for pumped hydro?
 

 

Keiran Cusack

  • Our project is quite distinct to Snowy Two, which has 27 kilometres of tunnels
    connecting two reservoirs, given our tunnels will be about three kilometres.
  • The selected site is geographically advantageous for having very short tunnels,
    providing an advantage in reduced impacts and reduced risk for the projects.
  • In terms of constructability, we are bringing in a highly skilled and talented team.
    To do this, we have established partnerships with Landsverkjun Power from Iceland,
    a state-owned operator of hydro that has been building them since 1939. We have
    also formed a relationship with Verbund, the Austrian generation entity with 8,000
    megawatts of generating capacity.
  • This highlights how we are bringing significant expertise to help us craft the best
    plans to mitigate risk and overcome the types of challenges seen with Snowy Two.
 
AUDIENCE QUESTIONS
 
What is the role of innovative technologies – such as different forms of long-duration storage such
as sodium-ion batteries – in the transition and for the grid?
 

 

Prof. Paul Simshauser AM

  •  Operating a power system with high levels of renewables without storage is
    complex. Given intermittency, this will involve some level of over-capacity – resulting
    in spilled output - to meet demand and State targets.
  • As such, there is a clear role for storage, including batteries, to support the system.
    Batteries are currently economical for short durations – around two to four hours –
    while long duration storage solutions need further development and support.
  • A key challenge is that we need to make storage decisions now, despite the
    uncertainty around potential future technological advancements. Operating in
    this environment will see those technologies which deliver the best economic and
    technical outcomes come out on top.
  • Solar energy is rapidly increasing in the market, competing with coal-fired power
    generation. By the 2030s, this solar influx will require some coal generators to shut
    down due to material oversupply during daylight hours.
  • As such, enhancing our ability to shift renewable energy through space (via
    Powerlink’s networks) and through time (via long duration storage) will be critical.
  • Pumped hydro is currently the most cost-effective long duration storage solution.
    However, future options might include innovative technologies such as compressed
    air, various battery technologies, and flexible loads.

 

James Harman

  • In deploying microgrid solutions, EDL is considering four-hour duration batteries,
    given significantly decreasing costs.
  • For example, a few years ago, we replaced an old diesel-fired power station at
    Jabiru in Kakadu National Park, which supplied the Ranger uranium mine and the
    town of Jabiru.
  • Our energy solution delivered 50% renewable energy to Jabiru, using solar, battery
    and diesel backup.
  • If we delivered the same project now, we could deliver around 70% renewables at
    the same cost due to the reduced cost of storage. The battery cost curve is on a
    downward slope – and this is supporting innovative projects such as our
    microgrid solutions.
 
What is the role of distributed energy resources – such as residential home batteries – to support
the transition and the grid?
 

 

Prof. Paul Simshauser AM

  •  Any storage – including household batteries – is beneficial for the power system.
    Household batteries can help move solar power around, which has positive impacts
    for the local grid.
  • However, household batteries need coordination, which can be challenging. This
    is exacerbated given the increasing average installation size of rooftop solar in
    Queensland – which is now 9.9 kilowatts.
  • With these installations, a household battery – like a Powerwall – would likely fill
    up by 10:30 AM and be depleted by 7:30 PM. There is clearly further coordination
    required to better shift this energy throughout the day – but this may not suit
    the household.
  • Larger batteries in electric vehicles may also contribute in this area. However,
    coordination implies some level of control by electricity utilities and this is,
    understandably, likely to be met with resistance by households.
  • So for these reasons, and given the scale of the storage needed, both household
    and utility-scale batteries and other long duration storage assets such as pumped
    hydro will be essential to meet this need, both shifting power and also providing
    services like frequency control and system strength.
  • We must deliver storage – no matter the scale – at an efficient price in order to
    effectively manage Queensland’s abundant solar resources.

As we undertake decarbonisation and the energy transition, how do we ensure we don’t miss out
on the economic prosperity previously delivered by a strong resources sector?


 

Janette Hewson

  • Queensland has long relied on energy – including coal and gas, as well as exports
    to New South Wales and overseas – for its economic prosperity. As we transition
    away from these traditional energy sources, we must retain this prosperity in the
    decarbonised future.
  • Last year, $18 billion in royalties came to the Queensland Government and to
    Queenslanders – highlighting the significance of this revenue source for
    the economy.
  • Queensland is fortunate to have various energy options, unlike some of our Asian
    export partners who are also aiming for net zero emissions.
  • From a geopolitical perspective, we need to ensure energy security. But we must
    also consider our role beyond our state in supporting a safe, reliable and prosperous
    region and world.
  • The whole world is facing net zero challenges, and each country will approach
    this in different ways. Some countries rely on our exports to keep their lights on,
    especially those with populations much larger than ours.
  • Queensland will therefore likely play a role in supporting decarbonisation across
    other economies. We must consider how to best leverage this opportunity as we
    pivot our own economy

The mining sector has often led innovative technology development. What changes around transport has decarbonisation of the sector seen?


 

Mark Scott

  • Mining operations have pioneered cutting-edge technology. For example, autonomous vehicles are being developed by companies like Caterpillar for the industry, before being considered for public roads.
  • There will still be a role for diesel engines for some time, with ongoing development to improve their efficiency. However, battery electric and alternate fuel technologies are currently being developed and advanced – which may eventually support transition.
  • Large mining companies globally are starting to trial and publicly announce these new
    technologies. We are likely to see the results of these technological developments in the next few years once they are proven and adopted.

 

Prof. Paul Simshauser AM

  •  As leaders in the energy and resources industry, we have a long history of coordination, though it hasn’t always been seamless.
  • The power sector and resources sector are closely linked - historically, one doesn’t function well without the other. This interdependence provides practical evidence of the coordination required and our ability to work together.
  • Given this relationship, Queensland is well placed to coordinate effectively in achieving the
    state’s emission reduction targets.

 

James Harman

  • There’s been a long history of cooperation and collaboration between the energy and
    resources sector.
  • For example, the resources sector wants reliable, sustainable and cheap energy – and is now seeking sustainable energy to achieve this given renewable solutions are now cheaper than the old thermal solutions. This is a win-win situation as we can deploy renewables to help the resources sector decarbonise.
  • However, beyond the electricity needs, there is a significant amount of work required to
    decarbonise transport and deliver broader electrification of processes at mines.
  • The energy demand for this electricity is going to be very large – and will require solutions to produce and manage the energy required to supply this demand.
  • Collaboration between the private and public sector will be required to achieve this.

 

Janette Hewson

  • Collaboration within industry is a critical enabler of the transition.
  • However, it is also critical for government to work with industry to overcome the challenges faced by the resources and energy sectors that have been discussed.
  • Given the capability of businesses to solve problems, and set and achieve targets, the more we can leverage this knowledge through collaboration with governments at a federal and state level, the better.