6. Modelling Technology Options

Following  on from  the community  consultation,  three  scenarios  were  developed  for 2025. They were based on the community’s general interest in renewable energy, as well as the interest in particular types of projects designed to drive uptake (as discussed in Section 5.2). Note that scenarios are not predictions: they are simply used to illustrate the impact of different levels of electricity demand and electricity generation options.

Scenario  1 represents a fairly modest uptake of additional renewable energy options. Both solar water heaters/heat pumps and solar PV increase only moderately compared to the current levels. Solar water heaters/heat pumps increase from being on 32.7% of houses to being on 35%. Household  PV increases  from 14.5 MW to 21.4 MW (which includes the 13% increase in the number of households), while commercial PV increases from 1.5 MW to 2.5 MW. It assumes no additional large-scale PV, bioenergy, wind or hydro. It also includes no reduction in electricity use because of energy efficiency.

Scenario  2 represents a realistic but ambitious level of uptake of renewable energy. Total residential and commercial PV increase to 36.7 MW and 6.4 MW respectively.  There are also increases in large-scale PV (5 MW), bioenergy (1 MW) and wind (0.2 MW), and the combined effect  of  increased  SWH/heat  pumps  and  energy  efficiency  almost  cancel  out  the  increased electricity use driven by population growth.

Scenario 3 is essentially an unrealistic target for 2025, but is used to illustrate the impacts of much higher uptake of renewable energy that could occur at a later date.


6.1.  Modelling 2025 Electricity Use

The modelling  was performed  for the year 2025 using NEMO  (National  Electricity  Market Optimiser),  an  open  source  electricity  sector  model  (https://nemo.ozlabs.org).  It  was  used  to model the hour-by-hour dispatch of a range of electricity generation technologies according to the scenarios  described  below. Only technologies  that are commercially  available  in Australia  are used.

This firstly involved projecting electricity use from 2016 allowing for population growth, uptake of SWHs, and the uptake of energy efficiency  options in general. Different levels of uptake of distributed  smaller-scale  PV, large-scale  PV, wind, bioenergy  and GreenPower  purchase were then  programmed  into  the  model  according  to  the  following  scenarios.  It  was  assumed  that electricity could be drawn from the National Electricity Market (NEM) when required (most likely overnight), then exported to the NEM when in excess (most likely during the day). 

6.1.1.     Population Growth

The Victorian Department  of Environment,  Land, Water and Planning produces ‘Victoria in Future’ reports on population and household Projections to 2051. The 2016 version expects the East Gippsland Shire population to grow from the current level of around 45,000 to around 49,000 by 2025.  The  number  of households  is projected  to increase  from  the current  level of about
24,450 to about 27,650 by 2025 (i.e. by 13%), which increases electricity use. We assume that an equal  proportion  are suitable  for PV  and SWHs  as are currently  suitable,  resulting  in 24,050 suitable dwellings.

6.1.2.     Smaller-scale Technology Uptake

The  following  discusses  the  various  options  that  can  affect  electricity  use.  They  can  be divided into those that (i) decrease electricity use (energy efficiency, including solar water heaters and air-sourced  heat pumps,  behaviour  change),  (ii) generate  renewable  electricity  (PV,  wind turbines, bioenergy), and (iii) GreenPower.

Decreasing Electricity Use

Decreasing electricity use through energy efficiency measures (also known as negawatts) is generally by far the cheapest way to reduce the amount of electricity drawn from the grid, and therefore greenhouse  gas emissions. Load management  is similar, but includes simply shifting loads from one time to another, without necessarily decreasing electricity use (some load shifting measures may in fact increase energy consumption).

They can provide value by (i) reducing the annual need for electricity, which makes meeting renewable energy targets easier, (ii) reducing demand at peak times, which reduces the amount of  local  renewable  energy  and  network  capacity  needed  at  any  one  time,  and  (iii)  reducing demand at times of low local renewable energy generation, which would reduce the amount of electricity that needs to be imported into East Gippsland Shire (for example, where large amounts of solar PV is used to meet electricity demand, overnight loads, such as off peak water heaters, should be moved to day time boosting).

Solar water heaters and air-sourced heat pumps

There are currently over 1 million solar water heaters (SWHs) or air-sourced heat pumps in Australia,  with  over  250,000  of  these  in  Victoria.49  Information  is  available  on  the  number  of SWHs  and  air-sourced  heat  pumps  by  postcode  from  the  Clean  Energy  Regulator.  East Gippsland  Shire  includes  the postcodes  shown  in Table VI. Of these, postcodes  3701, 3862,
3864 and 3898 include a proportion outside East Gippsland. The Australian Bureau of Statistics provides Australian  Statistical  Geographic  Standard  Correspondences  that are a mathematical
method used to assign data from one geographic  region to another.50  We have used these to


49 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Postcode-data-for-small-scale- installations#Solar-Water-Heater-and-Air-Source-Heat-Pump-Deemed
50 These can be obtained from http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/1270.0.55.006July%202011?OpenDocument 

assign the SWH uptake from these postcodes to East Gippsland Shire. Thus, about 20.8% of suitable dwellings  have SWHs, and about 11.9% of dwellings  use air-sourced  heat pumps for heating water.

Table VI Estimated Uptake of SWHs and Air-sourced Heat Pumps in East Gippsland Shire (Oct 2017)

Postcode    SWH    Heat pumps
3701    0    0
3862    0    0
3864    11    12
3865    35    20
3875    1,417    387
3878    112    35
3880    372    118
3882    95    53
3885    148    84
3886    18    35
3887    15    23
3888    170    294
3889    11    19
3890    13    13
3891    9    0
3892    144    45
3893    0    1
3895    3    3
3896    15    10
3898    12    11
3900    7    2
3902    38    22
3903    68    42
3904    138    102
3909    613    662
TOTAL    3,464    1,993
 

The amount by which SWHs reduce electricity use can vary greatly (eg. from 20% to 90%)51 depending on the orientation of the system, the amount of shading, the efficiency of the system, the design of the system (eg. flat plate or evacuated tube), the climate, the hot water demand, the boosting type and the time of day that hot water is used. Some of these issues do not affect heat pumps, for example, they are unaffected by orientation or shading and their efficiency is generally unaffected by hot water demand. SWHs and air-sourced heat pumps are often assumed to, on average, reduce the electricity used for the average hot water system by 70%.52 For the modelling conducted here, we have assumed that the average SWH or heat pump reduce electricity use by
4.9 kWh/day on average through the year. We apply this reduction between 11pm and 7am.53
The SWHs and heat pumps currently installed in East Gippsland Shire avoid the use of about
9,750 MWh of electricity  per year (meaning  that, without them, electricity  use would be about
3.7% higher).

SWHs and heat pumps offset the use of off-peak electricity, which costs less than standard electricity, which means they have a longer payback time than PV systems. We don’t distinguish between SWHs and heat pumps because we have no data on the likely future split in uptake and it is likely they will have similar impacts on electricity use. Table VII shows the estimated uptake of residential SWHs and heat pumps taking into consideration the projected population growth.

Table VII Uptake of SWHs and Air-sourced Heat Pumps in East Gippsland (2025)

    % of
Dwellings    SWH & Heat pumps    GWh decrease a    % decrease cf baseline b
        Additional    Total        
Scenario 1    35%    3,100    8,560    5.55    2.0%
Scenario 2    45%    5,550    11,000    9.90    3.6%
Scenario 3    55%    8,000    13,450    14.30    5.2%
                    
a: Decrease due to additional units
b: Decrease as a percentage of East Gippsland Shire’s 2016 electricity use

Other energy efficiency options

There is a wide variety of energy efficiency options available for households as well as businesses.  Behaviour change (such as turning off lights, wearing warmer (or cooler) clothing, turning  down  thermostats   etc)  is  also  a  very  significant   contributor   to  energy  efficiency


51 Gill, N., Osman, P., Head, L., Voyer, M., Harada, T., Waitt, G. and Gibson, C., 2015, ‘Looking beyond installation: Why households struggle to make the most of solar hot water systems, Energy Policy, 87, p83-94.
52 http://www.energyrating.gov.au/products/water-heaters/solar-water-heaters
53 SWHs and heat pumps would be much more effective in reducing electricity use during summer than in winter, and not all electric water heaters operate only between 11pm and 7am, however given the other estimates used here (such as uptake of these technologies), these assumptions are reasonable. 


outcomes.54  The  uptake  of  these  options  has  been  modelled  as  a  general  reduction  in  load between 7am and 11pm.

In  order  to  create  each  Scenario  we  assume  that  these  other  energy  efficiency  options reduce East Gippsland Shire’s electricity use in 2025 by the amounts shown in Table VIII. Then, when combined with the impact of population growth (13%) and residential SWHs/heat pumps, the final outcome are changes of +10.4%  to -7.9% with respect to 2016 levels. Note that the Subtotal isn’t the simple addition of the values above it because SWHs/heat pumps are assumed to  decrease  electricity  use  only  between  11pm  and  7am,  and  general  energy  efficiency  is assumed to decrease electricity use only between 7am and 11pm.

Table VIII Combined Impact of Population Growth, SWHs/heat pumps and General Energy Efficiency - Compared to 2016 Underlying Electricity Use (with existing PV added back in)

    Scenario 1    Scenario 2    Scenario 3
Population growth    13%    13%    13%
SWHs/heat pumps    -2.0%    -3.6%    -5.2%
General energy efficiency    0%    -10%    -20%
Subtotal    10.4%    1.4%    -7.9%

Renewable electricity

Distributed Solar PV

As discussed  above, there are currently  about 16,041  kW PV installed  in East Gippsland Shire: consisting of 4,573 systems (14,489 kW) that are less than 10 kW in size, and 79 (1,551 kW) in the 10 kW to 100 kW size range. About 27% of suitable  dwellings  have PV, and the average  residential  system  size  is  about  3.2  kW.  As  of  2017  there  were  just  over  4,280 businesses in East Gippsland Shire. Assuming the 79 systems in the 10 kW to 100 kW size range are on businesses and other larger organisations such as government buildings and schools, only about 1.8% of businesses currently have PV, and the average system size is about 20 kW.

The assumptions and outcomes for each Scenario are shown in Table IX. In reality there will of course be a range in system sizes, with some installations being much less or greater than the
assumed average.


54 Strictly speaking, behaviour change is an energy conservation measure, not an energy efficiency measure. 

Table IX Uptake of Distributed Solar PV in the East Gippsland Shire (2025)

    Uptake    Solar PV    GWh generation a    % cf baseline b
        Additional    Total        
Scenario 1
Residential Commercial Total    

25% - 3.5 kW
3% - 20 kW    

6.9 MW
1 MW
7.9 MW    

21.4 MW
2.5 MW
23.9 MW    

24.6
2.9
27.5    

8.1%
1.0%
9.1%
Scenario 2
Residential Commercial Total    

30% - 5 kW
7.5% - 20 kW    

22.2 MW
4.9 MW
27.1 MW    

36.7 MW
6.4 MW
43.1 MW    

42.3
7.5
49.7    

15.2%
2.7%
17.9%
Scenario 3
Residential Commercial Total    

40% - 5 kW
15% - 20 kW    

34.4 MW
11.3 MW
45.7 MW    

48.9 MW
12.8 MW
61.7 MW    

56.3
14.7
71.0    

22.3%
5.8%
28.1%
                    
a: Generation due to total PV systems
b: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Large-scale PV

The amounts of large-scale ground-mounted  PV, and the amounts of electricity generated, are shown in Table X. Businesses interviewed for this project expressed an interest in up to 3 MW of large-scale PV, so it is likely the actual amount installed will be between scenarios 1 and 2.

Table X Amount of Large-scale PV and Electricity Generated, East Gippsland Shire (2025)

    Large-scale
PV (MW)    Electricity Generated (GWh)
Scenario 1    0    0
Scenario 2    5 MW    6.0
Scenario 3    10 MW    12

Bioenergy

East Gippsland Water currently operates a small bioenergy facility that uses waste methane. Their electricity generation was estimated by dispatching the full capacity of the biomass plant in each hour of the year. The assumptions and outcomes for each Scenario are shown in Table XI. 

Table XI Uptake of Bioenergy in the East Gippsland Shire (2025)

    Capacity    MWh generation    % cf baseline a
            
Scenario 1    0.04 MW    350 MWh    0.1%
Scenario 2    1 MW    8,770 MWh    3.2%
Scenario 3    5 MW    43,850
MWh    17.4%
            
a: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Small-scale Wind turbines

We assumed there would be no large-scale (MW size) wind turbines, only some small-scale wind turbines. Figure 10 shows the Wind Map from the Victorian  Wind Atlas produced by the Sustainable  Energy Authority Victoria. The brown areas are the best places for wind turbines: which  explains  the tendency  for wind farms  to be along  the southern  coast of Australia.  The Hepburn Wind Farm is located in the brown area north east of Ballarat. Although there are some brown areas in East Gippsland, they are too far from transmission lines large enough to connect to. The yellow areas in East Gippsland could have average wind speeds around 7m/s, but these are concentrated near the coast, where large-scale wind turbines are unlikely to be visually acceptable.
 

The electricity generation of small-scale wind turbines was calculated by scaling wind power data from the ‘AEMO 100% Renewables Study’.55 The contribution from wind in these scenarios is very low and so the accuracy of the wind data is not critical. The assumptions and outcomes for each Scenario are shown in Table XII.

Table XII Uptake of Wind Turbines in the East Gippsland Shire (2025)

Capacity    MWh generation    % cf baseline a

Scenario 1 0 0 0 Scenario 2 0.2 MW 606 MWh 0.2% Scenario 3 0.5 MW 1,514 MWh 0.6%

a: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Run-of-river Hydro

There is likely to be a small amount of run-of-river hydro operated privately in East Gippsland Shire – some of which may not be grid-connected. This is already reflected in the underlying electricity use through the ZSs discussed above. To the best of our knowledge there are no plans for significant uptake of run-of-river hydro in the Shire and so we have not included any in our modelling.

GreenPower

GreenPower is accredited and independently audited electricity that is certified to come from renewable energy generation. It is additional to any mandated renewable energy targets, and so is bought by electricity customers so they can make their own contribution to increasing the amount of renewable electricity and so reducing greenhouse gas emissions. It generally costs about an extra 5c/kWh, and so for a household using say 11kWh/day (~4 MWh/year), would add about $50 to their quarterly electricity bill. Currently only about 0.5% of Australia-wide electricity sales are through GreenPower. The assumed purchases of GreenPower for each Scenario are shown in Table IX.

55 More information available here - https://www.environment.gov.au/climate-change/publications/aemo-modelling- outcomes

Table XIII Assumed Purchase of GreenPower in the East Gippsland Shire (2025)

GreenPower as a % of

Total Use Scenario 1 0.5% Scenario 2 1% Scenario 3 2%

6.1.3. Final Renewable Energy Mix

Table XIV shows the final capacity of each type of generator in 2025.

Table XIV Capacity of each type of generator in 2025

Scenario 1 (MW)    Scenario 2 (MW)    Scenario 3 (MW)

Existing PV 16.04 16.04 16.04 New residential PV 6.9 22.2 34.4 New commercial PV 1.0 4.9 11.3 New ground-mount PV 0.0 5.0 10.0 Bioenergy 0.04 1.0 5.0 Small-scale Wind 0.0 0.2 0.5

The following charts (Figure 11 to Figure 16) show the electricity generation from the mix of renewable energy technologies in each Scenario in East Gippsland Shire in 2025. For each Scenario, a summer peak week and a winter peak week are shown. Each of the colours represents a different technology (or category of technology such as residential or commercial PV). The two 47 MW gas turbines at Bairnsdale Power station are also shown. The slightly thicker black line shows the level of demand, and where generated electricity is exported, a paler version of the technology’s colour is used. The brown areas represent electricity imported from the Victorian grid. These charts are discussed below.

Firstly looking at the underlying load profile (the thicker black line), the times of the off-peak water heating are very obvious – being the regular high load spikes. We have been told that Bairnsdale Power Station is often switched on only to cope with the increased demand driven by off-peak water heating56 – and this is supported by the correlation between these peaks and the operation of Bairnsdale Power Station’s Unit 1 (BDL1).57

We have incorporated the operation of Bairnsdale Power Station’s two Units (BDL1 & BDL2) using actual half hourly data from 2016. BDL is operated to both bid into the electricity market and to provide network support. It is likely that the latter operation would be affected by the higher levels of penetration  of renewable energy, particularly in scenarios 2 and 3, and so the actual operation could be different to that shown here.

In  Scenario  3,  which  has  the  highest  uptake  of  renewable  technologies  and  the  lowest electricity demand, it can be seen that in summer there is a significant amount of excess solar PV electricity that flows back up through the ZSs. This is partly because the PV generation is higher in summer, but also because the load is lower. However,  this scenario assumes  a very large amount  of PV (a total of 71 MW, compared  to 16 MW currently),  and it is likely that a more realistic level of PV uptake would be somewhere between scenarios 1 and 2.

We have modelled  the impact  of one third of the households  with PV in scenario  2 also installing  batteries  with  a  10kWh  capacity  (8kWh  useable)58.  These  are  used  to  capture  PV electricity that is in excess of the household’s needs, which is then used to meet their evening load. This is shown in Figure 17 and Figure 18, which show a peak summer and winter week respectively, where the electricity generation by the PV+batteries is shown in pink. The strange
shape,  with  the spike  in the middle,  is caused  by the batteries  being  full and so excess  PV electricity is exported. This effect is much less pronounced in the winter chart, mainly because of lower PV output but also because  of higher load. Although  larger batteries  would reduce this effect, we have used 10kWh batteries because this is a common size for a residential system. The use of batteries in this way reduces the reverse power flow of PV electricity. Of course, load shifting through demand management, such as moving off peak water heating to the middle of the
day, would also be very effective.


56 Interview with Paul Guest, who used to run Bairnsdale Power Station.
57 BDL = Bairnsdale Power Limited
58 Assumes 80% useable capacity.