Thread by @yestiseye

@ErichSchulz @markcojuangco @BieglerTom That's a slick move, recouping the cost of the asset over the entire lifetime. Not that I entirely disagree in principle, but even I don't push for a 0% discount rate.
If I tried that on @alexbhturnbull & @simonahac would make fun of me. 1/14

https://twitter.com/simonahac/status/1052195061406945283?s=19

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac Think of nuclear with its ~80 year lifetime versus 20ish for wind or solar. If calcs like yours are ok for pumped hydro, then it should be for anything else. This would of course radically alter the narrative. But let's ignore that in this case. 2/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac This article by @angelamacd from May this year provides the useful details of the Shoalhaven pumped hydro expansion which can be considered the optimum business case.
At $250m for an extra 235MW generating capacity, using your maths we we get ~$5/MWh. 3/14
afr.com/business/energ…

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd ie. ~$1m per MW recouped over 100 years, with 2000 hours at max output of operation per year to get $5/MWh.
Some additional info on the project:
waternsw.com.au/__data/assets/…
originenergy.com.au/about/who-we-a…
arena.gov.au/blog/pumped-hy…
also you can see how Qld & NSW use it on OpenNEM. 4/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd Hard to get an idea of how the discharging of pumped hydro mixes into the standard hydro output, but the charging/pumping operation provides a few hints. Real data is always invaluable. When the ARENA funded assessment becomes public we'll know more. opennem.org.au/#/all-regions 5/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd So now the but wait… excerpts from the AFR where relevant.
First we should be clear of the difference between pumped hydro operating in dispatchable mode for rapid response, and what'll potentially be important long term in bulk energy time shifting over days or more. 6/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd Not entirely sure about whether this is normal hydro plus pumped (I'm guessing it is), but it is instructive all the same on this topic. energy-charts.de/storage.htm 7/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd I would call the current phase 'relaxed' dispatchable, where it is easy for pumped hydro to make money off the margin… which is the first thing your simplistic calculations missed. You have to buy the energy to pump/charge up.
Note also the 30% round trip loss here. 8/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd Later, as more renewables come online in a place like NSW, pumped hydro will be just as useful at allowing coal plants to operate with less drastic load following, by creating extra demand when needed, avoiding stop/start hassles. But the dispatching will be less *relaxed*. 9/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd There are two additional costs not included here, both the additional transmission for connecting the pumped hydro(deemed sufficient already in the Shoalhaven project), and the cost of the reservoirs.
Useful data here: theconversation.com/want-energy-st…
theconversation.com/at-its-current… 10/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd Note also that there is no cost for building/expanding the reservoir in this case. This doesn't just mean a cost for the physical infrastructure, but a license fee for the water itself. Another objection people like to use against nuclear, so again we need equal treatment. 11/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd And it is here with the reservoir (not the MWs of the turbines) that you have failed to recognise that as it is upsized it becomes increasingly uneconomic. That last 14th hour in the reservoir conceivably gets used once a year. So $10,000/MWh for the final drop? 12/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd Or maybe we reduce that number by 6/14? Whatever the right calc is, clearly the first hour out of pumped hydro has a relatively trivial hurdle to make money. There's a sliding scale on the profitability of each MWh in the reservoir.
If serious research on this exists… 🙏🏾 13/14

@ErichSchulz @markcojuangco @BieglerTom @alexbhturnbull @simonahac @angelamacd So with all that in mind, and the likelihood in a renewables-only scenario, pumped hydro would occasionally run for a stretch of days; at a certain point building a reservoir big enough isn't sensible.

So we don't do it. And more options for firm supply would be useful. 14/14