Pumped hydro more expensive than batteries: the calculations

Now let’s take a look into the calculations that Ronald Brakels made to prove that hydro power (Snowy Hydro 2.0) is more expensive than battery storage (Hornsdale Power Reserve). His arguments were spread over many paragraphs and at first glance it was not very clear what he was calculating exactly and why. Therefor, I thought it might be a good idea to redo his calculations. This reconstruction will be the subject of this post and I will clearly write out all his calculations in order to better understand his arguments.

The calculation can be divided into three parts.

1. The calculations for Snowy Hydro 2.0

This is the data he gathered:

  • Capacity: 2 GW
  • Storage capacity: 350 GWh, nah, 40 GWh
    (see more about this change from 350 to 40 in previous post)
  • Cost: AU$5.1 billion, nah, AU$10 billion.
    How did he got to that AU$10 billion figure? He first stated that the government has signed a construction contract for up to AU$5.1 billion, but this excluded transmission upgrades, therefor he estimated the cost at AU$7 billion. Then he theorized that this type of projects would generally come in over budget, so he added another 3 billion for good measure, resulting in the AU$10 billion that he used in his calculations.
  • Operational capacity: 17%
  • “Efficiency”: 76%.

He then calculated the price of Snowy Hydro 2.0 using the first three elements:

  • Per kW: AU$10,000,000,000 / 2,000,000 kW = AU$5.000/kW
  • Per kWh: AU$10,000,000,000 / 40,000,000 kWh = AU$250/kWh.

The price per kWh is a pretty meaningless number and doesn’t say anything about the price of the electricity put on the grid by Snow Hydro 2.0. That price will depend on its lifespan, the purchase price of the electricity used to pump the water back to the upper reservoir, the amount and price of electricity put on the grid and so on. It however doesn’t matter much, unless one wants to compare two types of storage with a different storage capacity.

2. The calculations for the Hornsdale Power Reserve

This is the data he gathered:

  • Capacity: 100 MW
  • Storage capacity: 129 MWh
  • Cost: AU$89,000,000
  • “Efficiency”: likely over 90%.

He then calculated the price of the Hornsdale Power Reserve:

  • Per kW: AU$89,000,000 / 100,000 kW = AU$890/kW
  • Per kWh: AU$89,000,000 / 129,000 kWh = AU$689.92/kWh ≈ AU$690/kWh.

Again, the price per kWh is a pretty meaningless number, but it doesn’t really matter much … as long as he doesn’t start comparing the price per kWh of the two.

3. Snowy Hydro 2.0 versus Hornsdale Power Reserve

Until now, the calculation was rather straight forward. This is the part that was the most unclear to me. One would expect a direct comparison between the two, but this is not the case. Brakels proposes a scenario of batteries combined with solar panels to compete with pumped hydro. His reasoning is that the combination of batteries with solar and/or wind is cheaper than Snowy hydro 2.0 and has the additional benefits of reducing the total amount of energy storage required.

Both scenarios are compared per AU$5,000 and he calculates how much daily output the two scenarios could generate for that budget:

  • Hornsdale Power Reserve plus solar scenario:
    • 1.44 kW solar at AU$1,000/kW = AU$1,440
    • There is still AU$5,000 – AU$1,440 = AU$3,560 left
    • This AU$3,560 is enough budget for a battery having:
      • a capacity of AU$3,560 / AU$890/kW = 4 kW
      • a stored capacity of AU$3,560 / AU$689.92/kWh = 5.16 kWh.

    His reasoning is that this amount of solar would be enough to deliver between 1 kWh (overcast day) and 8 kWh (heatwave) per day and that this is mostly enough for a battery of 4kW / 5.16 kWh. During a heatwave more electricity will be delivered by those panels than can fit in the battery, but then that surplus could be deliver to the grid.

  • Snowy Hydro 2.0:
    • Operating capacity is only 17%, this means 24 hours x 0.17 = 4.08 ≈ 4 hours maximum output per day
    • AU$5,000 will therefor be enough budget for on average 1 kW x 4 hours = 4 kWh.
  • This leads Brakels to conclude that the battery plus solar scenario can supply more than the average amount of energy AU$5,000 worth of Snowy Hydro 2 is expected to supply…

    Additional arguments he makes in favor of batteries are that:

    • The “efficiency” of batteries is higher than hydro → there will be less conversion losses
    • Snowy Hydro 2.0 will not be ready until 2024 – 2025 → prices for batteries and solar will have been decreased considerable by then.

    But then…

    Brakels continues that “the winner is unclear”.

    Huh?!?!?!

    How could the winner be “unclear” at this point in the article? The vast majority of the article focused on the strengths of the batteries, ignoring the weaknesses or brushing them aside as being of not much importance anyway. After all this, reading that the winner is nevertheless unclear is quite surprising. There is nothing until this point that prepares for this.

    Why he comes to this unexpected conclusion will be something for the next post.

via Trust, yet verify

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September 21, 2021 at 04:37PM

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