What’s happening with Trustpower SP has dropped over the last few weeks, unloved or is bad news to come out soon?
Printable View
What’s happening with Trustpower SP has dropped over the last few weeks, unloved or is bad news to come out soon?
Coming back to this, a colleague has recently been looking at installing a solar panel plus battery. This is a large cost (and increasing due to supply, labour costs, and shipping cost increases) even when financed. Given the changes to the retail pricing structure, it appears to make less sense to install solar unless they can completely disconnect from the grid.
I installed panels and battery. Cost 20,000. It's on a new built house so can't say exactly what it saves me, but last years power cost 1300, which is dirt cheap (In Dunedin). Certainly neighbours I have quizzed are around 3 or 4 thousand at least for similar, 2 person, households and only electric heating. I'm happy with that. It's the equivalent of over 15% taxable return, and that's impossible to get out of a risk-free investment. With marginal tax rising to 39% it becomes an easier choice for those on the top marginal rate. I'll play with the figures as I learn more about the performance with a view to adding more panels or more battery.
Seems to be a good return - well done!
Taking a conservative approach, what is the expected life of your system before you have to reinvest; as in replacing panels, batteries etc ?
For the $20K what sort of system did you go for FP. Rolls Royce, Toyota or Lada? Any key learnings that you have taken from the exercise and thus recommend to others to what they should or shouldn't do?
Nice!
Additionally I don’t think power will get cheaper going forward. That will enhance it as well.
I took a different route 2 years ago and installed a solar hart water heater. $7000 + installation say 2k. (Can’t recall)
Unless extended cloudy period, no water heating from now till late April early mid May. Power bill average $130/mth (Contact), no electrical heating all fires, we live in the North. Seems quite good, our power is quite expensive I believe.
Just need it to last 15-20 years, last one was problematic after ~25.
Couldn't help notice GNE net yield of 5.24%. With 80% imputation that's 6.75% gross. Company has changed its dividend policy here https://www.genesisenergy.co.nz/investors/dividends
but they say this The Board also confirmed a new dividend policy of paying out between 70% and 90% of free cash flow. The change in policy introduces the flexibility to retain capital to invest in our Future-gen strategy. However, the change in policy does not represent a departure from our aim to grow dividends over time and we recognise the importance of dividends to our investors.. GNE is transitioning to a lower carbon future and accordingly may not currently have any ESG premium built into its $3.32 share price (unlike the other gentailiers). Analysts see this very differently, with no consensus at all...which is quite unusual https://www.marketscreener.com/quote...957/consensus/
Disc: I recently added a few more GNE to my portfolio.
Hi Beagle. A few times I’ve noticed your posts have shared links to market screener referring to their analysts. I’m a beginner starting to learn and I’m curious on your reasoning for looking at market screeners analyst predictions over other sites analysts? Thanks in advance.
Hi DonkeyKong. I love your user name, (one of my favorite games from the 1980's) :)
Market screener is a free site that compiles analyst recommendations so you get a pretty good idea as to how the average analyst sees a stock (which removes the bias from any one analyst). Reuters has something similar but I prefer market screener.
Sounds like you've done well with that system, and it pretty much suits your requires.
When we calculated it, the break even period was (depending upon which equipment was purchased) between 10-14 years. The two big issues were the life of the solar cells and the battery. The much more expensive LG cells had a 25 year warranty on them and guaranteed at least approximately 85% of their normal generative capacity at 25 years, while the cheaper cells either didn't specify a generative capacity or in one case it was exceptionally low. The same goes for the battery, with the lower quality units providing very little in the way of guarantees aside form that they will still work. We also didn't have anyone home during the day, so battery capacity needed to be much higher.
Some others I know based their purchasing decision on the low user electricity plan, and their ability to sell back to the grid, thereby significantly reducing the break even period. Unfortunately neither of those options appear to be working in their favour now.
We are however looking at installing a system on one of our commercial buildings, sans battery. The site is a co-lo office so given tenants are charged a flat monthly all-inclusive fee, it makes good sense for us to reduce the power costs as much as possible.
In terms of low-user plan, I guess we'll need to wait and see how much the power companies reduce the KW/h rate by. I suspect it won't be enough to offset the increased daily charge, but they will, like most businesses claim that it has help to offset other increased costs.
"Roughly four decades ago, neo-liberal economic principles were introduced to the electricity sector. The industry gradually changed from one dedicated to serving the public and encouraging economic development to one focusing instead on maximizing profits. Along the way, the political and regulatory systems seem to have become unusually obliging with respect to corporate interests as big money in US politics exerts its corrupting influence"
https://finance.yahoo.com/news/elect...190000857.html
"Everyone knew that the energy transition would not be cheap. The ongoing energy crisis shows that no one can put the cart before the horse in the transition - backups and flexibility are vital for any successful energy system."
https://finance.yahoo.com/news/gover...220000817.html
"As a crucial element in achieving 2050 net-zero targets, hydrogen production, storage, and transport represents a multi-trillion-dollar opportunity, not only for energy incumbents but also for investors. While hydrogen is currently more expensive (per unit of energy delivered) than competing options such as fossil fuels, the scaling up of electrolyzer production is driving down costs. Within the next decade, we can expect H2 to reach break-even points with fossil fuels across different applications, after which hydrogen uptake will bring cost savings."
https://www.marketwatch.com/story/ex...?siteid=yhoof2
Roughly four decades ago my two monthly electricity bill became monthly with the amount payable each time remaining the same. Price has been going up ever since.
I think you will find a lot of things have been going down in price . How much was a colour TV as a % of your wages in the 80’s or a plasma in the 00’s .Airline flights ,appliances etc all a fraction of a % of income .
On the other side of this ,is rent as a proportion of income has got to unsustainable levels for many families .
Apparently Lake Onslow investigations have begun with the appointment of a consortium of engineers looking into feasibility, design, geo-tech and environmental aspects.
'The NZ Battery Project' is scheduled to release its initial conclusions in the first quarter of 2022.
Forsyth Barr says rising interest rates continue to put downward pressure on electricity stocks.
In addition, the release of the Electricity Authority's wholesale electricity market review did little to allay fears of regulatory risk, with the authority canvassing opinion on possible structural reform.
"These two issues are the main reasons for our continuing cautious outlook for the sector," the broker said in a research note.
Are electricity stocks immune to interest rate moves?
"In our view, no. The electricity sector has been a yield play for several years and that should not change just because interest rates are rising.
"Whilst there has been some softness in electricity share prices over the past month, they have not moved materially despite the jump in interest rates.
"Although the spread between the 10-year interest rate swap and electricity gross dividend yields has been trending down for several years, the step change downwards in the spread over the past two months has taken it well below the trend line.
"This highlights the potential downside pressure on electricity stocks, as we believe it is unlikely the spread will remain at record lows."
Forsyth Barr said Genesis was the least exposed to a re-rating driven by interest rates, given its high dividend yield.
needless to say a report commissioned by Meridian Energy and Contact Energy has poured Cold water on the suggested pumped hydro megaproject
report finds that every option is cheaper, quicker and more efficient than the government’s Onslow.
'from BD'
The auckland rail blowout is a much worse issue than this rather decent idea I would think.
I disagree with this Forsyth Barr logic. A high dividend yield generally indicates more risk. So why with interest rates rising, would you suddenly decide to put your money into a share that is higher up the risk scale? Personally I would look for more security from the better business and take the lower yield. Thus I see the likes of Meridian, Mercury and Contact being less affected by rising interest rates than Genesis.
SNOOPY
The Contact idea seems worth exploring a little.
Put all the thermal generation on one company. Company is owned by all the generators.
The proportion is set by .....?????
Their revenue ?
Their generation capacity ?
Some formula.
And then colllectively they have to keep enough Thermal going in NZ to keep the lights on. And can collectively phase it out as more renewables are commissioned.
Not straightforward.....but could equtably share the load of needing to keep Thermal going ?
With all those EV's its going to be needed....now...whats wrong with that picture ?
But isn't the problem with "more renewables" one of unreliability? When the wind doesn't blow and the sun doesn't shine..........
Allot of these renewables aren't cheap to develop..How can they get a decent return?
Someone has ultimately got to pay for it..The shareholders probably
Even Genesis admit renewable generation is now the cheapest option, hence their scramble for solar and wind. Burning coal takes a lot of increasingly expensive carbon credits.
The intermittent generation issue is real and will need investment to deal with it, from increasing ripple signals to control demand to batteries or pumped hydro to fill the generation gaps. Not easy but obviously we'll need to do it eventually if we keep on burning finite resources.
getting a hammering but not surprising in a rising interest rate environment
Stop me if it's already been on a thread.I heard some Goss about a new listing coming ,no detail but sounded like solar panels on dairy farms ,high enough for the herds to graze below.
The goss possibly this one?
https://www.stuff.co.nz/waikato-time...-north-waikato
Lake Onslow
https://www.msn.com/en-nz/news/natio...285c4151d10e3e
"In-principle decisions will be made in May and by the end of the year we will know whether Lake Onslow will also become a part of New Zealand's renewable energy solution."
Pretty ambitious decision making.
Warning to those who are enjoying profits and dividends from power co's.
Shane Te Pou and crew are coming after you.
See todays Marae program, TV1.
Jacinda will be listening...
I am increasingly frustrated with how difficult it is to find proper comparisons on electricity rates for both buying electricity and buyback rates. Almost all the websites I've tried want to give me an estimated annual savings and that sort of nonsense. I just want to see how much they charge per kwh and how much they will pay me for my excess production, which is quite significant and I will work out what suits me best myself.
Can anyone help guide me towards an up to date reliable website where I can get that info ?
https://www.stuff.co.nz/environment/...fy-the-country
Good summary of NZ Generation options.
Iceman I go through this exercise every two years when renewing a fixed term contract.
As you say pricing is not transparent, rather they first want to know what you pay now then they claim 'their' price saves X $100s per year. It's all smoke and mirrors BS.
You've gotta ring these bxxstards up and demand their BEST Kw/hr rate and daily charge. That's the stuff that you do the calcs on. Forget sign up bonus unless you get two close offers cause it might help over say 2 years. Discounting and negotiable line charge is still around despite minister Wood-head has tried to cancel them. I usually threaten to leave straight away to set the scene. Churn costs them money. Buying back doesn't work here as they want to sell stuff not buy it.
Buying back is a total rip off
We get 8 cents for our solar but pay around 32 cents plus all the line charges etc.
Probably a lack of competition and vision for the future.
We live in northland and generating up here must produce savings in transmission costs
When the "big one' hits...Ive been assured that Clyde Dam will remain...given the amount of concrete poured into its foundations...is it insured...?
Like what ...a billion dollars....probably more....
Thanks for this. I have a few months left on my 2 years Trust Power contract and will be starting my research soon. But the number I’m most interested in is the buyback rate as with our solar system and 2x Tesla Powerwalls, we produce well in excess of our usage (even with main car being EV). But there is no transparency with the buyback rate and no encouragement to produce and export solar power on our homes to use in the grid. Sadly it will require calling every single retailer !
I am with Flick Electric and get the market price as a buyback rate (typically 15-20 cents). Of course there is still the line cost, to be paid over what you import but not over what you export. And the daily fixed cost for a low user, just increased from 30 to 60 cents a day to be raised every year by 30 cents until low user doesn't exist anymore.
To be precise: I pay a fixed cost of 30 cents per day for the network and 30 cents per day for the meter. And I pay a variable cost per kWh for the power I import of 0.113 cents for the EIA levy, 4.49 cents for Flicks Admin, a network cost of 14.9 cents during peak hours (7-11 and 17-21), 10.5 cents during shoulder hours (11-17 and 21-23), and 3.6 cents during off-peak hours (23-7), plus the ever changing market rate (changes every 5 minutes but is averaged out per half hour by Flick Electric). As the buyback rate, for power I export I get back the variable market rate, no charge for EIA, Flicks Admin or network.
A better solution for resistive loads like a hot water cylinder, is to use a solar power diverter. This uses a CT clamp on the main power feed to the house, and diverts power that would otherwise be exported, into heating the hot water. It only diverts the excess power, avoiding importing power when the sun goes behind a cloud. Also works well with my battery system
Thank you.
None of the solar installation companies mentioned this-just charged me a lot for replacing load fuses with mini timers .
Sounds like a cheap non-invasive set-up to reduce the power bill with solar
Seriously thinking that mini-pumped hydro using an existing bore pump operating as directed by ct clamp to store power in a 30000 l. Water tank and then a mini-turbine to generate power at night could be a very effective battery .
Sadly the numbers don't really stack up, even if you have a very high hill to pump it to. For example 4 l/s flow over a 10m head will give you around 167W output (using this calculator). That 4 l/s flow rate is going to drain your tank in a little over 2 hours (4 l/s = 4*60*60 = 14400 l/hr). You've generated a massive 0.35 kWh over that period. It will be better the more head you have available, but still pretty unviable.
Thanks cyclist for the calculation.
clearly not viable small scale.
however if there was an area above and close to lake taupo that could store water this could act as a low cost battery without the complexities risks and costs of a think big project as lake onslow.
I feel widespread adoption of solar and wind, supplemented with underground gas storage and retention of Huntly burning clean gas in dry years is the sensible future .
Thought this article from Business desk sums Onslow up well.
Here are 10 big problems with the Onslow proposal:
- It won’t be ready in time. The Infrastructure Commission’s report on harnessing NZ’s renewable energy potential, published this week, is blunt. “Our calculation is that [Onslow] will not be available until 2037 at the earliest.” The government is targeting 100% renewable electricity by 2030, so Onslow will be at least seven years too late to contribute to that outcome. In the meantime, there are 15 years of economic and electricity demand growth that needs to be met somewhere.
- No one really knows how much it will cost. Estimates from backers suggest $4b. Critics say it could be $8b-plus and has all the hallmarks of the Clyde Dam project’s cost blowouts.
- No one really knows if the project can be done. This is a subset of the cost question. A tunnel of more than 20 kilometres through the schisty, unstable rock of central Otago is inevitably a gamble. The $100m feasibility study under way is intended to help answer this question. But the potential for expensive discoveries long after the project has been given the green light is substantial. It could also take far longer than estimated to complete.
- There are better, lower-cost alternatives. These will get us to the same outcome – and sooner. NZ has wind, geothermal, solar and potentially biomass and carbon capture use and storage (CCUS) options that can produce electricity at competitive prices today and within the next decade.
- New renewable investment is discouraged. It's much less likely to occur if the spectre of a massive market intervention sits on the horizon, 15 years out. It's far more likely that fewer renewable wind and other power plants will be built in the interim, with coal and gas-fired power stations taking up the slack until Onslow arrives. In other words, Onslow would likely mean higher carbon emissions than could be achieved by other means.
- Onslow is an old technology solution. New, post-carbon technologies are rapidly emerging. One example: green hydrogen production. Meridian and Contact say they're serious about this and that there's enough untapped wind energy in Southland to build a green hydrogen plant that would use as much power as the Tiwai Point aluminium smelter. Note: the smelter could continue running too – as long as it pays a much fairer price than it does now for 85% to 98% renewable electricity to make “green” aluminium. But a big part of the green hydrogen concept is being able to turn the production process up and down at will. During dry winters, a green hydrogen plant could throttle right back and sell its electricity into the grid instead. That would give it precisely the same effect as Onslow, but without the taxpayer having to build Onslow. If Onslow is built, the business case for green hydrogen and a whole new post-carbon industry evaporates.
- If it's a battery, there will be better ones. Onslow’s main justification is that it acts as a battery, but the Infrastructure Commission suggests there will be better batteries available by 2037. “By that time, inter-seasonal battery storage could be feasible and cheaper, and a more flexible option. Other approaches may also offer better value, such as biomass 'peakers' that only operate for increased demand from electricity users. In other words, we might still burn small amounts of gas to make electricity when there are shortages, but that gas could be net-zero-carbon biofuels relatively soon. If we wanted to store up biofuels, they could be stored the same way as gas is today – underground, in naturally occurring reservoirs.
- Onslow is not commercially viable. And it has never been seen as a commercially viable project. It's promoted as an all-eggs-in-one-basket, public-good investment that will always use more electricity pumping water uphill into its reservoir than will be produced from that reservoir. The only reason this can make sense is that the water would be pumped uphill when power is cheap and released when it’s expensive. That's exactly how the green hydrogen proposal works, too. Make ammonia or hydrogen when electricity is cheap, which we could use to power cars, trucks, and industrial processes that now use fossil fuels. When it’s more valuable to use energy to make electricity than hydrogen, turn down the hydrogen plant.
- Private investors. They would back green hydrogen – not the taxpayer – and its development would support massive extra investment in new renewable electricity. Onslow would do neither. A study for Meridian and Contact by Concept, an energy consulting firm, concluded last year that “the highest cost option [for energy security of supply] is building a large South Island pumped storage scheme, due to having to recover the costs associated with building such a scheme”.
- Look at the other options. Even massively overbuilding wind or solar electricity generation to cope with dry winters would be likely cheaper than building the Lake Onslow project.
...And then, of course, there’s the question of resource consent. But that, in my view, is the least of the impediments to an idea so bold as to be obscuring its manifest flaws.
I actually think Onslow will go ahead, and it will be part of a “Why not both?” Long term strategy.
Onslow will be viewed as a strategic national asset, not just for reserve power generation, but also (and this is often overlooked) for its value as a very large freshwater storage facility. Ideally it would also be topped with a very large floating solar farm (as they do on lakes in China).
What is the benefit of using it to store fresh water given its location? One or two small cities and some farms get a boost to water security?
The report is written to discourage Lake Onslow going ahead
1 = rubbish
2 = the same for any project, even short term projects like building a house
3 = under evaluation, and may become overland
4 = more of the same won't work in dry years. Wind is unpredictable, solar doesn't work at night or in the winter, geothermal is close to maximised already and isn't carbon free
5 = rubbish
6 = old tech is proven tech. This is a benefit in this instance. Other storage media is not suitable for long term storage. Hydrogen will NEVER trump direct electricity generation, production losses are astronomical
7 = there probably will be better batteries, but not for long term storage. Batteries are fine for peaker demand, not for longer term storage (weeks/months)
8 = Onslow will be a government funded project, so commercial viability is irrelevant. It will have the public-good function of lowering power prices by arbitrage. This is the real "commercial viability" that the current generators are so worried about
9 = irrelevant, see pt8 above
10 = appears to be the same as pt4?? Clearly the authors wanted 10 points, but by duplicating, they have come up short.
I think Onslow would make a lot more sense if NZ had a power linkage to Australia similar to the Australia-Asia power link that is in development now. They have heaps of solar energy generation and huge future potential solar capacity expansion, but lack energy storage (power prices were going negative during the day in solar heavy states). Onslows cost per kwh of storage is compelling but I do wonder if we need to have so much storage. Onslows purpose is also partially political (to combat climate change) and helping AUS with their storage problem would further this goal given something like 0.6% of global emissions are from the AUS electricity network.
Interestingly enough, an HVDC link to Aussie would reduce the need for Onslow as it would unlock Australian power generation to NZ. Most notably, solar for NZ peak demand. Because of the time lag, you can still have major solar farms generating electricity while NZ no longer has sunshine hours to generate. It would also enable nuclear power, the greatest risk with nuclear to NZ is tectonic instability which Australia could provide. Ultimately, it would mean generation diversification over completely different weather systems which becomes important as we become more reliant on wind and solar.
The down side to an HVDC link to Australia is the transmission line losses. I got curious one day and calculated the losses and over the distance it was something in the magnitude of 1/3 of the total power transmitted would be lost. Of course, this has its assumptions to make that calculation on the back of a napkin but it's a ball park figure. Transmission losses are also a concern with Lake Onslow, however the distance and therefore the losses are much less.
In response to the posted article:
4. Pumped hydro is one of the most efficient means for energy storage with 80%-90% full cycle efficiency. When you compare it to batteries, it's cheap. Someone on this thread calculated that the capacity which Onslow would provide in energy storage would be something in the magnitude of trillions of dollars if built from lithium ion batteries. NZ is unique in the fact the most viable pumped hydro project in the country is Onslow, the downside is the share scale of the project. A notable comparison would be electric mountain if you're interested. Further to xafalcon comment, it assumes the wind always blows and the sun shines when we need it.
5. The opposite is actually true. New renewable generation is encouraged by Onslow as it promises that when the winds blowing and the suns shining, there will be a demand. Minimal to zero curtailment would be required. It provides a pricing floor, ie Onslow starts pumping up hill when the price get below $x and pumps down hill when price goes above $y.
6. Hydrogen generation will be a fantastic load for the power grid. However, hydrogen for long term storage, is inefficient and not worth it - a pumped hydro system is a much preferred method.
7. Refer to comment 4.
8. This again assumes we can generate enough power at all times. Onslows biggest achievement is when our whole power generation capacity is weather, the lights can still stay on. It just smooths out the peaks and troughs of demand vs generation
It will be interesting if this works & over what distances & loads???
"The Emrod technology works by utilising electromagnetic waves to safely and efficiently transmit energy wirelessly over vast distances. The prototype received some government funding and was designed and built in Auckland in cooperation with Callaghan Innovation."
https://www.powerengineeringint.com/...n%20Innovation.
A company in the US, SO, is having all sorts of problems getting a nuclear power plant completed.
https://www.reuters.com/business/ene...ts-2022-02-17/
I wonder how we would get on ? Maybe a tunneling or piping project, eg Lake Onslow, might be best ?
Very interesting article on Onslow here.
https://www.newsroom.co.nz/trade-off...-nzs-lights-on
And the comments below the article are possibly even more interesting than the article itself. Here is a fraction of one comment from Ciaran Keogh of Environmental Consultants Otago Ltd.
"If we need to store more water for dry years, we can do it simply by maintaining an emergency buffer in the existing headwater lakes. That would cost nothing and have a better result because it would not consume any electricity."
"How many wind turbines could be built for $4billion? Working on a cost or $2Million per megawatt of capacity that equates to two gigawatts of generating capacity, all of which could be built in the North Island closest to the source of demand."
"The biggest flaw in the pumped storage idea is that it contains the expectation that dry spells will alternate with wet years but that is not how the climate works. The Interdecadal Pacific Oscillation causes a long-term drier and wetter phases, particularly in the South Island. NIWA notes in an item on its website titled “Long-term fluctuations in river flow conditions linked to the Interdecadal Pacific Oscillation” Flow data from 2000 onwards in the South Island support the idea that flows in those rivers are lower during the negative phase of the IPO. The data suggest that the post-2000 reduction in flow has been of the order of 10%. It is unclear for how long the IPO will remain negative, but previous IPO phases have lasted 20-30 years, so the current negative phase may last another 10-20 years. Pumped storage might just make the problem worse – not only does it use more electricity than it produces but it will suffer exactly the same problem as the existing “batteries” in the system in the lakes at the head of the Waikato, Clutha and Waitaki. Dry years happen in a multiyear series so what happens in year two once the water in the “battery” is run down in the first dry year? Back to where we started but with less electricity and $4Billion poorer?"
SNOOPY
I have spent some time on the Contact Energy thread looking at how a staggered price cap plan at Onslow might affect the profitability of Contact Energy. But there is a far more serious consequence of choosing the wrong price cap at Onslow that will affect the future viability of the entire electric power system.
The problem is that the construction of new power stations becomes viable as the future wholesale power prices rise. This is very apparent from the Mercury Energy Annual Reports. The Property Plant and Equipment section of these reports contains a section reporting on 'assets carried at fair value'. At Mercury, these 'fair value' changes reached an extreme in FY2021 when suddenly $938m worth of 'new assets' appeared on the balance sheet. In fact these 'new assets' were not new in the bricks and mortar sense. This astonishing amount of money 'came into being' in just one year, based solely on the revised future earning power of Mercury's legacy power generation assets.
To some observers, this $938m materialised out of 'thin air'. However it was based on a model that foresaw future wholesale energy price rises to a level of $74MWh to $180MWh. If Onslow reduces these high price expectations, then this so called 'thin air capital' (created from future energy price expectations) will disappear. And with it, so will the economics that makes the building of certain new power stations viable.
Therein lies the 'balancing problem' for Onslow. Make the power price cap too high, and consumers will continue to be ripped off by gentailers manipulating the wholesale power price market. But make the power price cap too low, and suddenly the economics of the much needed new renewable power stations no longer work. I.e. they will not be built! Therein lies the fine balance that 'the great NZ battery Project' (for which Onslow is the favoured front runner) must strike with their 'market intervention' power pricing.
SNOOPY
Apparently we going to be short of electricity today
We have already seen 5 minute prices spike to around $800 this morning. Final prices look like they may come out at around $500 for TP15.
https://www2.electricityinfo.co.nz/p...search_exclude=
I am not sure it is fair to call Onslow a 'white elephant'. Ciaran Keogh of Environmental Consultants Otago Ltd. thinks there are better solutions. But if we start producing hydrogen fuel in Southland, and Rio Tinto looks to keep the aluminium smelter going down there as well, suddenly we may not have the surplus of power down south that we thought we had. In such a circumstance, having a 'local battery', like Onslow, might be just the thing to have and be in just the right place.
Responding to this article by Dr Kevin E Trenberth
https://www.newsroom.co.nz/kevin-tre...431c1-97981709
Peter Olorenshaw (Architect) has a novel alternative solution based on the number of Nissan Leaf cars already 'installed; in New Zealand.
"And just on batteries - you may be forgetting the batteries we already have here in the form of our Nissan Leafs already set up for Vehicle to Grid operation. They may well be a useful way to store daytime summer solar power and I came across an Australian article. Below is the link to an article on this Vehicle to Grid technology just come to Australia may help out as a grid solar load balancing thing."
https://www.abc.net.au/news/science/...alia/100811130
"While of course we need to reduce our energy consumption and beware of just producing more energy to support our current lifestyles, the thing is that this uses what we’ve already got - these EVs sitting idle for 95% of the time. (And the thing is that Lithium battery chemistries in these EVs seems to be considerably different to other chemistries we may be more familiar with. It appears that the primary degradation in EV batteries is through simple calendar degradation, not number of cycles. In fact Flip. the Fleet found that the more EVs were drive, i.e. the more charges they have, the better condition their batteries were in. So for EV owners if there is no battery longevity downside in using your car battery for grid support and you charge them up at the very low nighttime rates and discharge at very high peak rates, being handsomely rewarded for doing so, why wouldn't you?)"
"The article laments that new EVs will have to be made compatible with V2G applications and that currently only Nissan Leafs and Misubishi Vehicles can do this - But we’ve got some 15,000 used Nissan Leafs here in NZ already, let alone new ones! - the trick is to have them plugged in when we have a solar surplus. Some will be at home during the day, some will be at peoples work places. It would of course need these trick wallboxes wherever the EV is parked most - be that work or home."
"And just how big is that battery capacity available? - if we assumed 10kWh* from 15,000 Nissan Leafs then that is 1,500MWh = about an hour and half of Huntly Power Station going flat out or 3 hours of Benmore station (largest hydro station after Manapouri). In comparison the much celebrated big Tesla grid battery in South Australia (which doesn’t use cars) is 200MWh - so we are talking about 7 times the amount of this celebrated big battery, just from our old Leafs around NZ."
"* The First Nissan Leafs that came out had 24kWh batteries, next model had 30kWh, New shape ones have 40-64kWh so assuming 10kWh from every Leaf is surely not too far out for this back of an envelope calculation."
However, I believe there is flaw in Peter Olorenshaw's calculation. V2G technology was first trumpeted with the second generation Nissan Leaf that started appearing around 2020. So I don't think all of those earlier Nissan Leaf's from 2010 to 2019, which make up the bulk of the NZ Nissan Leaf fleet, have this V2G technology fitted.
https://www.nissan.co.nz/about-nissa...australia.html
Tesla, with the number new vehicles that have appeared on NZ roads since the referenced Newsroom article, may be able to help. Officially Tesla do not promote V2G technology. However, according to this article:
https://electrek.co/2020/05/19/tesla...ging-features/
the hardware does exist within the more recent model 3 and model Y vehicles to make V2G use possible in the future.
SNOOPY
Last time I checked, 15,000 x10 = 150,000 = 150MWh
Most Leafs in NZ only have 8-12 KWh of battery capacity remaining, and require a significant amount of this to act as a transport machine
Batteries degrade with cycles, time, usage, temperature
Say a leaf owner charges at $0.15/KWh, sells 5KWh at $0.30/KWh, with energy recovery of 85%, they make $0.63 before tax. Who would bother?
This V2G concept appears to work on paper but will not work in reality
Thanks for checking the maths on my quote from Peter Olorenshaw. It goes with the narrative of architects having great but impractical ideas! It did occur to me that he might have made a mistake in the basis science. But I didn't expect he would trip up on the multiplication!
SNOOPY
I make home solar energy storage systems using "retired" Nissan Leaf batteries. I obtain the batteries by purchasing a cheap Nissan Leaf with a degraded battery and swap in a good battery from a collision damaged vehicle. The car gets sold with a useful second life, and I get a battery that is perfectly good for home storage for the next 10+ years. By that time I assume battery recycling will be widespread so the cells will have a significant scrap value
So I have a good understanding of the state of NZ's Nissan Leaf fleet, and their batteries
Because if you have a battery at home already inside your Nissan Leaf, there is no need to subsidise anything more?
1/ Incremental cost of a pile of Leafs all over the country: $0
2/ Incremental cost of the Lake Onslow 'battery project': $4,000m
So which to choose? Hmmmm?
SNOOPY
The leaf batteries (and any other sensible home battery situation) do nothing for Onslow's primary purpose of being a dry year battery. Last time I did the maths I think you needed to spend something like a trillion dollars putting a couple of hundred Tesla power walls in every house in NZ to match the sheer storage capacity of Onslow. This is not even considering how well they could hold charge over a few months or years.
Could be a good solution to daily balancing of power maybe allowing some extra renewables into the mix (and I believe one of two gentailers are looking at grid scale batteries for this purpose) but this is only an incidental benefit of Onslow as I understand it. The main job is being a big puddle of water to make up for low hydro generation in a dry year, to replace the big pile of coal currently doing the job.
There may be a couple of hundred in NZ
Kiwi ingenuity (number 8 wire) is a dying thing. Apathy, lack of general skills, higher priority use of spare time etc, all contribute to a society that is increasingly reliant on purchasing items rather than making them or repairing them when they break
Our household is entirely electricity self sufficient (saves us $3000pa). We have cheap commuting Nissan Leafs that we charge from our solar (saves us $4000pa). And we sell our excess power back to the grid ($1500pa). System materials cost was $22000 (no cost for my labour). So the maths stack up for those prepared to put in the effort to DIY
The primary purpose of Onslow is to allow more intermittent generation like wind power, and to act as a load follower that geothermal cannot do. The dry year risk is a secondary function, but is the one that media appear to concentrate on.
Contact have given up the idea of grid scale batteries for the moment, but may reconsider sometime in the future.
From Energy News
Contact puts battery on ice as prices surge
Steve Rotherham - Thu, 18 Aug 2022
Contact Energy had hoped to have a 100 megawatt battery up and running by late 2024 – about the time its Taranaki Combined Cycle gas plant is decommissioned. But skyrocketing lithium prices have put that on hold, possibly for years.
Managing director Mike Fuge tells Energy News that Contact received preliminary bids from several parties.
“None of them were prepared to take lithium risk, and it just escalated the costs,” he says.
The company isn’t expecting price relief any time soon, says chief financial officer Dorian Devers.
“We suspect that with the length of time it will take new lithium supplies to come to market, it’s going to a while before a new battery is in the money for an investment decision.”
Perhaps the primary vs secondary purpose is a little subjective - I was guided by the Government's investigation of Onslow being under the 'NZ battery project' explicitly looking for a solution to the dry year problem which doesn't involve fossil fuels:
https://www.mbie.govt.nz/building-an...my/nz-battery/
However, I'd assume that the main way Onslow would earn money would be through the higher frequency buffering rather than pumping water and sitting on it until a dry year arrives.
I didn't realise Contact had parked their battery plan - Meridian are still looking at batteries as of a couple of weeks ago, "currently tendering for 100 MW/200 MWhcapacity battery". Hopefully they don't reach the same conclusion.
http://nzx-prod-s7fsd7f98s.s3-websit...479/377303.pdf
I was involved in the operational modelling for one of the consultants to MBIE. With the dry year backup as the primary focus, there was no way that Onslow could ever be operational, nor financially viable. The only way it could work is as a buffer for renewables while building up the storage for dry year back-up. This is also mentioned in Megan Woods' cabinet briefing paper.
50 Operating solely for dry year security by limiting its operation to set thresholds could
risk distorted market signals and result in higher prices at times of scarcity and less
private investment in other renewable generation. It would likely prevent it
contributing to managing calm, cloudy periods of low wind and solar generation, and
to unforeseen supply emergencies. Having set triggers for when a pumped hydro
scheme operates could also reduce its revenue and make it more susceptible to
gaming.
51 Conversely, operating on a continuous basis means that the asset can be used much
more efficiently, and support security of supply through a broader range of system
challenges (including future calm, cloudy periods, and events like that on 9 August
2021). If operated on a continuous basis, it could be broadly revenue positive, though
will have significant variability in its revenue between wet years (where it would be a
net consumer of electricity as it pumps and stores energy) and dry years (where it
would generate and draw down on its storage).
https://www.google.com/url?sa=t&rct=...ZtjMqlbdqaGUDr
Hey xafalcon, do you know about these guys in Christchurch planning to build all new 'upgrade' batteries for the Nissan Leaf?
https://evsenhanced.com/aftermarket-battery/
Towards the end of the year, they might be able to supply you some discarded Leaf battery cells for your business.
"We are targeting a sale price of approximately a third of the cost of an equivalent new Leaf for the GREEN variant. To avoid setting unrealistic expectations in the current inflationary environment, we have chosen to wait until closer to production before announcing an exact price. The 1/3 target price is BEFORE the trade in of your original battery pack is factored in which will reduce your final cost. Because we re-use the original battery enclosure when creating a new 16 Blade pack, there will be no option to buy 16 Blade without trading in a pack in exchange. However, there will be options to keep your original modules/cells repackaged into a more convenient form factor for stationary storage applications.
https://evsenhanced.com/nissan-leaf-bess/
SNOOPY
I have some of their equipment for doing the battery swaps in the Nissan Leafs, so yes, I'm following their work with interest
I'm located in the golden triangle, so a very long way from Chch. Freighting costs and logistics make it impractical to move bare battery cells that far
But I have a ready source of cars with partially degraded batteries in my home patch. And this way I keep another EV on the NZ roads
The Gentailers don’t have any incentive to procure battery systems when they would go a long way to reducing peak power pricing (if used properly). The perfect profitability environment for Gentailers is for electricity supply to only just be meeting peak power demands - meaning NZ will constantly be on the brink of a power crisis every winter. Which is exactly why Gentailers absolutely hate the idea of Onslow and/or everyone having a home battery to reduce peak demand.
Batteries do have a very useful place in the electrical system. They avoid the expensive and often disruptive need to increase feeder line capacity as peak demand grows above rated capacity. If a battery is included in such a situation, the battery supplies its power during the peak, keeping the feeder line below rated capacity. The battery is recharged overnight to meet the morning demand peak, and again in the middle of the day to meet the evening demand peak
During economic down-turns investors seem to think Power companies as "safe" investments because everyone needs power.....
Sounds good to a layman. However...how many people (investors) actually know how an Power Energy Market functions?
I have dedicated my Sunday morning to watching Joe Blogs on You Tube. A very interesting chap who has the ability to make lesser brain powered people like me understand complex issues...so interesting I just had to share it with you all..
This link is to do with how the European Electricity Market functions and it's consequences during difficult times (Russia)... The NZ Electricity Market has hydro but it has a similar infrastructure set up . The video is 28 minutes long but some parts are skippable..and you lose no relevance by skimming through it.
Off Topic:...While you are visiting Joe Blogs video blogs have a look at the recent Russian situation studied by Yale University and others..It put a whole new perspective in direction from other Countries and length of time the Ukraine War is having on the Russian Economy. To summarise from a Global perspective Russia has both immense short and long term problems (maybe bankruptcy),
Edit: PS....I have 23 solar panels. I use about 35KW a day and atm averaging 47% self sufficiency (a lot of cloudy days/ low solar energy and high use of heat pumps.). With this cloudy weather we still managed to micro-generate 60KWH to the grid so far this month @ 12cents/KWH
A question/suggestion for some of the wise heads on here.
Is there any scope to use some of the abandoned coal mines, above and below ground in the Waikato, for pumped hydro batteries?
Also the Martha Hill pit in Waihi, in conjunction with OGC's plans for large above ground settling ponds.
There are some escape shafts going into the old pit which could be easily re directed.
An appeasement to the Greens as well.
Obviously not Lake Onslow, but my suggestions are close to demand, and maybe less capital demanding?
Thanks for the link Hoop. I like the way this guy groups his comments into 'chapters'. Some comments....
1:20
"Margin calls: A company is being provided with some form of energy and has to place money on deposit with its supplier in order to cover any future movements in prices."
"(In the European energy market we have seen) A massive movement in prices means that the margin calls are increasing, placing further demand and pressure on all of these (retail) companies."
Comment: Setting the scene.
Energy Deregulation
"In many countries the national entities were broken up, they were divided into the different parts of the industry. so the producers of gas and electricity, the distributors, the networks and the billing companies were all separated into different companies."
Comment: In NZ it was a bit different. The natural monopolies, being the network companies, have price controls. The generators of energy and the retailers were not separated, which is why they are known as 'gentailers' now. There is therefore a natural hedge between the generator part of the business and the retailer part of the business that helps cushion the effect of variations in the wholesale power market. The billing companies are part of the retailers and are not separate.
"As the markets became deregulated, lots of small enterprises came into the market in order to offer more competition and better deals for consumers."
Comment: Yes the same happened in NZ with lots of small 'retail companies' starting up.
"Some of the larger more attractive groupings have been taken over by foreign entities, that make large profits causing concern for consumers."
Comment: Did not happen in NZ None of our retailers are foreign controlled, since Origin Energy gave up their Contact Energy controlling stake.
Supply Chain
"Generators are at the top of the tree, producing the electricity that everybody needs. In a truly deregulated market, the vast amount of electricity will go into the wholesale market. Retailers are smaller companies that want to offer electricity to the retail market."
Comment: No really true in NZ. The gentailers control by far the largest share of the market, I think it is around 90%. While the wholesale market does set prices at the margin, is is quite normal to have long term power contracts between gentailers and between generators and smaller retailers at prices set in a separate agreement outside of the wholesale market. There is no such thing as 'Retail Market Billing Services' (as shown on the Supply Train slide) as separate entities in The NZ market
Financial Contracts
"Retail companies are really just financial institutions, what these companies do is sign a contract to notionally take electricity supply directly from the generators, and then they sign another contract with the consumer sometimes on a fixed basis so you will have a fixed price for your electricity for a certain period of time and sometimes on a floating basis. The consumer pays the billing company which must settle all of their obligations with the generator."
Comment: Those suppliers to the NZ market on a floating basis, like Flick electric, now also offer customers pre-hedged fixed rate pricing. Due to previous wholesale market volatility, almost all retail customers have gone over to fixed pricing now. So these floating price retail power payers in the smaller consumer retail market no longer exist in NZ, to any significant extent.
"The problem that a lot of these small and medium scale enterprises have is that they don't have enough cash, they simply can't buy that fixed price deal, because it has to be paid for up front."
Comment: This obviously does not apply to the gentailers that are enormous corporations. I don't think it applies to smaller NZ retailers either. They can have 'pay as you go' deals with the gentailers or buy power on the ASX NZ Power futures market that does not require them to 'stump up the cash' in one hit. At least that is my understanding of what happens in the NZ power market.
"Companies are locking in their consumer prices and buying in the open spot market."
Comment: No I don't think smaller NZ retail companies are doing this in the NZ power market. It would be a crazy business strategy to rely on such deals!
Margin Calls
"What we have is a lot of small companies taking energy from the big boys on credit."
Comment: We don't have this in NZ. Most retailers are 'the big boys'.
Energy Types
"The two most widely used forms of energy in Europe are gas and coal."
Comment: Not true in NZ, as most energy comes from hydro and geothermal. It is however true to say that gas and coal do set energy prices 'at the margin'. And prices 'at the margin' determine the electricity price received by all generators. However, gas in NZ is a by product of oil production. There is no shipping terminal to allow gas from NZ to be traded internationally. So gas in NZ works on a purely local market that is not affected by international gas prices. Thus we have not seen the volatility in gas prices in NZ that has been seen in Europe.
Natural Gas Prices
...have not gone up by a factor of 5 as they have in Europe.
Coal Prices
...have gone up. But only Genesis Energy uses coal and word is they have enough on hand to keep burning it for a while at historical prices. Longer term the plan is to phase out thermal generation in NZ, with Genesis being 'the last man standing'. So I am not sure if international prices have gone up for restocking that coal pile, when there is no plan to restock it, makes a difference in NZ.
Impact
...on Europe, not applicable in NZ.
Quite interesting, but fortunately I am not invested in any energy companies in Europe. I don't see too many problems akin to this in the NZ market going forwards. The exception being Genesis who will eventually be forced to shut down Huntly and will not have the capital to build a renewable replacement. So Genesis will become largely a 'middle man trader' beholden to the other gentailers to supply power to their retail base via inter-gentailer contracts. Or they may have to shed customers quickly if prices on the wholesale market spike. Either way, I don't think it is looking good for Genesis in the medium term.
SNOOPY
Another very informative post. After your 5 minute read I've gained more knowledge than spending hours trawling for data..
It takes a wealth of knowledge and lots of time to know a Market structure and how that Market System(s) operates, but to know the basics via a quick summary gives valuable understanding....
With investment opportunities in mind, that basic understanding provides me with better decision making whether to pursue further or leave alone..Looking longer term it also gives insight (warning/opportunity) when something [variable(s)] is altered due to market intervention such as, Competition, technical/innovative disruption, supply/demand, Government, etc.
Snoopy, thanks for your time and effort...much appreciated
or pumped storage to work it needs two reservoirs at different heights. The greater the height between them the greater the output. The storage depends on the volume of the storage reservoir, measured in millions of cubic meters. None of those suggestions meets either criteria. There is only one site in the north Island that approaches consideration, Ngaruroro. That site has major environmental, cultural and engineering issues. It would be around half the size of Onslow and would cost around 4 times the price to build.
Maybe this for old coal mines?
https://en.wikipedia.org/wiki/Compre...energy_storage
Hi just wondering if anyone would be so kind as to share their favourite power co share atm and why? (and perhaps any to avoid as well, or even general outlook for the sector)
I'm experienced with company analyis generally, but not the world of power cos, so would appreciate any opinions you'd like to share as I look to diversify the portfolio a bit more...
Me too, I like the idea of diversifying 'within a sector', then rebalancing over time as preference emerges. Energy, Telecommunications, Infrastructure, Aged Care, Retail .. etc. Nice to have a bit of everything in the blue-chip sectors, rather than picking winners and risking excessive trading fees and tax when those choices don't work out. This assumes a long term income focus rather than capital sensitive.
When the government decided it would float Genesis, Mercury, and Meridian, I simply bought all the electricity market participants in proportion to their generating capacity. Customers come, customers go, but capacity is forever - sort of.
The idea was that the market as a whole would always make money, but that there would be variation in each company's profitability over time and that the inter-company transactions would balance out. So if Mercury had a dry year and had to buy from Meridian, Mercury would have a bad year but Meridian would have a correspondingly good year.
So no favourites. . . but they all pay me at the end of the day
When reading recommendations like this, I really wonder if those pointy heads at 'X' (Craigs in this case - but not wanting to single out Craigs as I think other full service brokers do the same) take the trouble to look outside of their discounted cashflow spreadsheets. I notice the 'out' line of 'a key risk being government regulation'. But guess what? 'Government regulation' - in some form - is actually a certainty. And that fact immediately renders all of those Craigs recommendations as invalid.
It is quite clear to me that the government, be in National or Labour lead, is on the path to a low carbon power generation future. Within ten years, the Huntly power station that we know today will be closed down. Technically those Rankine Boilers are at the end of their design life already. So there will either have to be:
1/ A massive technical refit, which the government as controlling shareholder is not likely to be willing to fund and/or will vote down, OR
2/ The fuel and carbon costs will mean that Huntly will be unable to compete with Onslow, or whatever renewable battery system is built in its place.
Either way, Huntly is a 'zombie asset' as I see it.
The government got stuck into both Contact Energy and Meridian Energy last year for 'gaming the power supply system' (spilling water to raise the marginal power price). In the past the gentailers have been major beneficiaries of wholesale power price spikes which devastate their insufficiently hedged stand alone power retailer competition. Furthermore Genesis has been a major beneficiary of longer lasting high wholesale power prices from 'dry years'. The government has sent a clear message that NONE OF THIS BEHAVIOUR WILL IN FUTURE BE TOLERATED! So windfall peak wholesale pricing games will be done away with, by using wholesale price caps (that is effectively what Onslow, or its equivalent 'battery' will be).
Once you accept that Huntly is a 'zombie power station' and that Huntly generated 3,736GWh of energy over FY2022, - 54% of all energy generated by Genesis in that year - , then you can see what a massive disadvantage Genesis will have when competing with the other gentailers going out into the future. All of their windfall profits from dry years will be gone. And they will be 'wholesale price takers' from other retailers as they scramble to secure supply for their retail customer base, (which in my view they will struggle to retain). Consequently the 'high yields' that have brought Genesis to the top of the brokers recommendation pile will be likely be halved (as a best guess).
Genesis is currently trading on a PE of about 14. But if you back out the value of Kupe, which on a per share basis will likely settle at somewhere between 50cps and 80cps (say 60c as a best guess), then the underlying PE of the gentailer part of Genesis will be trading at a PE of about 20 in the market today. A non growth PE should be closer to 10. So I think fair value for Genesis shares, currently trading at a market price of $3 is somewhere around:
($3.00 - $0.60)/2 +$0.60 = $1.80
That equates to a massive downside risk from where it is trading at around $3 , and makes the 'head in the sand' 'carry on as you' are spreadsheet valuation by Craigs of $3.71 look silly.
Genesis is not the only Gentailer that has profits at risk from the battery story paradigm. Here are the numbers I ran for Contact Energy.
https://www.sharetrader.co.nz/showth...l=1#post973765
Consequently I would say that any broker that produces a lofty valuation of a gentailer with the 'get out clause' 'subject to government regulation' should do a bit more work and price up what that 'government regulation' risk actually is - in dollar terms- , BEFORE advising clients to go 'overweight' in the power sector.
SNOOPY
who nevertheless holds CEN and MCY shares , but regard myself as 'slightly underweight' in the power sector.
I know and understand your concerns about GNE and all power sector . Also in the different time ranges both you and Craigs can be right .
GNE like others have small investors brought to market by Govt action only . So now if Govt action results in hurting those retail investors ...not easily palatable in NZ ...also GNE and others majority investor is still Crown . These companies were listed and partially privatised not just for funds but for having competition take care of NZ consumers which was not happening with ECNZ ...main reason for splitting it ...but I understand people may have different versions
Past 10 years have shown that what these companies do for making money doesn't bother Govts that much but for some noise in favour of consumers to show how much they care . Reliability of electric supply is most important ...rest all requirements will come latter . They will be provided adequate opportunities and time to change for better including going Green with generation .
NZ has almost 10,000 MW installed capacity of generation but its power grid starts coming under pressure even below 7000 MW loads ...which we have seen recently also . Building generation capacities is a long term and costly decisions ....168 MW geo thermal Contact plant costing about 868 Mil !!
I am no expert in power sector ...but I still think GNE will get time to change which its doing as they can also see the writing on the wall