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Big Money flowing into battery technology... Thanks for the...

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    Big Money flowing into battery technology...

    Thanks for the article Tiger, this is something I've not really thought about below, although it is obvious when you do, particularly after a few Saturday afternoon cold ones....
    That is to say, they can add extra kilowatt- or megawatt-hour capacity simply by adding more tanks of electrolyte to the same system, which processes it through its electrochemical cells to generate power. That’s different than a solid, cell-based battery, where the relationship between power density and energy storage capacity has to be made beforehand, in the choice of particular lithium chemistries, for example.

    Thinking about Sumitomo's major deployment which is 60MWhr/15MW - http://techon.nikkeibp.co.jp/atclen/news_en/15mk/010500287/?ST=msbe

    Why this is kinda important - right now there is over-capacity in coal/gas electricity generation in quite a few states in Australia. If a distributor/generator wished to do a staged roll out of storage initially simply just for frequency control with an eye on the future of the grid (distributed generation) - they'd make the part that feeds into the grid - the inverter - as large as possible ie. lets assume the grid capacity is 50MW for interest sake. So it may make sense for them to size the inverter at 50MW.
    For the electrolyte, because it is for frequency control any deviations would be most probably short term - so they could theoretically install 25MWhr of electrolyte - this would give them the ability to run at 50MW for 1/2 hour.
    As the grid transitions to more distributed generation, all they would have to do is add more electrolyte, more storage & pumping capacity. Expandable capacity, ie obsolescence accounted for as well as down side risk - not as big an initial investment would be needed if longer term plans were 'hoping' that battery storage was going to be mainstream in the future.

    At one point I was also thinking about the 84MW power supply which TNG said will be needed for the Darwin refinery. To run the refinery completely on solar & battery seemed like an extreme cost - 8 hours a day sunshine, 16 hours a day no generation. For 84MW you'd probably need at least 3.5 times this size in solar panels. Which is a pretty huge cost in itself - large scale around $1.75/w best I've been able to find in oz. So $1.75*84MW *3.5 = $515M.
    The inverters they'd need would add up to 84MW, but the storage becomes huge - think 16 hours a day X 84MWh or 1,344MWh worth of electrolyte. When you consider that both Imergy and Sumitomo 500kWh units are a 40 foot container in size, that is 2,688 containers to run the plant 24/7 plus the 294MW of solar generation or close to a million solar panels.

    Let's consider if TNG ran the ruler over this idea though.... at their proposed power usage - 84MW per hour at Darwin wholesale prices are around the 16ckWh mark or $160MWh.
    https://www.powerwater.com.au/customers/my_account/pricing

    At 84MW per hour, TNG could be paying up to $13,440 or $322,560 per hour.
    So the numbers for solar don't look so bad now - $322,560 * 365 = $117M per year in grid power costs.
    NT power would give special pricing to a consumer of this size, but even rounded down to $100M per annum in power this is a large cost on the Refinery.

    Looking then at storage, Imergy have stated an aim of $300kWh, we saw earlier last week WattJoule claiming $150/kwh storage and Sumitomo haven't yet shown their hand.
    Let's take WattJoule's FOB number and add in $50 kWh for installation, design, permitting etc. That 1,344MWh storage becomes $268M. So we're now at $515+$268 or $783M dollars.

    $783M - there is another TIVAN refinery for you.... but.....consider this :

    20 years life - Solar + Storage
    Solar Panels are generally guaranteed for 25 years with degradation guarantees from the bigger firms of still generating at 80% by year 20.
    Vanadium Redox Batteries electrolyte - 20 years is OK, not sure about the operational components, but lets say 20 years as well.

    $783M amortized over 20 years S+S = $39.15M per annum.
    vs $100M per year grid costs (not indexed for inflation) x 20 years - $2B in electricity costs.

    But here's the kicker. Large scale (over 100kW) solar systems can 'create' a Large Scale Generation Certificate (LGC) for every MWh of solar power they produce & then on sell these to fossil fuel generators.

    In the case above, assuming an average daily solar generation window of 8 hours x 365 or 2,920 hours per year. It would be better than this in Darwin, but for this argument this number will do.
    2,920 hours * 294MWh (the size of the system) = 858,480 MWh per year.
    An LGC is currently worth close to $80. So $68,678,400 from the sale of LGCs per annum.

    Rough estimates, but with LGC's plus annualized cost difference ($100M-$39.15M say $60M) this changes the numbers so that the TNG would be $128M a year better off.
    After they get finance for the refinery & mine, here's hoping some smarter cookie than me comes up with a financing package that could facilitate this. For even loaning the entire $783M at 10% could still see TNG with a net $50M p.a. improvement from buying the power straight from the grid.

    Another Option could be : Someone like CAT finance, build & sign a 20 year PPA that sells TNG power cheaper than the grid.
    Or TNG commit to spending say 10% of Free Cash flow in building the above. They'd own the system in 10 years.

    BTW, the NT grid has sectors which have become a bit politicized, so it could also be considered another risk mitigation undertaking - to generate their own power.
    http://reneweconomy.com.au/2016/ali...-fuel-controversy-in-heart-of-australia-93417

    Inpex, Roy Hill, Citic all have built their own power stations, so it's not that unusual for this size of power demand to justify self generation as a capital expenditure.
 
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