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DID YOU KNOW THAT SMART POWER OFFERS...
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Embedded network management services?
Embedded networks are generally used where the building or subdivision owner has an incoming gate meter and they allow energy retailers to trade over that network which is owned and maintained by a third party, the embedded network owner. This owner pays for the network services at the gate meter and recovers the embedded network costs from the retailers that trade across its network.
With the help of demand and connection diversity, the embedded network owner can recover a return on their embedded network investment, and generally offer a cheaper network service to the tenant than they would normally pay if the tenant were connected directly to the "traditional" network provider.
Smart Power offers a full embedded network management service which includes establishing the embedded network owner as a market participant, administration of installation control points, energy reconciliation services, retailer account calculations and monthly reconciliation.
We can also assist in 'use of system' documentation and through our partners, provide the annual embedded network audits which are mandatory under today's market rules.
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EVER WONDERED ABOUT....
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The Dyson Sphere?
Now for somthing completely different....
While the idea of harnessing energy from the Sun as a favoured solution for once we eventually consume our planet's supply of fossil fuel is run of the mill, encapsulating the entire Sun with a shell of solar panels is, well, impossible and downright impractical. However, you may have read this concept in sci-fi stories where it is erroneously called a Dyson Sphere.
A Dyson Sphere is actually a hypothetical structure proposed by a physicist named Freeman Dyson. However, unlike the solid sphere that sci-fi authors describe, Dyson's original sphere was supposed to be a vast network of solar energy collectors - or satellites, if you want. Although the satellites would be spread out around the Sun or a star, they would not in any way cover it entirely. The number of solar power satellites to be used would be so enormous that the whole network would be more aptly called a swarm. Hence, some people use the term Dyson Swarm instead.
Using a swarm of independently floating satellites has many advantages, the more practical being that we would be able to add more satellites gradually, or as funds will allow. Another advantage is that each satellite would be autonomous enough to move to a better position when needed.
One initial step towards coming up with the swarm configuration may be the construction of a Dyson Ring, i.e., a chain of solar power satellites forming a ring around the Sun. More rings may be added as needed until the configuration would more or less resemble the swarm mentioned earlier.
The science fiction version of the Dyson Sphere describes it as a solid shell completely enclosing a star. Having this kind of configuration (which is considered the least plausible variant of the idea) has obvious benefits. First, it would be easy to capture 100% of the star's radiated energy since the electromagnetic radiation has nowhere to go but the inner surface of the sphere. Second, if the shell were somehow very sturdy enough, it could be used for habitation.
When Dyson first published his idea of such a sphere (the swarm type), he mentioned how it may be already used by other intelligent lifeforms in the Universe. Hence, he suggested that the moment we find such structures, it would be a sign that an extraterrestrial civilization could be found in its vicinity.
If you're just curious how the Dyson Sphere was depicted in fictional stories, try out Star Trek: The Next Generation in the episode 'Relics'.
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Greetings!
Welcome to this edition of "Get Smart", Smart Power's regular bulletin. Get Smart provides a round-up of energy news and views from New Zealand, Australia and around the world.
In "Company Voice" this month, director Shaun Hayward talks about issuing RFPs for gas procurement.
As always your feedback is most welcome. |
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NEW ZEALAND ENERGY HEADLINES
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Going green saves museum big money
Auckland Museum is being touted as a green example for other city organisations after it succeeded in slashing its carbon footprint by 30 per cent in just two years.
The reduction - saving the museum around $340,000 this year - has prompted a call by Auckland Mayor Len Brown for others to follow its lead.
Last year alone, the museum cut its carbon emissions by 365 tonnes, or around 21 per cent - bringing the total CO2 reduction over the past two calendar years to 600 tonnes.
As a result, the museum expects to spend 35 per cent less on electricity and gas this year compared to three years ago. Read more
NZ electricity prices 'middle of pack' among developed nations
Countries with an electricity buyer of the type proposed by Labour and the Greens have some of the lowest power prices - and some of the highest.
The proposal to create a monopoly buyer of wholesale electricity to curb price increases has fuelled debate over the cost of power.
But Electricity Authority boss Carl Hansen this week said New Zealand's residential electricity prices were "about middle of the pack" compared to other developed countries.
Data supplied by the authority shows that for 2011, New Zealand's residential power charge of 27.17c a unit or kilowatt/hour was slightly higher than the average of 26c for 27 developed countries.
The cheapest - 11.2c a unit - was in South Korea, which has a single buyer. However, the third most expensive power at 35.25c a unit was in Italy, which also has a single buyer. Read more
Power price cuts coming anyway, says First NZ
A broking firm says a 10 per cent reduction in power prices could be achieved through the current electricity market - meaning an overhaul proposed by the Labour and Green Parties is unnecessary.
First NZ Capital, whose investment banking arm is involved in selling down Mighty River Power, released a research note yesterday dismissing Opposition claims that power price rises have been "excessive" and questioning why the model should be changed.
"Despite the alleged "excessive price increase in the 13 years since 2000 we are not convinced the system is broken. If it isn't, then it doesn't need fixing," said analyst Jason Lindsay in the note.
Lindsay estimates that after line charges and allowing for inflation residential electricity prices have risen 2.6 per cent per annum since 2000. Read more
Infratil reopens $100M bond offer
Infratil, the Wellington-based investor, has re-launched its sale of up to $100 million of June 2022 infrastructure bonds after tweaking its offer document to note the increased regulatory risk posed by the Labour and Green parties' plans to overhaul the energy market.
The firm suspended its offer earlier this month to allow a re-write of its investment statement and prospectus after the Opposition political parties flagged an intention to introduce a central buying agency if they win the Treasury benches next year.
"The 18 April announcements increase regulatory uncertainty for TrustPower by raising the possibility that a future government may materially change the structure of the New Zealand electricity industry," Infratil said in its investment statement. Read more
Power man generates all his own electricity
At 10 o'clock in the morning it is briefly quiet inside the Northland house which is also a small power station.
Small in the sense that it has just two bedrooms, a bathroom and an open room which includes the dining table, kitchen space and working area with two computers and floor to ceiling shelves crammed with textbooks, CDs, bulging files and reminder notes.
And quiet for a moment because Eric Jansseune, who built this home power plant four years ago, is distracted while he fills the kettle for a morning coffee.
For the rest of the time he cannot stop declaiming his passion for solar power, for what he considers failures in energy policy, for cowboys who he says give the solar industry a bad name and for the power company he considers is screwing him over.
Last year Jansseune, a Belgium-born solar engineer, earned $463 for feeding electricity to the grid from the solar blanket stuck to his roof. That was after running his small ply house and carefully managing his power consumption. For first two months of this year he was still ahead by $64.
His is a small, highly energy-efficient house which he shares with his partner Carla and her teenage son Luca.
For the moment the family's power bill doesn't exist and is a long way from the annual cost for an average household of three to four adults of between $2000 and $2300. Read more
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AUSTRALIAN ENERGY HEADLINES
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Electricity prices set to drop as European links come into play
After years of pain from surging power prices, relief is in sight thanks to the decision to link the carbon price to the European market, with the pricing regulator - the Independent Pricing and Regulatory Tribunal - forecasting electricity prices could decline an average 5.9 per cent from mid-2015.
And if last week's collapse in the carbon price in Europe is sustained, this could result in prices falling even further.
The main driver of the decline in 2015-16 is linking the carbon price with the European price.
Earlier this month, IPART estimated electricity prices will rise an average of just 3 per cent from July 1. Households in rural NSW will be the main beneficiaries with virtually no price rise expected after they suffered substantial increases over the past few years. Prices through much of central Sydney rose to a higher 4.3 per cent. Read more
Electricity retailer 'strike' unplugs renewable sector's growth plans
A ''buyer's strike'' by two of Australia's biggest electricity retailers is potentially stalling growth in the renewable energy industry just two weeks after the government gave its backing for the sector, a big renewable energy supplier said.
Andrew Richards, executive manager of corporate affairs at Pacific Hydro, said EnergyAustralia and Origin Energy, which control more than half the national electricity market, had halted the signing of long-term power purchase agreements with wind and other renewable energy suppliers, in effect blocking developers from securing loans for new projects.
''For whatever reason, they're just not contracting,'' Mr Richards said. ''Unless they start contracting, you just simply can't get the finance - particularly non-recourse project finance - to build these projects.''
Last month, the government agreed to leave the renewable energy target largely unchanged after its latest biennial review. Read more
Energy fund 'self-sufficient'
The government says its $10 billion clean-energy fund, which the Coalition has vowed to scrap, will be volatile but ''financially self-sufficient'' over the long term.
The Clean Energy Finance Corporation, established to invest in clean-energy projects and technology, is expected to match the government's five-year bond rate, now 2.8 per cent, its investment mandate has revealed.
''By adopting a commercial approach, it is expected that the corporation will invest responsibly and manage risk so it is financially self-sufficient and achieves a benchmark rate of return,'' according to an explanatory memorandum issued last week.
Loans at cheaper rates would not exceed $300 million each year, it said. Read more
NSW energy bodies meet on affordability
Representatives from organisations including the Australian Energy Ombudsman, Energy Retailers Association of Australia and Australian Council of Social Service are holding talks at state parliament.
Energy efficiency, education, metering and government assistance are all up for discussion.
NSW Energy Minister Chris Hartcher, who opened the roundtable meeting on Monday, told AAP electricity affordability was a broad issue.
"NSW customers have been hit by price rises harder than anyone else," he said.
"But rising electricity prices are an issue for everyone - the broader community, energy retailers and distributors, state and federal governments, the community sector, energy ombudsmen and energy regulators." Read more
NSW public opposed to power sell-off: poll Most people in NSW don't want the state's "poles and wires" to be sold off despite rising power prices, a Fairfax Media-Nielsen poll has found. The poll, published in Fairfax Media on Sunday, found 75 per cent of power customers opposed selling the "poles and wires" part of the state's electricity infrastructure. The poll found only 24 per cent of Liberal and National voters were in favour of selling off the assets, with 70 per cent against it. Eighty-three per cent of ALP voters surveyed opposed the sale of electricity assets while 15 per cent supported it, the poll found. Greens voters were also overwhelmingly against a sell-off, with 79 per cent opposed, and 15 per cent in favour. Read more |
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INTERNATIONAL ENERGY HEADLINES
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Clean energy shift to bring major health benefits: UN
Air pollution is an underestimated scourge that kills far more people than AIDS and malaria and a shift to cleaner energy could easily halve the toll by 2030, U.N. officials said on Tuesday.
Investments in solar, wind or hydropower would benefit both human health and a drive by almost 200 nations to slow climate change, blamed mainly on a build-up of greenhouse gases in the atmosphere from use of fossil fuels, they said.
"Air pollution is causing more deaths than HIV or malaria combined," Kandeh Yumkella, director general of the U.N. Industrial Development Organisation, told a conference in Oslo trying to work out new U.N. development goals for 2030. Read more
Fridges could be switched off without owner's consent to reduce strain on power stations
White goods such as electric ovens would be affected by the proposals to fit all new appliances with sensors that could shut them down when the UK's generators struggle to meet demand for power.
The measures proposed by the UK's National Grid, along with its counterparts in 34 European countries, to install the controversial devices are backed by one of the European Union's most influential energy bodies.
They are pushing for the move because green energy sources such as wind farms are less predictable than traditional power stations, increasing the risk of blackouts. Read more
Failed Emissions Trading Reform: 'The End of a European Climate Policy'
Europe's once celebrated cap-and-trade system to limit carbon emissions has languished. The economic crisis has caused the price of emissions licenses to plummet, and a recent remedy to the problem has been rejected by EU lawmakers.
The European Parliament has voted down a proposal to make it more expensive for companies to burn fossil fuels, in what environmental advocates are calling a major setback in the fight against climate change.
The ETS was initially lauded by environmental advocates as the world's most ambitious effort to combat climate change. The number of certificates granting permission to emit carbon dioxide is capped, and companies can trade those certificates on the open market, in theory giving an economic incentive to invest in cleaner energy.
However the economy slump in Europe has caused the price of the emission certificates to drop dramatically, currently hovering around €5 ($6.50) per ton of carbon dioxide. Read more
Nasser in US energy call
BHP Billiton chairman Jac Nasser has urged the United States to allow energy exports from its shores, declaring that energy products should be traded globally.
Speaking at a British Chamber of Commerce lunch in Melbourne, Mr Nasser said he did not like to hear nations discussing concepts like ''energy security'' or ''energy independence'', which have become common in the US where energy products have rarely been exported.
While some exceptions do exist, the US has traditionally banned exports of energy products on the grounds that the nation has not been self-sufficient in energy for much of its recent history. That situation has been reversed by the recent shale boom in the US, which has created a gas glut, forced down energy prices and raised the prospect of exporting excess gas to growing Asian nations. Read more
London's cooking waste to fuel power station
Cooking waste from thousands of London restaurants and food companies is to help run what is claimed to be the world's biggest fat-fuelled power station.
The energy generated from the grease, oil and fat that clogs the capital's sewers will also be channelled to help run a major sewage works and a desalination plant, as well as supplying the National Grid, under plans announced by Thames Water and utility company 2OC.
The prospect of easing the financial and logistical problems of pouring £1m a month into clearing the drains of 40,000 fat-caused blockages a year is being hailed by the companies as a "win-win" project. Thirty tonnes a day of waste will be collected from leftover cooking oil supplies at eateries and manufacturers, fat traps in kitchens and pinchpoints in the sewers - enough to provide more than half the fuel the power plant will need to run. The rest of its fuel will come from waste vegetable oil and tallow (animal fats).
The deal, worth more than £200m over 20 years, has made possible the building of the £70m plant at Beckton, east London, which is financed by a consortium led by iCON Infrastructure. It is due to be operational in early 2015. No virgin oils from field or plantation crops will be used to power it, says 2OC. Read more
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THE COMPANY VOICE
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Shaun Hayward is the Managing Director of Energy Select Limited, as of Oct 2011 a wholly owned subsidiary of Smart Power Australasia; Shaun is now a director of Smart Power. Shaun has over 12 years' experience in the New Zealand electricity industry, predominately in retailing, energy trading and retailer operations. Prior to purchasing Energy Select Shaun worked for Mercury Energy in various Senior Management roles, and with the Electricity Commission to develop the industry rules.
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Issuing RFP's for Natural Gas procurement over recent years has proven to be a very cost effective method to obtaining the lowest price for the least risk. Until recently the two biggest issues facing the Natural Gas market has been the abundant supply of gas and the lack of ability to supply consumers of gas north of Huntly.
The issue of supply has largely been resolved with Vector (the pipeline owner) re-contracting at lower levels the 'capacity' of gas available in the pipeline for electricity generation (Contact and Mighty River Power). The industry is still working on a longer term solution to avoid such issues occurring again in Auckland, or elsewhere for that matter. The constraint in supplying Auckland with gas was a contractual issue rather than a physical supply issue. In short; shippers (Gas Retailers) had contracted the full capacity of the pipeline. This meant switching retailers was severely limited by the losing retailer not 'freeing up' contracted capacity', i.e. not offering it any other supplier.
The abundant gas came from smaller gas explorers maximising the last reserves from existing fields and a prolific on shore gas exploration activity over the last 2-3 years as Methanex signalled their desire to return to full production.
Methanex produces methanol from Natural Gas, historically their peak demand had been up to 60PJ pa. But, with world methanol prices expected to rise Methanex has secured supply contracts to the value of 90PJ pa. The gas market in 2011 was 158PJ, of which Methanex was approximately 20PJ. This implies under normal market conditions going forward Methanex will take approximately 40% of NZ's Natural Gas pa and will mostly likely exceed electricity demand for gas fired plant. This implies approximately 60PJ pa as NZ's commercial and industrial demand for Natural Gas.
In terms of RFP's for gas this has some profound effects. Methanex demand for gas is driven by production; i.e. the more gas Methanex gets the more product they produce (as opposed to other users of gas who use gas to transform inputs into a saleable product). Methanex effectively acts as a floor price in the market because if the price falls below a certain point Methanex can choose to buy the gas and produce more methanol. The floor price is unknown and varies by month but anecdotal evidence suggests it is around the $6 GJ price.
Before the market complains about 'Methanex taking all the gas', it must be understood the abundance of gas is a direct result of Methanex agreeing to purchase more. As a consumer Methanex is significant enough to encourage entrepreneurs to explore for more gas. This secures gas as a long run (at least the next 10 years) energy source and at competitive 'world' market rates. A competitively-run RFP process should therefore ensure the optimal outcome for other commercial and industrial users as they effectively secure gas supply off the back of the larger users.
There has been lots of discussion regarding the national electricity market and the effect of Tiwai Smelter closing down (in 2.5 years from point of notification, more or less due to run down clauses in supply contracts and other factors). Most market watchers believe if Tiwai stops (being 15% of the electricity market) the wholesale electricity price will drop due to lack of demand which will force the more expensive producers (the gas fired plants of Genesis, Contact and MRP) to close their generation stations and hence lower the average cost of electricity generation. This should then ensure an oversupply of gas to the market.
However, speculatively speaking, electricity prices could also become more volatile as NZ effectively becomes 100% reliable renewable generation such as hydro (rainfall) and wind and as such lower average costs could be eroded by higher peak pricing. Secondly, Methanex may take the generation demand for gas as on a worldwide basis it is a small increase in production, or suppliers of gas will again have to consider leaving gas in the ground until demand and supply re-balance.
This director's view on the electricity and gas market is the market will respond to changes in demand and supply as information comes to hand and any decrease in demand or increase in supply will almost always produce a counter response of equal measure from the market that ensures the efficient and effective management of energy markets for the foreseeable future. Therefore the most influential agent for change is, and always has been identified as, regulatory.
Smart Power can assist in many ways with procurement, advice, managing the activity, and book building. We are independent of all industry participants and have been advising clients since 1992 on procurement strategies. We are approved under the NZ Securities Markets Act, administered by the Financial Markets Authority, to review, to provide advice, or offer, electricity financial contracts, and I am a registered financial advisor. Smart Power is also an approved supplier of energy procurement, management and energy efficiency services to government organisations.
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This newsletter was provided by:
Smart Power
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