Introduction

Delegates, here is the MERC August Newsletter, please circulate the Newsletter to your fellow Councillors and senior staff this week, so they can appreciate and understand the excellent work the Association and you are doing on behalf of your Council and community, with regard to mining and energy related matters.  

Next Meetings of Association. The AGM meeting will be held in November in Sydney, NSW Parliament House on a date to be confirmed by the Executive Committee after the external review report by Future Together Group is received and analysed. Delegates resolved that the next meeting will be held in Sydney at Parliament House at a date to be determined to keep pressure on getting relevant Ministers attending during House sitting times.

Future 2024 Forum (REIIF) The REIIF date slots have been temporarily booked for next year in the week 5-7th June 2024 but only over 3 days. The delegates at Ordinary meeting on 3^rd August confirmed that the conference will be run in partnership with RDA Orana with MERC’s Ordinary meeting being held on first day 5th June 2023, followed by site visits, networking dinner in evening, then a conference day for councils, politicians, experts and having non members and potentially new members attend as observers, then the business/industry day is on 7^th June 2023.

COVID-19 Virus Impact on MERC – In 2023 MERC will be resuming its’ meeting cycle activities in the normal manner. What this means for MERC delegates is that 2023 will have quarterly meetings as “face to face” meetings with use of zoom in exceptional circumstances. Executive Committee meetings will be by zoom means as determined. A lot of value is gleaned from being at a meeting in person and this can be lost when delegates attend by zoom. The focus will always be on giving delegates an opportunity to attend meetings. However, delegates must be present to vote for the AGM in view of the voting system in the constitution.

Speakers for Next Meeting in Sydney – The Ministers for Natural Resources, Planning, Climate Change, Energy, Treasury & Local Government will be approached to speak in November whilst in Jubliee Room, NSW Parliament House.

Inland NSW Growth Alliance (INGA) (formerly Orana Opportunity Network – O2N) – MERC is trialling as a Bronze Member of INGA for 12 months. Their Newsletters are available on their website on rdaorana.org.au.  

CRC Transformation in Mining Economies (CRCTiME) Post Mining – MERC is a partner with CRC TiME on a no cost but consultative basis. They provide quarterly updates on progress with an opportunity for members to join webinars, workshops, surveys etc. See Website www.crctime.org.au

Executive Officer Services Replacement. The Executive Committee has commenced the replacement process for an entity to provide Executive Officer services, need an ABN and relevant insurances, part time focus, utilising LGNSW Management Solutions to help with the engagement. LGNSW Management Solutions Christian Morris consultant has advised that there were 6 individuals and 2 with multiple individuals in the applications. Arrangements will be made for the applications to be assessed by the Executive Committee when all are available, hence the delay with some overseas or unavailable during September 2023.

Engagement of Future Together Group (FTG) & Three Pillars Advisory. MERC has engaged Martin Rush and Amer Hussein from FTG and Three Pillars Advisory to undertake a review of MERC as follows:

• (1) Review and refresh MERC’s value proposition, sharpen the future strategic planning review processes and membership derived value.
• (2) Review Constitution to:
  • Support organisational effectiveness.
  • Facilitate greater membership and external cut through.
  • Enhance direct and in-kind resourcing.
• (3) Develop a Policy Platform Structure Plan:
  • A policy gap analysis – Local Government Interest in mining & energy.
  • Prioritisation of policy – relevance to current and/or prospective members.
  • A policy and position paper roadmap in short-medium term.
• (4) Update MERC Financial & Resourcing Plan.

 

Reports have been received from Three Pillars Advisory for Items 1, 2 &4 and FTG for item 3. The recommendations are many and will be assessed when the Executive Committee meets to consider the Executive Officer applications possibly in a face to face meeting in Central West in late September early October, to be arranged when all Executive Committee are available. It is a timely review with new State Government and councils grappling with issues associated with the roll out in some areas of renewable energy developments and new EO.

RDA Orana

Whilst the Central-West Orana Renewable Energy Zone (REZ) during this early development stage has many benefits, it also brings some challenges. The project is expected to bring up to $5 billion in private investment to the region by 2030. At its peak, the REZ is expected to support around 6,000 construction jobs in the region, however this could be as high as 8,000.

As the project moves forward, the finer details are being established. Following a Central-West Orana REZ Steering Committee meeting last week, terms of reference were finalised for four new working groups: Accommodation, Environmental, Roads and Transport, and Social.

The Accommodation Working Group will focus on the accommodation shortage for itinerant workers involved in the project and look at innovative housing solutions to meet current and future needs.

The Environmental Working Group will consider water, waste, wastewater, and construction water issues.

The Roads and Transport Working Group will investigate the impacts of increased heavy vehicles on the local and regional road network.

The Social Working Group will focus on issues such as policing, health and food supply, with the large number of workers involved in the project.

Membership of the groups will be a whole-of-government approach consisting of Local Government and State and Federal Government Departments and related agencies such as Energy Co.

 

Mining & Renewable Energy articles

“NSW to Hike Coal Royalties to Raise Billions for Budget” article by Duncan Murray & Peter Bodkin 6^th September 2023, AAP. “Coal royalties will be hiked in NSW for the first time in almost 15 years, delivering a billion-dollar boost for the state’s ailing budget. Treasurer Daniel Mookhey on Wednesday revealed coal royalties would be increased by 2.6 percentage points from July next year, delivering taxpayers an expected windfall amid high global coal prices. The change would leave the state budget more than $2.7 billion better off across the four years starting from 2024/25, the government said.

But Mr Mookhey said households could expect to see a negligible increase – worth an average of less than $6 per year – in their electricity bills from higher coal costs despite Labor not renewing a cap on prices for the commodity. The coal royalty increase will coincide with the expiration of an emergency domestic coal cap put in place by the former coalition government in December last year.

That measure to limit the wholesale price of coal was rolled out in an attempt to bring spiralling power costs under control as the war in Ukraine sent shockwaves through the global energy market. The new coal royalty rate in the state will be up to 10.8 per cent, with discounts applied for underground mines. The government said the change was developed after consultation with the mining industry and key trading partners.

Mr Mookhey said the feedback from coal producers was that it was a “manageable change”, defending suggestions Labor was going too soft on the industry. He said the shift was a fair outcome for the state and replaced an out-of-date royalty regime last updated in 2009. “The new scheme will make sure the people of NSW share in the wealth their resources create,” Mr Mookhey said. The money would be spent on essential services and providing cost-of-living relief to families, the government said.

NSW Minerals Council chief executive Stephen Galilee said the industry had consistently asked for the existing royalty regime to be maintained. “The increase in coal royalty rates announced today by the NSW government will impose a significant additional impost on coal producers at a challenging time of lower coal prices and increased operating costs,” he said.

Finance and Natural Resources Minister Courtney Houssos said coal remained a key part of the state’s electricity network and the new rates balanced increasing revenue with the ongoing viability of the sector.

The Minns Labor government has been priming taxpayers for a brutal budget, weighed down by growing debt, rising interest rates and a fast-rising bill for public sector pay increases.

Mr Mookhey previously said the state’s two remaining AAA credit ratings were under pressure with the budget forecast to be $12 billion in deficit for 2022/23.

Queensland recorded a $12.3 billion surplus for the last financial year after the state’s Labor government introduced new, progressive royalty rates. In contrast to NSW’s fixed-rate royalty system, Queensland operates tiered rates of up to 40 per cent that vary depending on coal prices.

Greens energy spokeswoman Abigail Boyd said the NSW increase was an “insult” and the Labor government had left too much potential income on the table. “The Greens have been calling for an increased and progressive coal royalty structure that would bring in increased revenue similar to that enjoyed by Queensland,” she said.

Climate Energy Finance founder Tim Buckley said the northern state ran the preferred model, which delivered major windfalls at times of high prices while easing pressure on producers when prices were low. “(We have) long been calling for a progressive NSW coal royalty scheme to generate revenues for alleviation of cost-of-living pressures and energy poverty in the state, following the leadership of Queensland,” he said.

“Road to Renewables: Deal Struck to get Massive Turbine Parts & Transformers from Port to REZ” Sophie Vorrath, Renew Economy, 3^rd September, writes “New South Wales Labor has secured a deal to ensure the state’s roads are up to the job of carrying load after load of huge and hefty wind turbine parts and massive transformers, often trucked hundreds of kilometres to their destination in regional renewable energy zones.

EnergyCo said on Monday that it has finalised a Memorandum of Understanding with Transport for NSW (TfNSW) to upgrade the state’s road network in consultation with communities, councils and road users during construction of Renewable Energy Zones.

Already, roads around Australia are being put the test by increasingly enormous wind turbine components, including 80-metre-long blades that weigh 32 tons, ferried by 92 metre-long “blade-runner” trucks that – with their load included – weigh closer to a total of 100 tons.

Transporting these blade parts, along with turbine tower parts that require a height clearance close to seven meters, is a feat of logistics that comes at a big cost to developers, often including the price of police escorts. It is also a source of concern for the communities who use the roads daily.

But as more and more major wind farms reach development stage in New South Wales, and as major grid upgrades get underway, EnergyCo wants to get ahead of the problem and prevent it from becoming another potential speed-hump to progress on renewables.

Individual developers will still be responsible for meeting each project’s road haulage requirements and mapping a feasible route from port to site. The “Port to REZ” MoU, meanwhile, will coordinate and facilitate upgrades to road infrastructure as needed to ensure they can support the transportation of over-sized and over-mass (OSOM) components to REZs and priority transmission network infrastructure projects.

The agreement will also help identify the best routes for transportation of these enormous bits of wind farm and transmission line kit and develop a strategy and framework to manage their delivery efficiently and safely. “The Port to REZ MOU between EnergyCo and TfNSW is another example of how we are taking a whole-of-government and community-focussed approach to delivering a clean, reliable and affordable energy system,” said EnergyCo chief James Hay on Monday. “It complements EnergyCo’s agreement with the Department of Planning to establish dedicated resources for assessment of major energy projects in NSW REZs, and EnergyCo’s partnership with the Port of Newcastle to understand the logistics required to support renewable energy development in NSW.”

Anthony Hayes, executive director, regional, for Transport for NSW says the “transport task” for wind and transmission projects is substantial and needs to be carefully managed. “For many of these projects, hundreds of massive components will need to be safely and efficiently moved across our road network,” Hayes said. “By working together, we will ensure the best routes are identified and ready to enable the manoeuvring of these key components to their destinations in the Renewable Energy Zones, with minimal impact to the community.”

“Eraring is more about Shock & Equity than Lights Going Out: Batteries and Bowen can Help”.Giles Parkinson, Renew Economy writes, 6^th September” Let’s make this pretty clear, because the Australian Energy Market Operator and the NSW government already have said  in the past week: The lights are not going to go out if Australia’s biggest coal generator, Eraring, closes as flagged in late 2025. But there might be other reasons to keep it going.

For one, there is the self-interest of Origin. Most people assume it is losing money hand over fist from operating the 2.88GW plant, but in the last year it made money, thanks to high wholesale prices and the coal price cap. Just how that evolves into the future no one knows. Other estimates suggest it might cost $400 million a year to keep it open – former energy minister Matt Kean suggested $1.5 billion a year, but that was only at the height of the energy crisis when coal got into silly pricing territory.

Origin has estimated that the capital cost of keeping the station going is around $250 million, to which you must add any special upgrades and make calculations about the cost of coal and wholesale prices. Origin, it should be noted, is used to being “short” in the market. They must be good at contracting. And then there is the Brookfield factor, the new Origin owner that needs to negotiate it way around regulatory and competition issues to take the control of the company and embark on its planned $30 billion renewables and storage investment. Does it really want coal sooting up its green credentials?

So why is the NSW government bothering at all to talk to Origin? Mostly because this is about affordability and equity issues. If it can strike the right price with Origin/Brookfield to keep, say, one or two units spinning in reserve for an extra summer or two, it can be confident there will be little in the way of price gouging by the market.

That will happily get the Labor government past the next election in early 2027. But in a strong signal of the steep learning curve that NSW Labor has followed since talking about a “buy back” of the plant in the lead up to the last election, it is now talking about the advice it has received, and followed, from the industry over the last few months.

This was recognised by energy minister Penny Sharpe in the latest episode of RenewEconomy’s weekly Energy Insiders podcast, recorded on Wednesday. “We spent a lot of time gathering the wisdom of many people in this industry. And it’s an industry that’s new to me … I wasn’t the shadow spokesperson (for energy) prior to the election. But, you know, a lot of their wisdom has been picked up and was reflected in the checkup.”

Indeed, NSW Labor has discovered there is a whole bunch of things it can do to reduce the risk on reliability and prices, and equity. One is reforming the planning regime, to ensure that wind and solar and battery projects don’t get stuck in the bureaucratic vortex.

Another is opening the path for more wind and solar projects to be connected to the existing distributed or local networks, as advocated by Essential Energy boss John Cleland, in another of RenewEconomy’s podcasts this week.

The third, and possibly most significant option, is dealing with the issues of equity. A lot of this is outlined in the response to the O’Reilly health check on the grid. It includes co-ordination of consumer energy resources – rooftop solar, battery storage, energy efficiency – and making sure that renters and low income and other vulnerable households are embraced in this transition. Not only does that protect their interests, but it also boosts grid reliability, and support for the transition.

“There are parts of the checkout that didn’t get a lot of mainstream media attention,” Sharpe told the podcast. “It’s about really concentrating on focusing on the opportunities in terms of consumer energy resources, we’re going to be doing a strategy about that. But more than that, I’m really keen just to harvest the enthusiasm within the community for the transition, and how we can … help them better access that and deal with the equity issues that are built into that.”

She said later: “The support for the transition within the communities is dependent on how they’re feeling and experiencing that transition. As we know, costs and electricity prices have been going up, we know the best way to get them down is to get more renewables in as quickly as possible.”

There is also the political exposure to the small business market. In energy terms, this is known as the C&I market – commercial and industrial customers – that are particularly vulnerable and have been worst hit by the surge in wholesale energy and gas prices.

NSW could save those customers a lot of money – and dodge a lot of political grief – by paying them to install a battery at their premises – it would deflect their exposure to peak prices, allow them to store on site solar, get protection against local outages, and beef up the security and resilience of the grid.

It’s clearly much better to spend tens of millions on local batteries than the mooted hundreds of millions to Origin and more coal fired pollution. And if prices continued to be a worry, there is even a a potential role for federal energy minister Chris Bowen to step into the fray.

About five years ago the state Queensland government was being railroaded by soaring energy prices in the local grid, so it rang up at least one of its state-owned generator companies and told it to dial down the bidding strategies – and wholesale prices fell in an instant.

Bowen is the minister of the government that owns all of Snowy Hydro, which dominates the peaking generation market, through its portfolio of gas and hydro generators, and usually sets the price when they soar into the troposphere during evening peaks and other scarcity events.

Snowy controls that market so completely, they even sell insurance against their own bidding practices. And the closure of Eraring, even if it didn’t lead to blackouts, presents potentially more opportunities to exercise their control over the market and fill their depleted coffers.

But Snowy Hydro owes Bowen, and the rest of the country, a very big favour for the way they have completely stuffed up and mismanaged the Snowy 2.0 project, with massive delays and even bigger cost over-runs.

It’s not entirely certain that this is within Bowen’s powers. But if Snowy could pull its bidding head in, then that could avert a lot of damage to people’s wallets, and to the general public’s acceptance of this complex energy transition.

As Energy Insiders co-host and ITK principal David Leitch notes in this week’s episode: “It’s a people business, and I hope that whoever’s in charge of it has got the skills to get the job done. Because quite clearly, the hearts and minds part of it’s just not been won now.”

“Farmers are Famously Self Reliant. Why not use Farm Dams as Mini Hydro Plants?’ 7^th September 2023, article by Nicholas Gilmore, Martino Malerba & Thomas Britz, UNSW. “Farmers often pride themselves on their self-reliance. When you live far from the cities, it makes sense to do as much as possible yourself. Australia’s sheer size has meant many remote farms have long been off grid as it’s often simply too expensive to get a power connection. But for those still on the grid, there are now new options.

As solar gets cheaper, more and more farms are aiming to become self-reliant in power. But until now, getting fully off the grid has had a sticking point – solar intermittency. Solar power might be cheaper than ever, but if you don’t have storage or backup, you’re still reliant on the grid when the sun doesn’t shine.

Batteries are a compelling solution. But they might not offer a full day’s backup and come with concerns about fire risk and waste. Generators offer reliable backup. But they too have downsides – they have to be resupplied and produce harmful emissions.

For farmers, there’s now another option: connect one of your dams to a river – or link two dams together – to create a small pumped hydro plant to store electricity from solar to use at night. The water in your dams could offer yet another form of self-reliance.

Our new research has identified over 30,000 rural sites where micro pumped hydro could work. A typical site could produce two kilowatts of power and store 30 kilowatt hours of energy – enough to run a typical home in South Australia for 40 hours.

Micro pumped hydro is surprisingly simple: two dams, a pump and a turbine.
Author provided, CC BY-ND  Massive to micro? Yes, pumped hydro can work on farms. Pumped hydro is essentially turning hydroelectric power into a battery as well.

Take two reservoirs, where one is higher than the other. When you have extra solar power, you store it. How? By using the energy to pump water uphill to the top reservoir. When you need power later, you release water down to the lower reservoir and produce electricity with a turbine.

At large scale, these plants are an established and efficient way to store energy, though they can suffer from cost blowouts, as in the Snowy 2.0 scheme. Queensland’s government is planning massive pumped hydro schemes to act as batteries. Until recently, small-scale pumped hydro hasn’t made much economic sense.

But the steadily falling cost of solar means the numbers have changed. It’s now more cost effective to get larger arrays. And that opens up opportunities to find ways to store surplus electricity generated in daytime. For farmers, another opportunity is the ability to use existing dams and reduce pumped hydro construction costs.

If it’s cheaper, it’s much more viable. Early research on solar-powered irrigation systems using pumped hydro suggests the payback period for this kind of energy storage could be up to four times shorter than for batteries. What’s the catch? As you might have guessed, this solution depends on the size of existing farm dams and rivers, and topography of the land.

The steeper the slope between the two water bodies, the more useful the system will be as energy storage. To get the most out of these systems means finding the sites with the most potential value. And it’s likely the solution won’t work for farms on flat ground – you need a drop of at least 20 metres.

You’re probably wondering how this stacks up financially. We compared a micro pumped hydro system with 42.6kWh capacity and able to discharge 3.6kW to a commercial lithium-ion battery, the Tesla Powerwall, able to store 13.5kWh and discharge 5.0kW.

We found micro pumped hydro storage was 30% cheaper than a battery if locally generated solar was regularly needed overnight – such as to power a 24/7 irrigation system.

Our research is the first continent-wide assessment of potential pumped hydro farm dam sites. How did we figure out how many sites would suit micro pumped hydro? The magic of maths. We used algorithms from graph theory, as these are used to model networks, and set them loose on a 2021 survey of 1.7 million Australian farm dams. We didn’t want to raise people’s hopes if their dams weren’t suitable, so we set the minimum capacity at 24kWh (like a typical home battery after efficiency losses) and with a minimum slope of 17%, to make it price competitive with a battery.

That’s how we came up with our figure of 30,000 promising sites, including dam-to-dam and dam-to-river sites. Dam-to-river sites are a good option if you have a dam at a reasonable elevation above a river – you can pump water uphill from the river and return it later to make power. What’s next for this approach?

You can make this approach more efficient by using new all-in-one hardware, such as combined turbines and water pumps, as well as integrating it with smart irrigation management. To be clear, this solution won’t work for every landholder. If you’re farming wheat on flat plains, you’re unlikely to have the slope needed to make it work.

If you’re considering getting storage to go off grid, it’s essential to consider the pros and cons of each technology and how it would suit your local conditions. For instance, if you’re in a drought-prone area with limited groundwater, it may not make sense to install pumped hydro. During a drought, you may well need the water on the farm. Our research assumes 70% of the water in the dams is available for use, which does not account for droughts or irrigation needs.

But for some landholders, this may be the missing part of the puzzle. Wind and solar installation are skyrocketing [around the world]. This, in turn, is boosting demand for cost-effective energy storage. Given there are 30,000 suitable farm dams in Australia alone, it’s likely this technology could play a valuable role around the world – especially for farmers in remote areas or where grid connection is too expensive. 

 

 

 

Disclaimer The comments and details in the articles in this newsletter do not reflect the views, policies or position of the Association or its member Councils and are sourced and reproduced from public media outlets by the Executive Officer to provide information for members that they may not already be exposed to in their Local Government areas.       

Contacts Clr Kevin Duffy (Chair) cr.duffy@orange.nsw.gov.au or 0418652499 or Greg Lamont (Executive Officer) 0407937636, info@miningrelatedcouncils.asn.au.