Two projects are proposed for two Photovoltaic (PV) panel arrays (solar farms) of different size for the generation of renewable electricity. Both use the same technology and would be located on community lands owned by the Whakatane District Council. The solar farms would take advantage of our district’s unmatched solar resources.
The smaller farm (ca. 1-2 Ha) will be of sufficient size to achieve economies of scale and yet supply electricity to our low-income community at rates that address energy poverty. On a per kW basis such a farm would represent a cost saving of 50% relative to a typical rooftop installation. The proximity of the farm to its consumers will allow low transmission costs to reduce charges further.
The larger farm (ca. 6 Ha) is designed to address the imperatives of The Climate Change Response (Zero Carbon) Amendment Bill 2019 and the aspirations of the Whakatāne District Council’s (WDC) Climate Change Principles by demonstrating how Solar PV can displace carbon emissions.
Solar generation is intermittent as the energy source cannot be controlled. When the sun is not shining, electricity needs to be provided by other sources, such as hydro, wind or geothermal. Solar must therefore be a component of the New Zealand electricity mix.
It has a place alleviating electricity shortage in years of low hydro inflows and the difficulty experienced by thermal power stations during the heat of summer (consents prohibit discharging >25°C cooling water to the Waikato River).
Locally, the “mix” refers to pairing the two solar farms with the nearby Matahina hydro dam. The farms exploit high summer sunshine hours, when solar works best, and there is low rainfall when dam levels limit hydroelectric generation. When they are generating electricity, the solar farms allow the dams to reduce output and store limited summer water resources. In contrast when solar intensity is low the dams increase generation to provide alternative renewable electricity to the farm’s customers. Matahina acts as an energy storage system much like a battery except that a battery stores energy chemically. Dams and solar farms complement each other in New Zealand. The use of Li-Ion batteries as an energy storage buffer is considered unnecessary considering the availability of the hydro storage option.
1. PROJECT DESCRIPTION
1.1. Energy Poverty
We know about the low incomes of communities in the EBOP. The farms can be a simple, positive statement by the WDC to central government, that if NZ is serious about addressing energy poverty then efforts should be made to remove regulatory obstacles to Distributed Energy Resources (DER). Since decentralized electrical generation and storage provided by small, grid-connected on-site generators is the way of the future, why are the regulations a barrier?
A typical power bill has several elements that are subject to legacy regulations. These regulations are no longer suitable for an electricity system that is transitioning from a centralized system to DER. Figure 1 shows the breakdown of these elements.
Figure 1, breakdown of typical consumer power bill, source Electricity Authority
The cost of generation (30.5%) includes land value, capital outlay for transformation equipment, maintenance, and fuel. A solar farm on low value communal land, equipment funded at low sovereign rates, with minimal maintenance requirements and using free solar resources should reduce this cost to 15%.
The transmission charges (9.9%) do not apply to this project because the electricity generated does not pass through any TransPower assets on its way to local consumers. Subsidies that support high-income cities and their industry at the expense of our low-income region are a perverse distortion of the Transmission Pricing Methodology (TPM) Let those who benefit pay for the services they get from TransPower.
The Distribution Charges (26.2%) will be calculated downwards to reflect the proximity of the farm to its consumers. Under current regulations it is not possible to compensate lines companies for distributing electricity short distances from the farm to customers over the Horizon network (Peer-to-Peer trading). This is a political issue that requires Kawerau, Opotiki and Whakatane leaders to engage with local MP’s on behalf of low-income consumers’
Retail costs (16.2%) are also subject to legacy regulations that are unnecessary when the farm is trading with its own customers. The Council Controlled Trading Organisation (CCTO) structure can be applied to operate within “The Code” as a Generator/Retailer. This cost can be reduced if it is not tied to a retail bureaucracy.
Metering of electricity will be via smart devices that record real-time import/export and quality data on a memory chip. These meters are now a feature of modern electricity distribution infrastructure, are Wi-Fi capable and download “big data” to a central server. This data is “owned” by the consumer, not the meter owner. The hardware is owned by others who are currently collecting this data in anticipation of the Electricity Authority waking up to their role as real time managers of NZ’s electricity system. Meanwhile, the high (3.4%) metering charge is that tiny portion of the data used to calculate monthly invoices. There is room to negotiate delivery of this basic information (and more) for consumers’ benefit.
The costs described above are the key targets of the proposed 1 MW solar farm model. The model is scalable and can be used in other locations by other community/iwi groups.
The political aspects of these cost reductions should not be controversial, but they are. Alternative means can be adopted now while the incumbent vested interests drag out the inevitable transition to DER. This is wasting time at the expense of low-income consumers.
2. 1 MW FARM AT SHAW ROAD
The first proposal is for the construction of a small solar PV Farm built at ½ the per kW rate of a typical domestic rooftop PV installation. That is $1490/kW versus $2900/kW. Consider the labour costs of installing multiple arrays on one site at ground level compared with installing smaller arrays on multiple sites, working at height on rooftops, and wiring through confined spaces. Then add the power of bulk purchasing of equipment to see why there is a large difference in installation costs.
Vector PowerSmart have generously provided details of the cost of installing a nominal 1 MWp (peak power) farm. Both proposals are based on these calculations. The proposed location is a triangular plot of land, presently grazed, next to the oxidation ponds at Shaw Road.
Figure 2: System statistics and location of 1MW Farm beside the Kope Canal, Shaw Road
Because there is a connection point 1 km away at Mill Road, the connection costs to the Horizon grid would be minimal.
Formal conversations with iwi cannot start without WDC approval in principle.
Figure 3: Financials as estimated by Vector PowerSmart
Figure 4: Proposed layout of the solar arrays on the Shaw Road site with PowerSmart estimates.
Intermittency is one of the major criticisms of solar electricity generation. Electricity generated from solar PV is highly susceptible to sunshine hours, weather, and the seasons. The usual solution to this variability of supply is batteries.
Figure 5: The seasons have an adverse effect on electricity generation of a 1 MW Farm.
The Hydroelectricity assets located throughout New Zealand can be considered a large peaking and storage plant for electricity. One of these, Matahina Dam, is close by and capable of acting like a battery, storing and discharging water as required to meet demand.
Forming a relationship with TrustPower (who own Matahina) will help to meet the intermittency of the solar issue. In return, the farm would allow the dam to store water in the dry summer periods.
TrustPower also operates an electricity sharing scheme called “Solar Buddies”. This is the best effort of all the NZ generator/retailers to address the inflexibility of the current Electricity Regulations. If TrustPower agrees to extend the Solar Buddies scheme, it would be a convenient vehicle for managing the administration of selling to the farm’s consumers at low rates.
Solar tracking devices direct the panels towards the sun. We live in a low latitude where the sun’s position in the sky varies dramatically between summer and winter months. But because we have relatively abundant radiation, New Zealand lends itself to solar-tracking technologies. The farm offers opportunities for Kokiri entrepreneurs who have already identified this unique situation to test their inventions. Generally, a solar panel system with a single-axis solar tracker (moving in the east-west direction) improves performance by 25–35%. A dual-axis tracker (acting in the north-south direction as well) increases performance by another 5–10%. The long-term benefit of increased production over time is enough to make the initial cost and maintenance fees worth it.
Figure 6: Estimated Year 1 hourly system output
A cost-benefit analysis would be required to verify this.
The difficulties posed by the effect of current regulations on the farm will demonstrate to government how, at local government level, the current regulations are no longer fit for the Distributed Energy Resource (DER) environment.
Individual owners of solar rooftop PV (ratepayers and voters) are similarly unable to share locally produced electricity with their neighbours. The benefits of transmitting over short distances are not being realized by consumers.
2.4. Transmission Pricing Methodology (TPM)
Power that is generated where it is consumed is usually worth twice that sold to the grid, because a large portion of the cost comprises transmission and distribution charges.
Current Electricity Authority regulations impose fixed charges for electricity transmission. They include a TransPower charge for using National Grid assets.
Industry moves closer to generation resources when the distortions resulting from TransPower’s fixed-pricing subsidies are removed. Tasman and Tiwai are examples of industrial users that have deliberately built close to generation sources. There is the potential for new heavy industry wanting to establish in the EBOP.
New generation sources will move closer to industry, e.g. rooftop solar PV on Auckland Industrial Parks. Wind turbines on the Waitakere Ranges would allow Aucklanders to reduce their dependence on Waitaki electricity. Top Energy is expanding its Ngawha Geothermal Plant offering low income Northland consumers relief from the TransPower impost. Leading to a more efficient national Electricity System. Low income regions do not need to subsidise others. There are solutions available for them to minimize transmission charges.
2.5. Bringing the benefits home
The Farm model is designed to generate and distribute locally over local lines company low voltage assets. Line losses are negligible when distances are short. The Farm’s electricity does not go anywhere near the TransPower Grid assets and so is not subject to their high infrastructure costs.
A similar 1 MW Farm on their lands near Taneatua would be suitable for Tuhoe allowing them to trade cheap electricity with whanau. They would have minimal Horizon grid use charges and would also benefit from Matahina’s “battery”.
It is woeful that Kawerau’s domestic consumers, many of whom are also caught in a poverty trap are paying high transmission charges although geothermal electricity generation is literally “over the fence”.
“TransPower’s legislative right to recover sunk costs is becoming a major barrier to efficient transmission pricing reform” – Energy Trusts of New Zealand.
The Farms would be directly affected by these inequalities, supplying BOPLASS with evidence to present a case for urgent reform to central government.
Although the regulations are not a showstopper, the bureaucracy introduces unnecessary costs that degrade the energy poverty initiative.
2.4. Smart Technology
Nova Energy are completing the roll out of high specification smart meters to the outstanding Installation Control Points (ICP’s) in our area. The real time data at each home meter box gives us an opportunity to monitor and educate consumers on their electricity use. It allows the Farm administrator to manage the import of dispatchable electricity and record the flow of electricity to customers.
2.5. Local Opportunities
“Big” data will contribute to the inevitable adoption of a New Zealand wide system to efficiently manage our electricity system. There are opportunities for local software developers to produce apps for this and other cost saving purposes using the Farm and customer smart meters at the micro level as a trial. This could be scaled up to a NZ wide Electricity Manager processing real time data to balance the National Grid.
Including a training function in the farms operations expands the downstream installation benefits of rolling out the model to other locations, and opportunities for the practical software and data skills needed to meet our unique situation.
As NZ moves closer to all electric systems, having local electricity generation that can operate in isolation and independently from external disruption is a natural bonus of DER.
3. 10 MW SOLAR FARM AT THE AIRPORT
The second project is located on low value land and is large enough to capture more economies of scale. But it has different aims. Because of its peak generation capacity, the local grid might not be able to cope, so the farm will have commercial utility status. Like the smaller farm, it can pair with Matahina, allowing water to be stored in years of low rainfall. This demonstrates how solar PV and other DER generation can be a positive component of the NZ electricity mix.
Figure 4, location of 10 MW Farm 400 M north of the airport runway
Whakatane Airport is a joint venture with the Crown. The partner will need to be involved in altering the Council Controlled Trading Organisation (CCTO) under which the airport business operates. The CCTO has advantages: it is a going concern that could be adapted to incorporate the farm’s commercial side, and it is a legal entity capable of fund-raising. The Crown may consider the project worthy of a funding contribution because of its timely alignment with current government emissions policies.
A common issue raised on behalf of pilots is glint and glare off the panels. This has been addressed (see FAA study). PV arrays are now installed at Gatwick, London South End, Brisbane, Tallahassee, Florida, and Cochin Airports.
Connecting to Horizon’s Mill Rd connection point will require an upgrade to the existing cable at a cost of about $200,000.
Compared to a fixed mount, a single-axis tracker increases annual output by approximately 30%, and a dual-axis tracker provides another 10–20%. The estimated 14,600 MWh annual generation could increase to 18,980 MWh per year, depending on the final design.
The modular and distributed nature of solar electricity naturally lends itself to expansion options. Provided WDC does not envisage larger aircraft using the airport within 30 years, 100 MW would fit on the seaside of the runway. This size is now standard for Australian installations.
A business hub is planned for the west end of Whakatane Airport, but the east end has sufficient space for about 50 MW of solar arrays.
Since this proposal involves the utilization of council-owned land consenting would involve the use of an independent commissioner and a planning consultant. Low-value land unsuitable for other purposes at the airport is ideal. Council oxidation ponds are a perfect neighbour for the 1 MW solar farm.
Minimal civil works are required. Construction involves driving timber piles into the ground and bolting the lightweight panels onto them. Cable conduit trenches will be laid to a container-sized control room, which is also on piles. Environmental impacts are virtually nil because there are no emissions or noise. The farm operates unattended apart from occasional maintenance visits.
Solar farms are new to New Zealand but are common in Australia and Europe. Evidence of their low impact on the environment is abundant. Once established, the site can revert to sheep grazing under the panels.
Unless fusion nuclear reactors are viable in the next few years the expectation is the farms will outlast the 25-year warranty on the panels. The inverters have a 10-year warranty and are expected to be replaced at some time there-after. At decommissioning minimal remediation works will be required. There are no large concrete foundations to remove as would be the case of a wind farm. The farm is effectively land banking for the duration of the lease.
The risk of consenting holding up installation is low.
4. NZ GREENHOUSE GAS EMISSIONS
An operational solar farm produces no greenhouse gas emissions. However, emissions are involved in the manufacture of panels and other solar components. Nevertheless, detailed life-cycle analysis shows that the life-cycle emissions of solar energy are among the lowest of energy generation technology and many orders of magnitude lower than thermal generation.
The Climate Change Response (Zero Carbon) Amendment Bill 2019 sets emissions budgets with which the solar farm projects will comply. The airport joint venture can offer the government credits that some of their other entities (Genesis, Air NZ) will struggle to meet. How can the government not be an enthusiastic supporter of these initiatives?
Figure 8: Ecotricity graphic showing the annual emissions that NZ needs to remove from the energy mix with its replacement renewable fuels.
5. WDC CLIMATE CHANGE PRINCIPLES
Whakatane District Council’s 2018 Gross Carbon footprint was 3,292.32 tCO2e.
The Climate Change Principles have yet to deliver action plans. But the 10 MW farm will produce enough renewable electricity—in one year—to offset 1,480 tonnes CO2e. This is nearly half of the council’s 2018 gross carbon footprint.
Figure 10: From WDC Energy Audit showing emission sources requiring attention.
5.1. Aquatic Center Gas Emissions
The annual output from a 2.2 MW farm costing $3m would be required to offset the 2018 gas burn at the Aquatic Centre. The size of this farm, 7 rugby fields, presents a stark indication of the true cost gas burning is to the planet.
However, we can replace the gas boilers at the Aquatic Centre with $180,000 worth of heat pumps. That looks like great value in terms of reducing emissions. And, because the cost of gas exceeds the cost of CarboNZero electricity purchased for each unit of thermal energy required, it is also cheaper to operate ($31,000 per annum for electricity compared with $65,000 for gas). Gas use does not stack up economically or environmentally.
5.2. WDC Total Emissions
Whakatane District Council can achieve the benefits of generating our own CarboNZero electricity. We can send a clear sign to the community and the government that solar PV empowers individuals and community groups to reduce emissions.
Cemars have calculated 27.5% (905 tCO2e) of WDC’s carbon footprint is from electricity consumption (see Fig. 10). This is surprising, considering the renewable electricity being generated locally. It is possible that the electricity supplied by Genesis to WDC is tainted with Huntly coal- and gas-fired electricity. (To demonstrate how damaging this is, we would need a 6 MW solar PV farm covering 18 rugby fields, generating CarboNZero electricity, to eliminate this burden.)
Proposals to install solar PV on WDC rooftops should be reviewed. Farms are cheaper by 50%. The 10 MW option will cost $1200/kW, compared with $2900/kW to install on multiple rooftops.
5.3. New Zealand Emissions Trading Scheme
It is not clear whether a WDC solar farm would be eligible for NZ Emissions Trading Scheme credits. As WDC action plans are rolled out (Electric Vehicle Policy, replacement of Gas Boilers at the Aquatic Centre . . .) it is possible that ongoing cash credits would apply. Their worth is difficult to assess:
10 Mar 20 – “The Climate Change Commission says controls on carbon prices should be lifted to about $50 a tonne now.”
28 Feb 20 – “Forest owners – who yesterday called for a $200-a-tonne carbon tax on the burning of coal – say changes to the Emissions Trading Scheme should be signaled in the May budget.”
As NZ transitions to an all-electric energy system, generating Whakatane’s own carbonNZero electricity from its own free fuel (sunshine), using efficient electric devices (heat pumps, variable speed drives), transmitting over shorter distances, built on low-value land, is a cost-effective way to address issues of energy poverty and emissions.
Introducing solar PV technology at this scale enhances the economic benefits.
It demonstrates—at a community level—how simple it is to generate cheaper electricity and displace the emissions that are dominating “climate change” conversations. Community groups can build their own farms, multiplying the benefits.
Whakatane District Council, as a community leader, has the mandate to install both solar farm proposals for their social, economic, and environmental benefits.
In terms of the Annual Plan 2020/21, the installation of the farms could be integrated into the action plans of the Climate Change Principles.