Appreciate the questions, @Ashentegra. I have my own opinions,...

Appreciate the questions, @Ashentegra. I have my own opinions, definitely not an AOE, some is previous knowledge and experience of course and I appreciate any corrections or bolt-ons from anyone reading.

1. The widest arbitrage or value uplift in the NEM is in shifting unsaleable off-peak intermittent wind generation to peak demand and pricing with batteries.

Mostly agree. The wind energy generation profile is complementary to both whereas solar and PH are historically inverse. Wind & solar to PHES/batteries will prove the most value to the NEM going forward. Current models are not favourable to batteries operating purely for energy arbitrage, relying on ancillary servicesto provide additional revenue, given the price and time-to-deploy decreasing across the next decade.

While I have not seen the revised Genex offer, AEMO would be very aware of what it can bring to the energy market in terms of stability. Generally speaking, Australia’s existing pumped hydro plants are not providing AS, but they ideally should. From a cold start I’ve mentioned we should hit a conservative 16 seconds, and that’s with the health of the variable turbines as absolute priority, however, I have seen fast starts up to full speed in 1.4-3 seconds, from spinning reserve. When you have a water battery that ramps at 25mw 0.2 second increments then you have a very competitive strategic asset. While it is not feasible to run in spinning reserve all day, of course, these are the types of revenue opportunities those of us who welcome storage developments are cognisant of. Regardless, studies are conclusive that variable-speed turbines are the future in terms of offering AS during generation and pumping phases.

The Reserve Capacity Mechanism and Capacity Credits are undeniable revenueattractors. I think the future answers for value uplift requires a broad generationprofile.
2. W + B gets two charge/discharge opportunities a day into peak pricing periods where S + B only gets one daylight charge opportunity. So, W + B, all else being equal, with generate double the revenue of S + B and run rings around it. This wears out the batterytwice as fast, not necessarily a problem when battery prices are falling 18% ayear.

I don’t believe the two peaks are equal, so your secondary wind charge/discharge opportunity is of lesser value to your first, or vice versa, correct? But yeah, the premise is in line with my understanding and your replacements. However, don’t doubt the value of construction monopolies. If I’m a gamer, I build PHES and long-term storage options knowing you’ll be facing a capex reinvestment decision by your competitors in ~10-15 years. It’s not too different from the solar/wind rush which is will cause issues short-term, but act as a medium-term competition deterrent from competing technology.

It is difficult to model. FCAS in SA in the modern coal era, per annum, was a blip, $~3.8m, this increased to ~$33m in FY2016, ~$70m in FY2017 and now thanks to Hornsdale Battery FCAS almost immediately returned to a stable state at ~$15m. IFN & GNX together can prosper as coal is phased out, but careful comms with stakeholders is a must to ensure projects are in line with state and national strategy. When calculating your LCOS you’re factoring in also your disposal cost or residual value, this is a known qty for PH. I’d appreciate any insights you have here to how best practice could look for replacing batteries.

So I guess a thought to consider, if IFN is long on wind, should it look to partner with a GNX (provided K2H is successful) as it’s PH experts to take advantage of the 5-10 year battery race we’re about to see? Would love to hear your thoughts. I’ve seen LCOS extremely favourable to PH, although I can’t argue there’s a first-mover advantage in getting boots on the ground with a LI battery.

3. Utility solar competes directly with price-insensitive,publicly-observable rooftop solar and is thus a far less attractive investment proposition than wind.

Agree. There are still smart use cases for utility-scale solar, eg reducing evaporation on PH schemes, low-cost pumping, smart geolocation, high irradiationO&M to take advantage of improvements in bifacial panels. We’re going to see a few liquidations, I expect.

While wind is being assessed locally for a variety of use deviations, its intermittent, stochastic nature means a generation profile that causes a lot more planning a grid level than we’ve previously seen. PH can respond to unexpected wind fluctuations and forecast errors within seconds, or fractions of a second as explained above, and, if an Aus market did proceed with day-ahead (that push seems to have stalled, though, right?) it could prove wind is not only best but must be coupled with batteries to reach optimal revenue performance.

While in Vietnam recently I had a chance to view the Bac Lieu 100mw off shorewind farm. It’s beautiful and has been a boon for an area with a very complex energy landscape. Our politics pale in comparison. However, I know there’s alot of internal positivity around the project and I believe we’ll see a steady rollout of sites with mega OS turbines. On the other side of the scale, there’s a 1200mw wind farm, consisting of 226 turbines, planned near Maryborough I watch with interest, given the strength of your aversion.

I love the idea of adding a battery to KRH if it’s capex friendly. Perhaps thatcould be IFN’s buy-in, load a unit from Hornsdale on the back of a Cybertruckto get us started and ‘jump the queue’. My position is that it could bebeneficial and reduce the use of cycles required, regardless of how quick andprecise a Francis variable speed turbine can be, protecting its longevity iscritical to the LCOS. They aren’t cheap, nor is the maintenance. Does thatsound like a plausible scenario? Of course, the GNX K2H may well have alreadybolted with EA. Progress has reportedly been made since November. If it goeswell, they’ll develop the portfolio so we’ll never say never.

Many thanks for the q’s. Looking forward to learning and increasing myknowledge base alongside the forum here, regardless of whether they’recurrently typing superglued to the Sydney Harbour Bridge, or behind a screentrying to increase their personal wealth.

Cheers

J