Energy Queensland Limited

RAPS Conference Syd 21/22 March 2017

Bob Darwin, Energy Services

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Bob DarwinManager Emerging OpportunitiesEnergy Queenslande: bob.darwin@energyq.com.aum: +61418959356

THURSDAY ISLAND

BIRDSVILLE GEOTHERMAL

WINDORA DOOMADGEE

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Topics to consider today

1. Delivering improved value for customers ( 100 cents )

2. Developing sustainable commercial partnerships & opportunities

3. Renewable pathways and disruption

4. Technology & Business Model Innovation

….. In a rapidly changing environment ( tech, policy )

….. With significant challenges ( environment )

….. Lucky we have smart people, so suggest we

collaborate to accelerate better customer outcomes

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What is Energy Queensland?

Energy Queensland has three

operating divisions…

2.1 Million Customer

Connections

$24 Billion Assets

4.8 Million Population

Served

Network – connection and supply of

electricity to 2.1 million customers across

Queensland

Retail – sale of electricity to

approximately 733,000 customers in regional

Queensland

…and significant financial and

operating characteristics*

Energy Services – provision of

new, innovative products and services and

expanding the overall market, particularly in

regional Queensland

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Business Overview – Service Area

Energy Queensland is one of the largest electricity distributors in the

world, with unique, diverse and challenging environmental,

geographic, and operating characteristics

Geographic Area

Australia 7.74 million km2

United Kingdom 224,820 km2

Queensland 1.7 million km2

Distribution Network Area

Ergon Energy 1.7 million km2

United Kingdom 130,395 km2

Energex 25,000 km2

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Business Overview – Network

Energex

Network

Ergon Energy

Network

2.1 Million Customer

Connections

6,996 MWPeak Demand

37,308 GWhEnergy Delivered

33Isolated Power

Stations

72Bulk Supply

Points

571Zone Substations

1.7 MillionPower Poles

189,000 KMOverhead Lines

26,400 KMUnderground Cables

3 Control

Centres

148,000Distribution

Transformers

3 Customer

Solution Centres

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Stakeholder and Community Expectations

Queensland customers are

changing how they use

energy

Rooftop solar and

home batteries

Better access to

renewable

investments

Tariff and pricing

innovation

Home energy

management

systems

More efficient

networks

Advanced metering Demand side

response

management

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Purpose statements

Energy Queensland’s Vision and Purpose

Energy Queensland at the

core of how

Queenslanders choose to

use electricity

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EQL Owns and Operates 33 Isolated Power Stations

• All power stations use automotive diesel to

drive the generators and we're currently

investigating alternative and renewable

technologies to support them. Some

stations are using alternative power sources

in addition to diesel:

• Thursday Island - uses diesel and wind

generation

• Birdsville - uses diesel and Organic Rankine

Cycle (geothermal)

• Windorah - uses diesel and solar

(concentrated photovoltaic dishes)

• Doomadgee - uses diesel and solar

(photovoltaic panels)

Capacity of isolated power stations

• The installed capacity of power stations ranges from 260 kilowatts (kW) to 9.55 megawatts (MW). Thursday Island is the largest power station at 9.55MW with the next four largest sites at 1-2MW installed capacity and the rest are in the order of 300-1000kW.

• Together, these power stations produce approximately 101,000 megawatt hours (MWh) of energy per annum.

Staff at the isolated power stations

• All stations are monitored remotely and range from having a permanent crew to a part-time power station attendant responsible for basic maintenance

• Land availability is an issue

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Business Overview

Isolated Systems Off-Grid Network

Vertically integrated business

33 diesel-fired power stations for 38

communities.

~20,000 residents across 39

communities (including Weipa)

Only 7000 customers (<1% of all

Ergon customers)

Mostly diesel generation (~28 million

litres/year)

Small amount of Solar, Wind and

Geothermal

46MW installed capacity

110GWh annual generation

Peak demand ranges across

communities (68kW to 4.2MW)

Different climatic conditions and

renewable resource availability at each

site

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Business Overview - Operations

Bedourie Power Station

900

kms

1,200 kms

Cairns

Head office in Cairns

Depot on Thursday Island to service

Torres Strait Islands

Local resident power station

attendants

Maintenance support provided from

Cairns - fly to remote locations

Inside the fence – generation

Outside the fence – distribution

(poles and wires)

Metering and street lighting

Customer engagement and energy

conservation

Retail (EEQ)

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Complex Business & Operational Challenges

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Sounds easy, however

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Remote Communities

Coconut Island

Pop. 180

Demand. 225kW

Bedourie

Pop. 150

Demand. 513kW

Thursday Island

Pop. 2,800

Demand. 3,800kW

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Our Assets - Diesel

Coconut Island

Power supply to the remote communities is predominately from

diesel power stations

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Our Assets - Renewable Generation

Coconut Island

Thursday

Island Wind

2 x 225kW

Vestas Wind

Turbines

Windorah Solar

Farm

130kW

Concentrated Solar

Doomadgee Solar

Farm

264kW Fixed Flat

Plate Solar

Birdsville

Geothermal

80kW Low

Temperature,

Wet Geothermal

Plant

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Strategic Planning – Diesel Reduction

Bedourie Power Station

Low Penetration

High Penetration

Beyond 2025

Remove

Risk

Sustainable

Renewable

Solutions

~ Zero

Diesel

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O&M Challenges Remote Sites

Safety

Civil unrest in isolated and remote communities

Power Station attendant training

Aircraft charter, helicopter over-water operations

Logistics

Planning of works, capex and opex (unplanned)

Remoteness of sites, communication, isolated work

Road closure due to monsoon season, Island access

Compliance

Remote and isolated work legal obligations

Communications, limited connectivity

Environmental obligations and management of hydrocarbons

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Blue Sky

Accelerate

Customer focus

Strategic

Partnerships

Technology

Innovation

Funding

Innovation

Balancing

VPP

Sustainability

Demand

ManagementLeverage

Grid

Sunk

Costs

Policy

Leadership

Proof of

Concept

Control

HEMS

Collaboration

Profit

RoI/RoA

Risk/Security

Pricing

Regulation

Business Models

BOOM, PPP, abc

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Some thoughts for consideration & further discussion

• We know many/most of the solutions/answers already ( its not rocket science )

• Its an optimization/math challenge ( grid + distributed generation + storage )

• Smart teams – design, engineering, operations, financing …

• Must leverage the $100billion + sunk investment ( paid for by customers )

• Consider edge of grid ‘whole of communities’ needs

• Consider how we engage, incent and motivate customers

• Consider realistic trade offs

• What is the optimal tariff approach

• Alignment across all 3 layers of government

• Consider cost of complexity Vs costs to deliver

• KISS ?

• Define the value stack and effective share model

• Energy & water – consider together ( energy is big cost for water and water is

great storage for energy )

• Northern Aus collaboration ( plus others )

• Together – YES WE CAN !!

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Its not utopia, but

Perhaps it could be Australia 2020, and

If we can’t solve it together, then

disruption is coming over the horizon, fast

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Questions?

Bob Darwin

Manager Emerging Opportunities

Energy Queensland

e: bob.darwin@energyq.com.au

m: +61418959356

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