global credit ratings agency Fitch Ratings has neatly illustrated, that’s not the way things are shaping up.
The report, Disruptive Technology: Batteries, notes that one of the key technologies that will be a major factor in how quickly the energy transition unfolds is already on the fast-track – and showing serious potential to “displace current technology far more rapidly than anticipated.”
And this leaves all sorts of industries – particularly those centred around the extraction and burning of fossil fuels, and the jobs attached to those industries – exposed to huge risk.
“Greatly accelerated adoption of battery technology would be disruptive for sectors accounting for just under a quarter – $US3.4 trillion – of corporate bonds outstanding globally,” the report notes.
“An acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile,” the report says. “And it could change the economics of ‘peaker’ power plants currently used to meet short periods of peak loads.”
As the report notes, these “peaking” plants have traditionally been gas, and oil fired, with the ability to ramp up and down relatively quickly to meet changing loads.
Screen Shot 2016-11-08 at 12.20.15 PM
“These units may dispatch infrequently in some markets but may be economic due to high peak power prices that offset maintenance costs for upkeep,” it says.
“‘Peak shaving’ resulting from battery storage of energy would reduce the peak to off-peak price differential and could eventually lower clearing prices to a point where traditional peakers can no longer compete. Mitigating grid reliability concerns will be the main focus of battery technology but the possibility of disruption among peakers is high.”
For Australia, this has serious implications not just for the nation’s gas peaker plants, but for its LNG industry, which as Forbes oil market analyst Tim Daiss reported on Monday, is already on shaky ground having undergone a project development frenzy based on “what looked like would be years of increased demand amid exorbitantly high prices.”
This includes the massive Wheatstone LNG project, on the Western Australian coast, whose estimated output of the 8.9 million tons per annum (mtpa) have been valued at $A29 billion.
Already, thanks to an oversupplied market and collapsing demand in Asia – oh, and climate change – these projects are looking more and more like overpriced carbon bombs. Add to that the existential threat from battery storage and the picture looks even worse.
But the fallout doesn’t stop there. “For electric utilities and the automotive sector it would be disruptive, potentially polarising the market into winners and losers,” the Fitch report says.
http://reneweconomy.com.au/battery-charged-disruption-risks-leaving-fossil-industry-and-australia-in-its-dust-11398/
The report, Disruptive Technology: Batteries, notes that one of the key technologies that will be a major factor in how quickly the energy transition unfolds is already on the fast-track – and showing serious potential to “displace current technology far more rapidly than anticipated.”
And this leaves all sorts of industries – particularly those centred around the extraction and burning of fossil fuels, and the jobs attached to those industries – exposed to huge risk.
“Greatly accelerated adoption of battery technology would be disruptive for sectors accounting for just under a quarter – $US3.4 trillion – of corporate bonds outstanding globally,” the report notes.
“An acceleration of the electrification of transport infrastructure would be resoundingly negative for the oil sector’s credit profile,” the report says. “And it could change the economics of ‘peaker’ power plants currently used to meet short periods of peak loads.”
As the report notes, these “peaking” plants have traditionally been gas, and oil fired, with the ability to ramp up and down relatively quickly to meet changing loads.
Screen Shot 2016-11-08 at 12.20.15 PM
“These units may dispatch infrequently in some markets but may be economic due to high peak power prices that offset maintenance costs for upkeep,” it says.
“‘Peak shaving’ resulting from battery storage of energy would reduce the peak to off-peak price differential and could eventually lower clearing prices to a point where traditional peakers can no longer compete. Mitigating grid reliability concerns will be the main focus of battery technology but the possibility of disruption among peakers is high.”
For Australia, this has serious implications not just for the nation’s gas peaker plants, but for its LNG industry, which as Forbes oil market analyst Tim Daiss reported on Monday, is already on shaky ground having undergone a project development frenzy based on “what looked like would be years of increased demand amid exorbitantly high prices.”
This includes the massive Wheatstone LNG project, on the Western Australian coast, whose estimated output of the 8.9 million tons per annum (mtpa) have been valued at $A29 billion.
Already, thanks to an oversupplied market and collapsing demand in Asia – oh, and climate change – these projects are looking more and more like overpriced carbon bombs. Add to that the existential threat from battery storage and the picture looks even worse.
But the fallout doesn’t stop there. “For electric utilities and the automotive sector it would be disruptive, potentially polarising the market into winners and losers,” the Fitch report says.
http://reneweconomy.com.au/battery-charged-disruption-risks-leaving-fossil-industry-and-australia-in-its-dust-11398/
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