Getting the Power To Market Would Entail Construction of High-Voltage Direct Current Power Lines

In the next 25 years, a huge amount of aging coal-fired power generating capacity in Australia must be retired. Huge new investment will be needed to keep Australia's electricity grid from buckling under the strain of rising demand. Making matters worse, grid discontinuities keep electricity prices higher than necessary by preventing low cost power from being delivered to areas of high-demand.

Misallocation of electricity in the grid creates "price separation," or electricity prices in different parts of the country that vary by more than 20%. This is a market failure, plain and simple. The Business Council of Australia estimates this "price separation," caused largely by afternoon air conditioner use, imposes $1.4 to $2.6 billion a year of unnecessary losses on the Australian economy. That's inefficient.

Lack of truly national transmission market and pricing costs the nation $1.4-$2.6 billion a year.
Source: Business Council of Australia

These losses occur because movement of electricity is constrained. Cheap electricity in Queensland is "trapped" there, unable to flow to New South Wales, Victoria or South Australia where it can lower prices in those markets. South Australia has the worst problem. Located at the western end of the eastern grid and subject to large demand spikes due to air conditioner in hot weather, peak electricity prices can rise higher there than anywhere else on the mainland grid. The solution? Connect high-price, high-demand South Australia to low-price, surplus supply Queensland and allow power to flow both ways.

The closest the two state grids come to directly connecting is Roma, Queensland and Olympic Dam, South Australia. These two locations are separated by roughly 1,000 kilometers. As it happens, huge amounts of renewable energy lie between these two points. Northeastern South Australia and southwestern Queensland enjoy an enviable overlap of both strong solar resources and promising geothermal resources. This means there are large areas in Outback Australia where solar and geothermal power can be generated side-by-side, creating economies of scale.

By connecting Olympic Dam to Roma not only would low-cost electricity flow more freely through the grid but huge new clean, green energy sources could be developed. This could be achieved by building high-capacity, direct current power lines similar to those envisioned for carrying Saharan solar power to the electricity consumption markets of northern Europe.

High capacity power lines cost between $600,000-$1 million per kilometer to build. Therefore, the cost of linking up the South Australian and Queensland grids could be paid back in as little as a year, merely by eliminating the $1.4-2.6 billion worth of losses imposed on the national economy by 'price separation.' The secondary benefit would be provision of an energy pathway to market for huge amounts of solar and geothermal renewable energy.

Australia already has the trans-Bass Strait Basslink cable and the the world's longest underground power line in the MurrayLink cable between Victoria and South Australia. Using a rough estimate of $1 million per kilometer (actual costs could be as low as $600,000 per kilometer) a 1,000-kilometer high-capacity direct current buried power line similar to Murray link stretching the 1,000 kilometers from Olympic Dam to the Southeastern Queensland grid would cost about $1 billion.

A 500-kilometer line from Olympic Dam to Broken Hill would cost about $500 million. Given that "price separation" (ie prices in different state markets that vary by more than 20% at a given point in time impose an estimated $1.5 billion of deadweight losses on the national economy, eliminating these losses by unifying the grid along the lines of the Internet would pay for itself in about one year.

The 180-kilometer Murraylink is the world's longest underground power linurraurMurrayLink, the world's longest buried HVDC power line
 Once the cable is buried... ...it has little lasting visual impact
Source: ABB Group
Photos: ABB

DC power lines already exist in Brazil to carry hydro power from Itaipu to Sao Paolo, in the Philippines to carry Leyte’s geothermal power to Manila and in India to carry coal-fired power from Uttar Pradesh to New Delhi. China plans to build a DC power line to bring Three Gorges Dam hydropower to coastal cities.

In the United States, huge DC power lines carry hydroelectricity from northern Washington state down to the huge cities of southern California through the Northwest-Southwest Intertie, which has been in operation for decades now.

Huge amounts of northwestern hydropower
are delivered to Los Angeles via high
voltage DC power lines
Source: US Department of Energy

 

In Australia, this ideally similarly is not new. It's already being suggested by companies such as South Australian geothermal explorer/developer Geodynamics.

Power lines needed to bring hot dry rock power to market
Source: Geodynamics

In the United States, DC power lines may soon carry Wyoming wind power to Phoenix and Las Vegas. In Europe, DC power lines may be built to bring Saharan solar energy to northern Europe. Industry groups eand such NGOs as the GENI Initiative even claim that high capacity direct current power lines have become cheap enough they could span the world like the Internet, becoming a force for world peace by spreading adequate energy supplies for all rather than sparking wars out of concerns about disruption.

To give one example, GENI has drawn up the example below of how a worldwide grid might look. Already, most of the pieces are already in place due to existing national and regional grids. What's needed now is to connect the Russian Far East with Alaska, Europe to the Northeastern United States via Iceland and Australia to Asia.

A global grid of electricity could look something like this, and would
entail connecting Australia to Asia
Source: GENI