Hopefully this article is accurate, it looks as though several large battery installations are starting to go in, it will be interesting to follow the progress.
This year is set to be the first in which the capacity of new big batteries starting construction in Australia exceeds the combined capacity of new wind and solar farms.
Big batteries have been getting steadily larger, and their duration – how long they can run at full power – has been growing, too. Last month, Equis Energy and Victoria’s State Electricity Commission signed off on the
$1.1 billion first stage of the Melbourne Renewable Energy Hub, a 600 megawatt battery array with 1600 megawatt hours of energy capacity – enough to run for just over two and a half hours at full power.
A second 600 MW stage could have as much as 12 hours of energy storage – enough to power households through the night.
A week earlier, Blackrock’s Akaysha Energy won federal Capacity Investment Scheme backing for its Orana battery, a 415 MW, four-hour (1660 MWh) battery at Wellington, in NSW’s Central West Orana Renewable Energy Zone. Akaysha is also developing the 850 MW/1680 MWh Waratah Super Battery at Lake Munmorah. Nearby, Origin Energy and AGL Energy are developing batteries with 460MW to 500 MW capacity.
All in all, there are about 5 gigawatts of big batteries under construction, Dixon says, enough to replace the recently retired Liddell coal-fired power station and
Eraring, due to retire in 2025. This makes them the best performing part of the energy transition – alongside the unstoppable juggernaut of rooftop solar.
The bulging pipeline – at a time when
few large wind and solar projects are getting final investment decisions – suggests there is more “firming” capacity coming into the grid than AEMO has assumed in recent reports
warning of increased risks of blackouts and brownouts as coal-fired power exits the grid at an accelerating rate.
There’s an important caveat to this. Big batteries with up to about four hours of storage will increasingly be able to deal with hot summer evening peaks – when everyone comes home and turns on their air conditioners, electric stoves and TVs and demand surges for a few hours.
But much longer duration storage will be needed to deal with long winter lulls – rare periods of low wind and sun that last for days, if not weeks.
Daniel Nugent, head of portfolio development at EnergyAustralia, says four-hour batteries “are going to play a much more meaningful role for energy security, keeping the lights on for that evening peak on that hot summer day”.
But for the winter lulls after most coal plants have closed, the electricity market “still looks incredibly tight”, Nugent says.
“With lots of batteries of four hours, that summer peak will be less of a challenge in the future, but the real challenge is going to be in the depths of winter … that’s when we need that much longer duration storage.
“We just don’t have the technology for that at the moment, so that’s why gas in short bursts provides a key role in that transition. It means the coal plants can come out of the system. It means you have more confidence that you can then retire the coal and the lights won’t go out.”
Lithium-ion batteries have cornered the market for storage of four hours and less, as well as electric vehicles. But they are costly for longer durations, which require different battery chemistries and storage technologies.
Pumped hydro also provides long duration storage, but it needs favourable terrain; projects such as
Snowy 2.0 and
Kidston – way over budget and schedule – deter others.
Some developers are looking to flow batteries – which use liquid electrolytes such as zinc bromide and vanadium – for longer durations. Equis Energy is studying different battery chemistries for the second 600 MW stage of the Melbourne Renewable Energy Hub, which will have eight to 12 hours of storage, says founder David Russell.
Big batteries are flourishing, while wind, solar and transmission projects are stalled, because they are easier to build and get to market, can be put almost anywhere in the grid, and ease transmission network congestion problems that new wind and solar farms often make worse, says Dixon.
The footprint is much smaller, often on old power station sites or wind and solar farms, community opposition is muted, and specialist contractors are refining the art of assembling the battery modules.
Lithium is cheap
Unlike wind turbines, inflation isn’t getting away either – the
price of lithium has fallen steadily for a year. “The pricing that we’re seeing in the market now is actually quite low,” says Akaysha chief executive Nick Carter.
That doesn’t mean there aren’t supply chain problems. The sheer volume of batteries required for electric vehicles and grids, and hundreds of billions of dollars of incentives for clean energy in the US and Europe, makes them inevitable, Carter says.
“Lots of people are signing up and wanting more and more batteries, and suppliers of the cells and the modules they’re all scrambling to increase production capacity.”
This goes for essential items such as transformers, says Equis’ Russell. “Anyone that’s not financially closing this year, and getting purchase orders in for transformers – if they’re telling you they’re going to be operational by 2025, that is very inconsistent with what we’re seeing in the market.”
The role of big batteries is also changing. The first big battery – Neoen’s Hornsdale Power Reserve in South Australia – was ridiculed for only providing a few minutes of the state’s total demand when it debuted in 2017. But its main role was to provide vital system strength and FCAS (frequency control ancillary services) to the state’s grid, and it earned Neoen good profits doing so.
As batteries of longer duration enter the market, they will increasingly shift energy from daytime solar floods – when prices often turn negative – to evening demand peaks when prices soar, says Neil Fraser, head of natural resources, energy and carbon at Commonwealth Bank of Australia, which helped fund the 185 MW Koorangie Battery near Kerang, Victoria.
“To date it’s been FCAS, but we do think that over time, arbitrage is going to be quite an important revenue stream,” says Fraser.
Multiple revenue streams make batteries easier to finance. Koorangie has a 15-year offtake agreement with Shell Energy, and a 20-year system strength contract with AEMO. The expansion of the
federal Capacity Investment Scheme to 23 GW of wind and solar power and 9 GW of storage and other dispatchable capacity means the demand isn’t going away, says Fraser.
Big batteries aren’t silver bullets, but they may be a key part of a more optimistic picture of the grid’s evolution than we often paint.