The Battery of the Nation initiative is investigating and developing a pathway for future development opportunities for Tasmania to make a greater contribution to the NEM. ARENA has co-funded six projects with HydroTasmania under the initiative, which are helping to explore locations, finance models, market challenges and opportunities.
Report extract
Australia’s electricity landscape is at the start of a dramatic transition. Older generators are likely to be replaced by new technologies. This transformation is challenging long-held concepts and terminology. Familiar terms often come loaded with preconceptions. Emerging terms can be elastic as the implications (and sometimes entire definitions) adjust to better reflect the purpose and need for new words. Clear definitions are required in a rapidly changing market, and we need to reevaluate our understanding of what is needed to make the system work.
To successfully navigate this transformation we need to challenge pre-conceptions, better understand what will be required in the future and clarify the language used to describe the system. To make this discussion more accessible driving a car is used as an analogy for the electricity system.
As an industry, we need to ensure that we continue to meet the supply-on-demand challenge of the power system as it transforms. Australia’s electricity is currently generated predominantly by coal, which provides baseload supply, supported by gas and hydro, which balance the inflexible supply against the variable demand. Across the National Electricity Market (NEM), wind and solar generation is modest but increasing.
There will be a very different generation mix in the future. The nature of supply and demand – and how it will be balanced – will change. Historically, the focus of balancing supply and demand has been predominantly on ensuring that variable demand is met with available supply. However, as variable renewable energy enters the system, it becomes necessary to consider compensating for variable supply.
The management of variability on the supply side is broadly referred to as “firming”. While firming is a concept that is relatively new to the Australian power system, the underlying principle of responding to supply-demand imbalance is core to the operation of any secure and reliable electricity system. To meet demand in a system with significant variable renewable energy, supply options are required that can start, stop and change supply – quickly, reliably and on-demand (“dispatchable”); and sustain generation over the required period – a number of hours or days (“sustained capacity”). We will also need to support and recognise demand-side response options to cost-effectively manage the total system. We need to develop a more nuanced view of the broad range of options to manage the supply-demand balance in the future NEM.