ARENA to provide $25 million to jointly fund Victoria’s first large-scale, grid-connected batteries
The Australian Government through the Australian Renewable Energy Agency (ARENA) has announced it will match the $25 million by the Victorian Government to jointly fund Victoria’s first two large-scale, grid-connected batteries as part of the Victorian energy storage initiative.
The $50 million in funding will see the rollout of two battery projects which will together deliver 55 MW of power and can provide approximately 80 MWh of energy storage capacity.
The lithium-ion batteries are to be located at the Gannawarra solar farm near Kerang, and in Warrenheip, Ballarat. Together, these projects will help ease constraints on transmission lines in Western Victoria that currently curtail the output of existing wind and solar farms and will also help to support future renewable generation.
ARENA CEO Ivor Frischknecht said that this announcement places Australia as a world-leader in battery storage, following grid-scale batteries in South Australia.
“ARENA is excited to be demonstrating the capabilities that these new batteries will provide in securing reliable electricity for western Victoria and to facilitate the Victoria’s transition to renewable energy,” Mr Frischknecht said.
“Battery storage will play a crucial role in the future energy mix, alongside other forms of storage and in conjunction with variable renewables and demand management,” he said.
In total, $25 million will be provided to a consortia led by Spotless Sustainability Services to build a 30 MW / 30 MWh large-scale, grid-connected battery located at the Ballarat terminal station. This battery is to supplied by Fluence and owned by AusNet.
This project will demonstrate how batteries can help provide grid stability and support on a congested transmission terminal, at a critical location, reducing the need to expand the substation. The battery will be capable of powering 20,000 homes for an hour.
The battery will help to increase the amount of energy supplied by surrounding wind and solar generation, at reduced cost.
A further $25 million will fund a second battery to be built at Gannawarra near Kerang, Victoria. This 25 MW / 50 MWh battery will co-located and integrated with the 60 MW Gannawarra Solar Farm.
This battery will be owned by Edify Energy and its partner Wirsol, and the battery will be supplied by Tesla.
This project will demonstrate how an existing solar farm can be retrofitted with battery storage.
Both batteries will be operated by EnergyAustralia under long-term offtake agreements.
Both Victorian batteries will help demonstrate how large-scale batteries can provide different benefits to the electricity system, including improving grid stability and power quality, and how they can help integrate more variable renewable energy into the grid.
Construction is due to commence this month, with both batteries to be commissioned in time for the summer peak.
Spotless CEO Dana Nelson said: “It’s an exciting time for Spotless and the utilities industry. Spotless is pleased to take a lead role to introduce renewable energy solutions. We’ve brought together leading utilities experience and proven energy storage technology to deliver this Victorian first.”
Edify Energy CEO John Cole said: “We are very proud to have designed and delivered the first combined utility scale solar and storage facility in Victoria. It is unprecedented in Australia at this scale and is among the largest in the world.
“The team has worked tirelessly to overcome many regulatory, technical and commercial challenges and create a very cool project – one that can deploy solar power at night. Without a doubt as the cost of battery storage falls, we see solar and storage becoming a ‘category killer’ in the energy sector and accelerating Australia’s transition to a clean energy future,” he said.
How we’re getting involved with Australia’s next big energy export: Hydrogen
Australia is a nation of abundant renewable energy resources and advantages. We are already taking advantage of that fact, with solar and wind farms popping up all around the country.
But what if we could create a new industry that helps take that to the world?
As Australia continues its shift towards renewable energy, storage has become just as big a priority as production. We’ve long used pumped hydro as a means to store energy and are now incorporating batteries into that equation. But what if there was another alternative, one that doesn’t need to be combusted, can be loaded up and transported where demand is, and could be used to create a whole new export industry for Australia?
ARENA is preparing for the first time to open up a funding round to drive research and development into exporting renewable hydrogen, and has allocated $20 million to do so.
Starting this December, ARENA will look to fund projects involving all stages of the energy supply chain from production, storage, transport and end-use.
“Hydrogen is set to play a larger role in the renewable energy space not only in Australia, but around the world,” ARENA Chief Executive Ivor Frischknecht said.
“The potential for hydrogen to be a carrier of renewable energy is limitless which is why ARENA will be funding projects from the production of hydrogen all the way to transporting and end use. The capability to supply renewable hydrogen at a competitive price is likely to lead to investment throughout the rest of the supply chain, including dedicated renewables for export.”
The funding round follows the recent request for information (RFI) which sought input from industry, research institutions and governments to assess how Australia might develop export capabilities based around renewable energy and hydrogen.
Recently the CSIRO announced it was investing $13.5 million in a program aimed to make Australia a hydrogen fuel leader.
Around the world, hydrogen is seen as having significant potential as an alternative to fossil fuels. This is why we’ve signalled the importance of exporting renewable energy by making the concept one of the agency’s four investment priorities.
The large number of responses from ARENA’s recent RFI ranged from organisations to individuals. But across all the responses received, one thing stood out; Australia is positioned perfectly to take advantage of and become leaders in the creation and export of hydrogen to the world.
ARENA’s support can provide a positive impact to Australian businesses, universities and organisations that are involved in the research and development of hydrogen.
ARENA is looking towards the long-term future, to an Australia that has developed its renewable energy production capacity to the point where domestic demand is met. We want to ensure that Australia is poised to capitalise on this scenario, by investing in the development of an end-to-end renewable energy supply chain, centering on hydrogen.
ARENA will be considering research and development project applications involving all stages of the energy supply chain, from using Australian renewables to produce hydrogen, all the way up to innovative technologies that can be deployed internationally to reconvert hydrogen back into green energy. Here’s a look at the key areas we’re interested in funding:
There are many ways of producing hydrogen from the more well-known method of electrolysis, to heat and chemical processes, to using sunlight and even biological processes. ARENA will be looking for innovative projects that use renewable energy to produce hydrogen, with the potential to lower costs in a future supply chain.
Despite hydrogen’s many useful qualities, it’s difficult to transport. As a gas it holds little energy for the volume that it takes up, requiring large containers, and the molecule itself is so small that it can pass through steel.
To make a viable export chain, any hydrogen produced in Australia will need to be converted into something that can be put onto a ship. Our researchers may hold the key to solving this problem, with many possible conversions to materials such as liquified hydrogen, other chemicals like ammonia, or adsorption onto novel materials such as nanostructures. If hydrogen is needed at the point of use, reconversion methods will also need to be developed.
Australia’s gas utilities currently have more than 88,000km of distribution pipelines installed throughout the country.
Renewable hydrogen has the potential to be injected into the the gas grid, essentially decarbonising the gas grid and acting as a storage option for the element. ARENA recently provided $5 million to Aquahydrex to fund their new class of electrolyser which will produce cheap hydrogen with a small percentage being placed into the gas grid.
Probably the most obvious use for hydrogen is as a fuel in hydrogen vehicles, but similar technology can also provide electricity in residential homes. ARENA will be looking at projects that provide innovative solutions to deriving energy from hydrogen gas, or even directly from the material that is transported without the need for reconversion.
WHEN CAN I APPLY?
Applications for the $20 million funding round will open on 20 December 2017 until 28 February 2018.
The report, released on Monday, is both bullish about the rise of renewable energy and optimistic about the role storage can play in making sure the transformation is orderly and controlled
It finds that even if renewables jumped to make up 50 per cent of our electricity mix by 2030, reliability of supply (making sure daily electricity needs are met) could be achieved without significant investment in energy storage.
But the pressing need to ensure security of the energy system (protection against system-wide failure such as blackouts) should drive an increase in storage, the report finds.
And with increased investment will come increased rewards, such as new export industries for the nation and lower prices for energy consumers.
“The challenge is to manage the transition from here to there. We are going to be moving to a new future, it’s happening around the world, it’s inevitable,” Dr Finkel said.
“What this report shows is that if storage is used effectively, we can manage that transition smoothly at the lowest possible price.”
The report goes into detail about a range of storage solutions that will likely be part of the future mix, ensuring that the baseload power that has dominated Australia’s past is slowly replaced by renewable sources of generation, supplemented by storage systems that can dispatch power at times of need.
“Over the past decade, Australia’s electricity market has experienced change on an unprecedented scale,” the report argues.
“Energy storage has the potential to upend the industry structures, both physical and economic, that have defined power markets for the last century.”
The actual mix of storage or other technologies used will depend on market dynamics, policy settings and consumer preferences, the report notes. It models three different versions of a possible 2030 energy market: a high renewable energy model (in which renewables make up 75 per cent of the electricity mix) as well as mid (50 per cent) and low (35 per cent) models.
HOW MUCH WILL IT COST?
Even assuming for the high renewables option, the costs, which appear large at first glance, are actually quite reasonable.
Meeting the storage needs for the high RE model would cost $43 billion if pumped hydro alone was used (which the report says is unlikely) or $22 billion for a batteries only solution.
But the report notes that the current cost of maintaining the NEM, extrapolated forward to 2030, would total $70 billion.
Many of the observations the report’s authors make align closely with ARENA’s priorities and the projects it has been funding. Here are a few areas where we are already helping to advance the nation’s storage capabilities.
The report finds that a combination of available lithium resources and current research capabilities means that “Australia has the potential to become a world leader” when it comes to battery storage.
This is unlikely to happen for existing forms of the technology, it finds, but could be the case for the next generation of batteries.
ARENA says: We are investing in several projects that aim to push the technology of battery storage forward. This includes working with CSIRO on potential applications for their ‘Ultra battery’.
“There are opportunities to use our solar energy resources to produce and export renewable hydrogen and ammonia,” the report says, “enabling growth of a new industry that may be suited to northern Australia.”
And when you ask Dr Finkel about what excites him about the report he is quick to bring up hydrogen.
“It’s looking at the opportunity to export sunshine, take sunshine, wind, renewable electricity, and use that through electrolysis to make hydrogen and from hydrogen you make ammonia,” he said.
“And ammonia is easy to ship and you can send it to countries that have indicated that they will have a not only growing, but a huge demand for hydrogen.”
The ACOLA report also sees potential for using renewable energy to create hydrogen and then pump it into the existing gas grid, where it mixes with LNG and can be safely used as fuel for household appliances such as heaters and stoves.
“Pumped hydro was found to be a low risk, low impact technology,” the report finds. “Despite the geographic limitations for pumped hydro, and the time (years) to implement new facilities, it is a technology that offers much potential for deployment in the grid.”
In short: We’re pretty excited about the potential of pumped hydro too.
The report urges the importance of examining the full cost of battery storage, taking into account the embodied energy and materials needed to construct batteries and arguing for investment in research that will improve the reusability of battery-making materials.
While Dr Finkel was at pains to point out that the ACOLA report does not “make recommendations” it does argue for further work to be carried out in several areas. ARENA is well situated to be a key driver in ensuring this work is undertaken.
“The optimum balance of generation, storage and interconnection, taking into account cost optimisation and the long term strategic opportunities for Australia.”
ARENA says: Our dispatchable renewables study, currently underway, is an important first step in examining some of these crucial questions. Which forms of storage are likely to offer greatest return on investment? Which are best suited to different conditions? How will multiple technologies interact, combine and behave? Stay tuned in coming months, we’ll have plenty to say about these questions.
“The role of ‘prosumers’ including their effects on the market, the system (equity and pricing concerns) and on their contribution to the energy transformation that is underway.”
A number of ARENA projects are also trialling ‘virtual power plant’ software that allows distributed energy resources such as rooftop solar to be aggregated and coordinated, enabling energy retailers and other energy market participants to get better at harnessing the power offered by prosumers.
The security of our electricity system relies upon its ability to transition from one balance of supply and demand to another, the report says. If supply and demand cannot be kept in balance, instability occurs. The challenge of maintaining that balance becomes more difficult as wind and solar are added to the system.
Batteries are a significant part of the answer here but other innovative forms of frequency control, such as the inverters of wind and solar farms also can play a part.
ARENA says: South Australia announced a 100MW Tesla battery would be built for this summer, as a key method for ensuring dispatchable power is on hand when required for system reliability. ARENA has also funded a large scale battery in the state: the $30 million, 30MW ESCRI battery, which will provide a range of valuable grid support services, including frequency control.
The cheap, abundant substance that could revolutionise how we store energy
Solar and wind power are vital to meeting our current and future energy needs but they don’t generate electricity 24/7. So to ensure our power system stays reliable as more renewables come online, we need energy storage.
And a good deal of that storage currently comes in the form of lithium-ion batteries – the same things that power your phone and laptop.
They also include the large batteries unveiled by Tesla on the nightly news as well as the batteries in your electric car and the ones hooked up to your rooftop solar system. Lithium-ion batteries are everywhere.
The problem with lithium is that it’s an extremely limited resource, making up less than 0.002% of the Earth’s crust. Lithium’s scarcity makes it expensive, and the price will probably go even higher as the global demand for storage keeps rising.
Enter sodium. One of the two elements in ordinary salt, sodium is as cheap as (salted) chips and has a near-unlimited supply. And thanks to a team of world-leading researchers from the University of Wollongong (UOW), inexpensive and reliable sodium-ion batteries are only a few years away.
HOW IT WORKS
Supported by $2.7 million of ARENA funding, the $10.6 million battery project will develop modular, expandable sodium-ion batteries optimised for renewable energy applications.
The researchers are currently working out the sodium-ion chemistry that is best suited to large-scale applications. They have partnered with leading Chinese manufacturers to develop the sodium-ion cells and make them into 5 kilowatt-hour (kWh) packs that can be stacked together to create any size battery.
“Sodium-ion batteries are a field receiving intense research interest,” says Professor Shi Xue Dou, who leads the project.
“However, much of the work has been on the lab-scale development of materials. This is one of the first projects to focus on scaling up the production of sodium-ion materials and establishing the production capacity to manufacture sodium-ion battery cells at a commercial scale.”
“We’ve had to develop a number of innovative approaches to address the issues that arise in scaling up this cutting-edge storage technology.”
The battery packs will get their first proper test at the Illawarra Flame House, an award-winning sustainable home on UOW’s Innovation Campus.
“We’ll be testing a single module in a residential-type application,” says Project Manager Jon Knott.
“The Flame House can be hired out, so it’s often full of people. That means we can get usage patterns and start to see how the battery charges and discharges, and what sort of degradation we can expect to see in real-world batteries.”
SOLAR, SODIUM AND SEWAGE
The big test will come in 2019, when project partner Sydney Water installs a 30 kWh sodium-ion battery at their sewage pumping station in Bondi. The battery will be charged by solar panels on the pumping station roof and controlled by a UOW-developed energy management system (EMS).
“The EMS is a set of software controls and algorithms that figure out the best way to use power,” Knott says. “If the solar panels are generating, should you use that power straight away, use it to charge the battery or sell it back to the grid?”
Pumping stations have fairly unpredictable energy requirements – the pumps turn on and off automatically depending on the level in the tanks. That means the EMS needs to be extremely intelligent to plan for the station’s upcoming power needs. It could even check the weather schedule.
“If the system can predict there’s going to be five sunny days in a row, we can perhaps empty the batteries a little bit more than we could if we knew it was going to be raining,” Knott says.
“Installing cheap sodium-ion storage is about more than just reducing Sydney Water’s electricity bill,” says Dr Heri Bustamante, Principal Scientist, Treatment at Sydney Water.
“It also increases resilience by integrating renewable energy technologies into our infrastructure and processes. If a pumping station loses power, it can’t pump, which leads to messy and environmentally disastrous sewage spills. Reliable energy storage can ensure the sewage network keeps operating, even during extreme weather or natural disasters.”
“Part of the reason why we’re in this is to see if we can run pumping stations off grid,” says Ruben Muller, Sydney Water’s Resource Management Advisor. “For example, we’ve got a pumping station in the Blue Mountains where there is a risk of losing grid supply during bushfires. We could run a second feeder to it from another direction, or we could just install solar and a battery, which I think is a much better solution.”
Does size matter?
So if sodium batteries can deliver comparable performance at a lower cost, do we even need lithium any more? According to Knott, both technologies most likely have a place in the future of energy storage.
“Sodium is a larger atom to start with, so sodium-ion batteries are always going to be larger than a lithium battery,” he says.
“Lithium is good for phones and electric vehicles where you want light, small batteries that have a lot of energy. But in a house or industrial application where you’ve got batteries hanging on the wall or sitting on the floor, it doesn’t matter if they are a little bit bigger or heavier. Sodium can be a sister technology.”
Relectrify giving electric vehicle batteries a second life
A Melbourne start up business Relectrify is set to launch its ground-breaking technology
which repurposes used batteries from electric vehicles (EV) for use as behind-the-meter
household energy storage.
Relectrify has developed advanced battery control technology that reduces the cost of
repurposing electric vehicle batteries, while boosting performance and lifetime. The
technology combines both power electronics hardware and battery optimisation
Once EV batteries reach the end of their life and can no provide the driving range and
acceleration required, up to 80 per cent of the storage capability remains.
With $750,000 in early stage equity investment from the Clean Energy Innovation Fund on
behalf of the Australian Government, Relectrify will expand production and commercial
trials on second life batteries, with the aim of becoming a global leader.
The Innovation Fund is a $200 million fund for innovative clean energy, renewable energy
and energy efficiency projects and businesses. The fund is an initiative of the Clean Energy
Finance Corporation (CEFC) in conjunction with Australian Renewable Energy Agency
(ARENA). The fund draws on the expertise of both agencies.
Relectrify was co-founded by Daniel Crowley and Valentin Muenzel in 2015, and the
company is an alumni of the Melbourne Accelerator at the University of Melbourne.
The Innovation Fund’s investment is part of Relectrify’s $1.5 million pre-Series A equity raising.
Relectrify CEO and Co-founder Valentin Muenzel said recycled batteries could be
repurposed widely, including for 12V batteries, household solar battery systems and
“Batteries are becoming a fundamental building block of the new energy industry and
seeing significant uptake across households, businesses and the power grid. And this is
just the beginning. There is an immense need for affordable and capable storage across
almost all parts of our lives now and in the future.
“When electric vehicles can no longer provide the driving range and acceleration required,
most batteries can still be charged and discharged a further 2000 times. The trouble was
large battery packs contain hundreds of individual cells, and if one isn’t working, the
whole system stops functioning.
“To fix this problem, Relectrify assembled a world-class team of engineers to develop our
own technology that would reduce the cost of repurposing the batteries, boost their
performance and increase their longevity,” he said.
ARENA CEO Ivor Frischknecht said Relectrify’s technology to recycle batteries would
reduce waste and make home storage more affordable.
“Relectrify is led by bright and passionate Melbourne-based founders who are looking to
bring an innovative idea to renewable energy storage solutions that can significantly lower
the cost of energy storage in a sustainable way.
“We’re excited to see how the technology develops and is adopted not only by Australian
consumers, but consumers around the world,” he said.
CEFC CEO Ian Learmonth said potential applications for Relectrify’s forward-thinking
technology can be adopted across the whole economy to have a significant impact on the
way Australians use energy.
“Although home batteries are only a tiny part of our energy storage today, industry experts
are saying they could be capable of storing around 15 gigawatt hours by 2035. That’s
enough stored electricity to power South Australia’s current summer peak demand for five
hours,” Mr Learmonth said.
“And while electric vehicles currently make up only around 0.2 per cent of vehicle sales in
Australia, by 2035 they are expected to represent just over one quarter. That translates to
an increasing supply of lithium ion batteries that are no longer useful in cars, but are still
incredibly capable for other applications.
“It’s important to rapidly develop technologies like Relectrify’s, to ensure we are well placed
to take advantage of high performance, reliable and cost-effective energy storage solutions
that assist in the transition of the energy system, as well as reduce the environmental
impact of used equipment through repurposing it.”
It’s relectrifying! How to use an electric car battery to power your home
A start-up launched by two Melbourne University students is set to make electric cars even greener, thanks to an innovative technology that allows batteries that are destined for the scrapheap to instead be reused.
More electric vehicles are hitting roads around the world each year and the motivation for many of their owners is to choose a form of transport that is environmentally sustainable.
But electric vehicles currently come with their own environmental challenges. What do you do with the batteries after they have reached their use-by date – which is usually within five to 10 years?
Currently, many of those batteries are sent to landfill. But when a battery has depleted to the point where it cannot continue powering your electric car it can still have as much as 80 per cent of its original charge.
Relectrify has developed a “plug and play” system that brings new life to old lithium-ion batteries, allowing them to be repurposed, storing energy for households with solar panels.
The company has received an investment of $750,000 from the Clean Energy Innovation Fund, a partnership between ARENA and the Clean Energy Finance Corporation. That investment means Relectrify can expand production and rollout for bringing its second-life battery technology to the market.
HOW IT WORKS
Relectrify’s advanced battery control algorithm increases the capability and lifetime of lithium-ion batteries, making them more affordable and sustainable.
“Every single battery pack has a collection of many individual batteries … in a normal battery pack those are limited by the weakest one,” says Relectrify Chief Executive and co-founder Valentin Muenzel.
“It is sort of like old Christmas tree lights, where when one of them fails the entire system turns off.”
Relectrify’s electronics manage the batteries individually, which means if any one of them starts to lose capacity it doesn’t limit all of the other batteries.
“We get the most out of every single battery that’s in the system,” Dr Muenzel says.
The electronic system could be plugged onto the old electric and hybrid car batteries, making them appropriate for other uses that do not require such high-performance batteries.
“We estimate these batteries, when they are no longer useful in the cars, still have about 2000 cycles left,” Dr Muenzel said.
“So if you reuse these in a solar home, charge and discharge them once a day … you would still get about six or seven years out of them.
“In motor homes, which you usually only use a number of months a year, the batteries will last far longer yet.”
“Batteries are becoming a fundamental building block of the new energy industry and seeing significant uptake across households, businesses and the power grid,” Dr Muenzel said.
“As a society we use batteries very broadly … and this is just the beginning. There is an immense need for affordable and capable storage across almost all parts of our lives now and in the future.”
A STARTUP READY TO GRADUATE
Relectrify had its start in the lecture halls of University of Melbourne, where Dr Muenzel arrived from Germany in 2012 to work on a PhD research in advance battery management. Towards the end of his PhD, he realised the tremendous impacts this technology could have and was joined by friend and fellow electro-mechanical engineer Daniel Crowley from UK to develop the technology as an independent company.
The two further honed their concept in the university’s Melbourne Accelerator Program which helps aspiring founders like Relectrify turn ideas into world-leading companies.
ARENA chief executive Ivor Frischknecht said Relectrify’s technology to recycle batteries would reduce waste and make home storage more affordable.
“Relectrify are led by bright and passionate Melbourne-based founders who are looking to bring an innovative idea to renewable energy storage solutions that can significantly lower the cost of energy storage in a sustainable way,” Mr Frischknecht said.
“We’re excited to see how the technology grows and is adopted not only by Australian consumers, but consumers around the world.”
AN IDEA WITH BIG POTENTIAL
Dr Muenzel said although Australia only had 4000 electric cars on the road, there was a global trend towards mass adoption with numbers doubling in the past 18 months to more than two million. He said their product was generating interest internationally.
However, he said, Australia was also a “fascinating market” for household battery storage because of the large uptake of solar panels.
“One in four households now have solar panels on the roof … (and) our electricity is very expensive,” Dr Muenzel said.
“If you can store extra solar energy from during the day in an affordable battery and use it in the evening, you are offsetting very expensive electricity, and suddenly energy storage makes strong economic sense for Australian households.”
ARENA to help fund 30 million dollar 30MW SA battery.
A new large-scale battery, designed to demonstrate how energy storage can strengthen the grid and potentially lower energy prices, will be built in South Australia with support from the Australian Renewable Energy Agency (ARENA).
The Minister for the Environment and Energy, the Hon Josh Frydenberg, today announced that the Agency would provide up to $12 million in funding toward a 30MW, 8MWh battery at the Dalrymple substation on the Yorke Peninsula.
ARENA CEO Ivor Frischknecht said the battery – the second phase of the Energy Storage for Commercial Renewable Integration (ESCRI) project – was expected to cost around $30 million.
ESCRI Phase 1 consisted of a study into the potential for energy storage to benefit the South Australian network. It has allowed key aspects of a utility scale battery, such as revenue generation, to be thoroughly planned ahead of today’s announcement.
Mr Frischknecht said the ESCRI battery would make an important contribution to security and reliability of supply in the context of high renewable energy generation in South Australia.
“This is also the first large-scale grid-connected battery to be designed, built and commercially operated in Australia largely with private investment from energy providers,” said Mr Frischknecht.
“It may not be the biggest battery in the world, but pound-for-pound it will pack a big punch in demonstrating how utility scale storage can contribute to a stronger South Australian energy network.”
Mr Frischknecht said the ESCRI project would demonstrate how utility scale battery storage could help contribute to a more secure, reliable and affordable electricity system.
He said specific benefits included:
– Supplying Fast Frequency Response (FFR), which helps balance the electricity network, particularly in the context of increased levels of renewable energy generation. This capability will also be used to help reduce operating constraints on the Heywood interconnector with Victoria which, in turn, has the potential to place downward pressure on wholesale energy prices in SA.
– Providing contingency power for the Dalrymple service area during a loss of supply. The islanded battery will work together with the existing 90MW Wattle Point wind farm and rooftop solar PV in a microgrid to provide backup local supply until connection to the grid is restored.
– Demonstrating that utility scale batteries can aggregate and “value stack” multiple revenue streams and deliver both regulated network services and competitive market services, thereby encouraging other energy developers to enter the market with battery projects.
Mr Frischknecht said ESCRI will be one of the largest batteries in the world, in terms of MW capacity, behind the Tesla/Neoen battery. It is expected it will be constructed and operational by February 2018.
“Battery storage is a key enabler as we transition to an energy system powered by variable renewable energy like wind and solar,” said Mr Frischknecht.
Mr Frischknecht said ESCRI would complement the 100MW State-funded battery to be built at Hornsdale by Tesla and Neoen, recently announced by the South Australian Government.
“Australia is now a leader in demonstrating the potential of large-scale battery technology to facilitate high levels of renewable energy penetration. This project will complement the Hornsdale battery and other ARENA-funded grid support projects to help deliver reliable and secure electricity in South Australia,” Mr Frischknecht said.
The project will be procured and maintained by transmission provider ElectraNet, which is in discussions with potential energy retail operators to provide market services. Consulting firm Advisian has supported the development of the project from its inception and will play a key role in delivering the knowledge sharing plan to maximise industry learning.
ElectraNet Chief Executive, Steve Masters, welcomed the Australian Government’s support of the project, through ARENA.
“We thank the Government and ARENA for their funding commitment to this important demonstration project on the Yorke Peninsula,” he said. “The learnings and expertise that we will gain from this project will greatly assist to support the shift in energy mix and landscape that South Australia is experiencing.”
South Australia will get a second large-scale battery, designed to boost security of the electricity grid and expected to help limit skyrocketing power bills, under a funding deal to establish Australia as a leader in the technology.
The $30 million, 30 MW battery will be built at the Dalrymple substation on the Yorke Peninsula, west of Adelaide. A partnership between the Australian Renewable Energy Agency and network provider ElectraNet, it is expected to be operating by late summer, when electricity demand typically peaks.
ARENA will contribute up to $12 million toward the cost of the battery.
South Australia no longer has any coal-fired power, and gets about 40 per cent of its electricity from wind farms. With expensive natural gas-fired plants responsible for much of the recent surge in power bills due to inflated export prices, attention has turned to new, cheaper ways to support variable generation.
Batteries are seen as a quick way to limit price rises as they increase capacity at peak times, when the cost of electricity surges, and take only months to build. Most power plants take years.
The Dalrymple battery will join the recently announced 129 MW Hornsdale battery – to be built by Tesla and Neoen and funded by the South Australian government – in accelerating the state’s shift away from reliance on fossil fuels to a model of renewable-energy-plus-backup.
ARENA chief executive Ivor Frischknecht said the Dalrymple battery would be one of the largest ever built, and the first in Australia backed by mostly private investment from the energy industry.
“It may not be the biggest battery in the world, but pound-for-pound it will pack a big punch in demonstrating how utility scale storage can contribute to a stronger South Australian energy network,” Mr Frischknecht said.
“Australia is now a leader in demonstrating the potential of large-scale battery technology to facilitate high levels of renewable energy penetration.”
The $12 million being provided by ARENA is a little more than a third of the total cost. With projections that the price of batteries could fall by 50 per cent within five years, the industry expectation is that this sort of development will soon be economically viable without government support.
While public debate focuses on the role batteries can play during a blackout, that is just one of the services they are expected to provide to help stabilise the system.
A STORAGE SWISS ARMY KNIFE
The Dalrymple battery does not simply provide one benefit; its strength lies with its ability to provide multiple important services that enhance grid security and place downward pressure on energy prices.
One of its main jobs will be to provide fast frequency response – to inject electricity into the system at short notice – to reduce pressure on the Heywood interconnector, which has limited capacity to import electricity from Victoria.
In the event of loss of supply, it will provide contingency power on the peninsula, effectively working as a micro-grid with the local Wattle Point wind farm and rooftop solar systems. It will be able to deliver the equivalent of 8 megawatt hours generation – enough to run about 400 homes for 24 hours when the wind is not blowing, longer when it is.
The battery will also be leased to a major energy retailer, which will use it to make revenue in two ways:
Buying electricity from the grid when it is cheap, storing it and selling it when it is most in demand.
Selling stabilising ancillary services – providing frequency, voltage and network loading – on markets run by the Australian Electricity Market Operator.
The funding for the new battery, announced by Environment and Energy Minister Josh Frydenberg during a visit to South Australia, follows a feasibility study into the future of large-scale storage in South Australia that pre-dates the state’s recent energy problems.
Dan Sturrock, senior consultant in ARENA’s transaction team, said the study found batteries were likely to be the best short-term solution and the Yorke Peninsula was a good site to deliver a commercial return.
“It’s not designed to solve South Australia’s energy problem in and of itself because there is no one silver bullet, but it’s designed to demonstrate what batteries can do and help others follow in those footsteps,” he said.
“In five years, there might be 500 megawatts of batteries operating in the state. That could solve significant problems and potentially remove the need for a new interconnector that would cost a billion dollars. This is a stepping stone.”
Dylan McConnell, an energy storage expert at the new, federally-funded Energy Transition Hub, based at the University of Melbourne, said those who criticised batteries on the grounds they would provide electricity for only a short period missed the point.
“It’s a strawman argument, really. The point is they can respond incredibly fast when needed – the amount of energy is less important,” he said. “They are not meant to provide electricity all the time. They provide fast response power when it is needed most.”
ElectraNet chief executive Steve Masters welcomed the announcement, describing it as an important demonstration project.
“The learnings and expertise that we will gain from this project will greatly assist to support the shift in energy mix and landscape that South Australia is experiencing,” he said.
Four charts that show the future of battery storage
Turn your head to the horizon on your next road trip through rural Australia and there’s a good chance you’ll see a line of white, bladed towers perched atop a ridgeline, or black rows of photovoltaic glass sitting silently in a paddock.
Wind and solar. These are technologies that have gone through the processes of development and then commercialisation. From promising but expensive prototypes they have transitioned to become mass-produced and readily-deployed systems.
And they are reaping rewards for the companies that operate them.
Now it’s time for batteries. The Australian Renewable Energy Agency is helping that same process of commercialisation take place for large-scale energy storage in Australia by providing funding for a big new South Australian battery. This project represents the leading edge of the commercialisation of storage globally, providing valuable information to an industry in which Australia is emerging as a world leader.
It’s an exciting development. So let us explain it to you using four charts (and one infographic).
One of the first lithium batteries, which used titanium sulfide, stank of rotten eggs. Titanium disulfide reacts with air to form hydrogen sulfide, which means this energy storage technology emitted a truly significant funk. It was also prohibitively expensive, and so, its development was discontinued.
But in the past two decades, lithium batteries – specifically, lithium-ion batteries that feature in portable electronics – have fallen rapidly in cost, dropping from ~3,000 $USD/KWh to ~$400USD/KWh in 2015. Through mass production and innovation, these small batteries have become commercially viable.
Small-scale lithium-ion batteries are a brilliant illustration of the mechanics of commercialisation. As mass production has ramped up, prices have dropped.
That process is now taking place with larger scale batteries too. Energy Networks Australia quotes the Australian Energy Market Operator, which finds large-scale lithium ion batteries are increasingly competitive (albeit at the higher end) with other energy balancing and storage technologies:
Tesla’s Elon Musk has predicted that lithium-ion battery costs will plummet to US$100/KWh by the end of the decade. Though such batteries are already becoming increasingly competitive with other forms of storage, commercialisation must be tested with real-world data and performance assessment. ARENA’s funding will be vital in efforts to poke and prod at the realities of mass deployment of grid-scale energy storage.
WHAT IS THE ESCRI BATTERY?
The Australian Renewable Energy Agency (ARENA) this week announced $12m of funding for a 30 MW/ 8 MWh lithium-ion battery in South Australia – part of the Energy Storage for Commercial Renewable Integration (ESCRI) project.
The project blends the prospects of commercialisation with renewable energy integration. The first phase of the ESCRI project involved the creation of a detailed report investigating whether a big battery makes commercial sense. That report argued: “it is envisaged that advancements in technology will result in a declining technology forward curve and improvements in economic viability in the future.”
As the above chart shows, the key time is now: 2017 is the point at which the net present value (NPV) tips into the positive upper half of the chart. It is the point where a real business case begins to emerge for the commercial operation of grid batteries.
While the ESCRI battery still requires ARENA funding of close to 40 per cent of its total cost, it is expected that proceeding with the project will speed up the path to commercial viability, a point at which future projects can proceed without financial support from government.
WHY SOUTH AUSTRALIA?
The Festival State is perfectly suited for testing the usefulness of large-scale lithium-ion energy storage technologies.
The ESCRI battery will be built at the Dalrymple Substation, and it’s going to be built and operated by the local transmission network service provider, Electranet, and leased to an energy retailer.
The battery will provide balancing services to the grid – rapid injections of supply and demand, and an ability to correct fluctuations in frequency through the ancillary services market.
Dalrymple is also right next to the Wattle Point Wind farm, allowing for close examination of the interaction between this big battery and a nearby renewable energy facility. These are important pieces of the grid security puzzle in SA’s rapidly changing system.
Renewable energy’s rapid growth in South Australia has presented some challenges to the operation of the grid, which can be eased through the use of storage – as the phase-1 ESCRI report states, “The future of more renewable energy generation in South Australia is tied in part to the introduction into that market of energy storage”.
The commercialisation of large-scale energy storage has flow-on effects for new forms of renewable energy generation in South Australia.
This is in addition to its value for grid stabilisation, customer load shifting, ramp rate control and distribution services. The ESCRI battery has been compared to a Swiss Army Knife, it is designed to do a lot of things. And all of those things are needed in South Australia.
It really seems there’s no better place to poke and prod at the possibilities for the commercialisation of big batteries.
AUSTRALIA’S ROLE IN THE GLOBAL SHIFT
The ESCRI phase-1 report illustrates the recent history of global energy storage (via the US Department of Energy) – which began as ‘mechanical’ (big spinning fly-wheels), shifted to ‘thermal’ (e.g. SA’s recent solar thermal plant), and has, since 2012, begun shifting to ‘electro-chemical’ (lithium-ion). Cumulative capacity of electro-chemical storage around the world is set to hit 1.1 gigawatts in 2017 (up from 0.2 in 2010):
Alongside this growth, “Battery costs have declined 40 percent since 2014”, according to Bloomberg, (who also forecast a rapid rise in installations around the world). Mass production will shift the ‘learning curve’ for energy storage – Tesla’s gigafactory will be the first of many plants pumping out bigger batteries.
The leading edge of shifts in storage has been focused on South Australia. The recent announcement of a Tesla battery highlighted the scale of Australian investment, with the company claiming the new project was three times bigger than the current biggest battery system in the world.
ARENA’s new battery is the second biggest, further evidence of the world-leading role Australia is playing in the growth and commercialisation of battery storage.
Projects of this scale are vital in stress-testing whether energy storage can serve a commercial purpose in Australia’s grid (the third-biggest battery in the world will be situated in Los Angeles, and will produce 20 MW).
South Australia won’t necessarily hold these records for long. Like the small battery in the device that you’re probably reading this on, large-scale lithium-ion batteries are very likely to grow into ubiquity, as they provide grid stabilisation services and enable further integration of renewable energy.
If and when that happens, Australia and ARENA will have played a significant role in that process. Commercialisation is a vital component of rapid changes in technology, and ARENA’s involvement is helping to stress-test the leading edge of what will likely be a major addition to Australia’s energy system.
Bottomless battery: How hydrogen from renewables could soon boil your kettle
Hydrogen. The most abundant element in the universe. It’s what powers rocket ships, keeps the sun shining and is central to nuclear fusion.
It drives fuel cell vehicles, helps to refine our transport fuels and is now rapidly emerging as a powerful tool in meeting the contemporary challenges of an increasing penetration of intermittent renewable energy sources in the nation’s electricity mix.
Hydrogen is what is described as an ‘energy carrier’. This means that once isolated it has serious chemical potential. It can either be used as high energy fuel in its own right or act as an ‘intermediary’ molecule that can essentially transfer energy to other fuels of various types.
HOW IT WORKS
On an industrial scale, hydrogen has been produced for a variety of uses for well over a century. The most established, largest and cheapest pathway to its delivery is currently through what is known as ‘steam reformation of methane’ or simply ‘SMR’ – a process by which natural gas is cracked with water to produce hydrogen, while releasing carbon monoxide.
Electrolysis, whereby electricity is used to split water into hydrogen and oxygen, is another well established platform that is able to generate a very high purity of hydrogen.
Many people think that hydrogen’s ability to store or carry energy offers an obvious solution to some of the challenges of building a carbon-free energy system.
In the middle of the night, when wind farms, for instance, are going flat out but most of us are tucked up in bed and energy demand is relatively low, an excess of non-synchronous renewable energy causes problems both for the market (causing a low and sometimes negative power price) and the grid itself (frequency fluctuations). This may lead the Australian Energy Market Operator (AEMO) to take remedial action to curb generation, which is essentially asking wind farms to shut down or switch off temporarily – what is referred to as ‘curtailment’.
Electrolysers could help avoid the need for curtailment at such times by acting as a ‘sponge’ that can soak up the excess supply by converting cheap renewables into energy dense hydrogen gas.
BUT WHERE TO STORE IT?
The Energy Networks Association (ENA) sees this as a major opportunity for Australia’s gas utilities, who currently have more than 88,000km of distribution pipelines installed throughout the country.
Once injected into the gas grid, renewable hydrogen has the effect of decarbonising the gas grid with ‘green gas’ and ‘time-shifting’ renewable energy for storage and/or use at a later time.
The volumetric capacity of the national gas infrastructure is equivalent to many days worth of energy storage and is able to use a vast transportation network that is already in place. It is a ‘bottomless battery’, of sorts, and one that could complement the other storage options we now have at our disposal, including household and utility-scale batteries and pumped storage hydro systems (each of which has a role to play and is suited to specific operational and commercial contexts).
The ‘power-to-gas’ (P2G) value chain is surely worthy of serious investigation as the benefits could be huge. Beyond the advantages in terms of grid stability and stabilising supply, the changing economics of electrolysis and renewable energy mean that we may not be too far away from also having dedicated, stand alone hydrogen farms that pair renewable energy with electrolysers, to shift energy to times and/or places of higher demand.
It’s an idea that is not as radical as it sounds. Way back in 1841 at the dawn of the Australian energy industry, the Australian Gas Light Company (now AGL) first began piping gas in Sydney to run street lighting. This gas supply was referred to as ‘town gas’, an unrefined coal gasification product consisting of a high proportion of varying ratios of hydrogen (<50%), carbon monoxide and methane, all blended together (along with a random assortment of other impurities).
In many parts of the world, this was the type of gas used until dedicated refining into methane became prevalent in the latter half of the twentieth century, to ensure consistency and quality of supply.
That means hydrogen has been a cornerstone of our gas supply longer than many of us are able to remember. A reversion to a somewhat more stable and predictable mix of methane and hydrogen in a modern gas network through P2G is not something that is especially difficult to engineer, envisage or regulate. It’s also history repeating to an extent, only with improvements, so it is nothing that should cause alarm or concern.
As per the recommendations of the Finkel Review, installation of renewable energy generators is best balanced out by some form of storage. Power to gas is now being trialled in Australia for the first time (as part of the ARENA-funded AquaHydrex trial) to help smooth out the peaks and troughs, while beginning to green our gas pipelines.
With renewable energy dropping in price and increasing in volume, along with electrolyser technology that is now increasing in scale, efficiency and sophistication, we can expect to see more investigation of this solution as a tool to help us manage our transition to a renewable energy future.
Scott Grierson is a member of ARENA’s Business Development team. These are his views and not necessarily those of ARENA.