It’s been hailed by many as the ‘Leatherman’ of the smart energy industry. Storage which can be used for peak demand management at utility level, or commercial and residential prosumers looking to operate more sustainably or go off-grid.
Australia has taken a leading role globally in the transition to smart, renewable energy, and given the abundance of sunshine, solar has seen near-record adoption, with over 1.8 million residential houses incorporating rooftop solar, representing approximately 36% of the country’s 8.2 million households.
The utility and commercial-level adoption of solar and storage has also been impressive, with the latest September 2018 report from Australia’s Smart Energy Council (SEC) noting over 52,500 on-grid and off-grid energy storage systems installed in Australia at the end of 2016, and 20,000 energy storage systems planned for completion in 2017.
As at the end of 2018, 55 large-scale energy storage projects were identified, representing over 4GWh of storage. Of these, 19 had been completed, with another 36 at a financial close.
A high-growth forecast by the Australian Smart Energy Council (SEC) sees this number eclipsed – forecasting 450,000 energy storage systems in place by 2020, and this growth extending to employment. At present, according to the report, around 2,000 people are employed in the energy storage sector, with over 35,000 Australians predicted to work in the industry by 2020.
These are all positive numbers, but one finding by the SEC reveals the actual state-of-readiness in the region.
“The lack of accurate and complete data on the location, number, size and type of energy storage systems in Australia demonstrates the urgent need for an industry-led national energy storage systems database.”
The SEC wasn’t alone in that assessment. The country’s ‘peak national body’ representing transmission and distribution organisations,
Energy Networks Australia (ENA), called for clearer guidelines and a more consistent approach to grid connections of solar PV and battery storage in the country. This led to ENA’s issuance of the ‘Distributed Energy Resources (DER) Grid Connection Guidelines Framework and Principles’, in an effort to standardise renewables installation on the grid.
ENA CEO Andrew Dillon said that as Australia adopts a more decentralised energy mix, consistency would be a key factor, noting that energy networks have, given the increased uptake of solar and other renewables, developed their own technical requirements and connection processes.
Dillon said: “This has led to inconsistencies between networks, which has been identified as a major concern by stakeholders in numerous industry reports including the CSIRO/Energy Network Australia Electricity Network Transformation Roadmap. These guidelines are being developed to establish uniformity around voltage, legal frameworks and technical standards to enable fair, easy and efficient grid connection.”
The CSIRO roadmap forecasts that savings from battery-based storage could save the country as much as AU$101 billion by 2050 and completely eliminate greenhouse gas emissions.
The framework is expected to be published in late-2019.
State-driven adoption is key to growth
Australia’s renewable energy target aspires to reach 33,000 gigawatt-hours (GWh) of renewable energy in use by 2020. According to the SEC, state government policies and programmes are critically important to driving investment in energy storage. To date, the Australian Central Territories (ACT) of Victoria, Queensland and South Australia have been the leaders in the journey to storage.
• Australian Capital Territory (ACT) has been the most aggressive adopter to date, targeting a 100% transition to renewables by 2020. ACT has also taken the most aggressive stance in terms of energy storage funding, with a $25 million Next Generation Battery Storage scheme aiming to provide subsidised battery storage for 5,000 Canberra homes and businesses by 2020.
• New South Wales is making steps in the right direction, but at present no state policy exists to ensure that the region reaches its goal of aligning to Australia’s Renewable Energy Target (RET) to ensure that at least 33,000 gigawatt-hours (GWh) of Australia’s electricity comes from renewable sources by 2020.
• Victoria was the first region in the country to adopt smart metering, and is looking to stay ahead of the curve thanks to the construction of two large-scale battery storage plants: namely the Tesla 25 MW/50 MWh battery integrated with Edify Energy’s Gannawarra Solar Farm; and Fluence’s 30 MW/30 MWh system at Ballarat. The projects have received support from Australia’s Renewable Energy Agency (ARENA) through a $25m grant from ARENA and a further $25m grant from the Victorian Government, and the state has set a goal of 20% renewables by 2020, and 40% by 2025.
• Queensland has offered no-interest loans and rebates to drive uptake of batterystorage technology and have commenced a 100MW reverse auction for energy storage as part of a 400MW renewables auction. Residential customers are also offered an AU$50 incentive for registering with the state’s database of distributed energy resources.
• South Australia has brought a 100MW/129MWh lithium-ion battery online and has proposed an AU$100 million programme to facilitate battery-storage in 40,000 homes. The state also has an AU$150 million Renewable Technology Fund, which has targeted renewable energy projects in the region.
• Tasmania is currently undertaking a feasibility study into pumped hydro storage, called the “Battery of the Nation, as well as a proposed AU$200,000 microgrid pilot project. States such as Western Australia, the Northern Territory and even New South Wales’ lack of formal policy for solar and storage are likely to leave them behind in terms of progress to renewables.
Challenges to meet
Australia currently has no formal policy or national standards in place to regulate storage adoption in the country. A draft standard was released by Standards Australia – ASNZS 5139 – but a significant number of industry and public submissions have gummed up any further progress.
There are encouraging signs however. Australia’s Chief Scientist Dr Alan Finkel stated in a June 2018 report to national government, that the “financial equation is straightforward” for adding batteries to home solar systems and has said that it already makes financial sense for home PV system owners to combine them with energy storage systems.
As at 2017, noted Finkel, solar feed-in to the grid earned the average homeowner approximately AU$0.08 per kWh, while retail prices are around AU$0.30 per kWh. Storing the electricity generated and consuming it onsite instead therefore represents potentially major savings.
The Finkel Review (Independent Review into the Future Security of the National Electricity Market, June 2017) made a significant contribution to the development of energy policy in Australia, and all the recommendations made, with the exception of a Clean Energy Target, have been accepted by the Australian Government.
Some argue that the 2017 report underestimated the role small-scale storage will play by 2020, but it states: “Battery storage is poised to be the next major consumer-driven deployment of energy technology. Upfront costs for solar photovoltaic systems with storage are currently high, with long payback periods for most consumers. Bloomberg expects the average payback period for residential consumers to fall below 10 years in the early 2020s, with around 100,000 battery storage systems to support rooftop solar photovoltaic generation predicted to be installed by 2020.”
In relation to large-scale energy storage, the Finkel Review’s recommendation to require some new generators to have energy storage could significantly increase the number of large-scale energy storage projects up to and beyond 2020, although it may also drive up the cost of large-scale renewable energy projects, making them less viable.
Finkel has recommended better market designs to incentivise peak shifting of solar and other forms of generation, which could be easily achieved with battery energy storage.
The Australian Minister for Energy and the Environment, Josh Frydenberg, has hailed the success of the storage market claiming that Australia is a world leader for installed capacity of batteries, when grid-scale projects such as Tesla-Neoen’s 129MWh Hornsdale battery project in South Australia and other federally-funded projects are taken into account.
“We are now not only the world leader in the use of rooftop solar, but also the world leader in the installation of residential battery storage by power capacity. As more renewable energy – mainly in the form of solar and wind power – enters our electricity grid, the need for energy storage solutions grows,” Frydenberg said.
Standardisation aims at installers and inspiring consumer confidence
Germany is still considered by many to be the leader in annual sales of storage systems,as confirmed by a report from Delta-ee and the European Association of Storage of Energy (EASE), which found that as many as 37,000 home systems were installed in the country in 2017.
Both Australia and Germany are clearly the fastest movers in the market, one driven by wind, the other by abundant sunshine, but consumer confidence will be key to driving growth according to both SEPA and Finkel.
The Australian Council of Learned Academies (ACOLA), which has worked with Finkel on his more recent reports, said back in November 2017 that “consumer confidence” is needed to capture the country’s big opportunity to use energy storage effectively and develop a sustainable industry.
Expert advisory and certification body DNV GL said it has been contracted to lead the creation of a new standard, the Australian Battery Performance Standard, intended to make residential and commercial consumers more comfortable with battery storage technology and help consumers make informed, empowered decision.