Targeted reform of Australia’s outdated electricity market – rather than long-term public funding – is the key to unlocking the full benefits from energy storage technology as the country shifts to renewable energy, according to a policy paper released by the Clean Energy Council.
CEC chief executive Kane Thornton said energy storage technologies have a critical role to play in the development of an affordable, clean and secure energy system.
“There remains substantial work to do in modernising Australia’s energy rules and allowing energy storage to fully participate in the market, bringing the benefits of the technology to both the grid and consumers more broadly,” Thornton said.
Much higher levels of storage will smooth the way for large-scale wind and solar projects, where generation is variable during the day or in the case of solar non-existent at night.
“Australia currently lacks a strategic package of energy market reforms that will help to turbo-charge energy storage and tear down the barriers that stand in the way to its wider use around the country.”
The paper, which can be found at the CEC’s website, lists 13 recommendations for reforms it considers will speed up introduction of energy storage, including:
- The energy market adopt a five-minute settlement regime to provide a more effective market signal;
- Distributors make it easier to gain approval for grid-connected battery retrofits;
- Governments allow premium feed-in tariffs to be traded in exchange for a subsidy for a battery.
- Introduction of a legally enforceable Australian Standard for product safety of lithium ion batteries.
Energy storage isn’t only about batteries; it can include hydrogen fuels and pumped hydro.
“Energy storage is the last major puzzle piece of an evolved energy system. It can complement more variable sources of generation, like wind and solar power, while also providing services that bolster the resilience of the system,” Thornton said. “It also lightens the load during peak demand, reducing the need for expensive network investment and augmentation.”
Energy storage costs – especially battery storage – are falling, the CEC says, and the briefing paper includes a chart from Nature showing the levelised cost of electricity reduction of lithium ion batteries over 10 years to 2015.
