The panel, above from left:
- Darren Gladman (moderator), director of smart energy, Clean Energy Council
- Mark Higgins, chief operating officer, Strategen
- Amy Kean, director energy infrastructure and emerging technologies, NSW Department of Planning and Environment
- Ian Kay, chief financial officer, Australian Renewable Energy Agency
Renewables is a fast-moving sector, filled with new ideas every day, but Clean Energy Council director of smart energy Darren Gladman said the mature nature of solar and wind means serious attention is now being paid to any technology that can level out their lumpy generation profiles. “Over the last few years a lot of the conversations have been about energy storage,” he said. With CEC membership including about 6,000 accredited solar installers, that’s probably no exaggeration.
The Australian Renewable Energy Agency is always on the lookout for storage solutions that look good on paper but might be a bit too racy for conservative investors. By supporting new technology “and getting it out of the lab”, said CFO Ian Kay, grant funding can ease the course towards commercialisation – a couple of recent examples being compressed-air technology and on-grid large-scale battery projects where costs are too high and revenues too low for commercial consideration. “ARENA’s role in life is to introduce more renewable energy at an ever-decreasing cost … and we see storage as a really important enabler of that,” Kay said.
Storage is needed most where penetration of renewables is highest, such as in South Australia and Queensland, where rooftop solar is so popular. “We’re trying to front-run all of this, to foresee what is going to be required in that [two-five-year period ahead] in relation to pumped hydro, [and] get it installed now,” he said. As for the grid services storage can perform, that can be revealed by the market once the technology is up and working.
“ARENA is open for business to help you install the storage projects or indeed develop the storage technology the market will need,” he said.
Stick and carrot
Storage will play an enormous role as the energy mix is turned on its head, said Amy Kean from the NSW Department of Planning and Environment. “We’ve got 70% of our coal fleet coming offline by 2035 [and] the cheapest form of energy is renewables – so that needs to be firmed up with storage,” she said, “and we need it en masse.”
Accelerated take-up of solar in NSW and across the country needs so be complemented with storage. State and federal governments have to get their heads around “complexities” of the planning and regulatory processes to plan for storage, kick-start the sector and “bring the price down the cost curve … as quickly as possible”.
Start with a plan
Two key elements are necessary to make this an orderly energy transition, said Mark Higgins of Strategen: a roadmap to inform future decisions, such as the CSIRO’s Network Transformation report and the Finkel Review, and, secondly, some targets. “In order to have a road map that tells you something, you need to know where you’re going,” Higgins said.
In the United States, where Higgins is based, nine states have announced full decarbonisation goals, and the UK has announced net-zero emissions by 2050. “That, to me, is crucial. If we want to meet our Paris agreement requirements we have to start setting targets that help set where we are going,” he said. “In California, once we put in place a 100% clean energy target, that conversation rapidly shifted from ‘let’s do some short-duration storage to help provide system flexibility’ to, all of a sudden, ‘we need long-duration storage; we need to have a conversation about hydrogen’. Other technologies become part of the conversation when you know where you’re heading because you know what issues you need to address.”
Paint a target
Australia has a jigsaw puzzle of clean energy targets and incentives on offer, said the CEC’s Gladman, at state and federal level. But what form should a storage target take, when the energy solution can be applied from residential-scale all the way up to a monstrous Snowy 2.0? Higgins said California’s 2014 energy storage target sets out procurement levels for utilities, provided solutions are cost-effective.
“It essentially forced the planners to start figuring out how storage was integrating with the system … and they started to realise how valuable it could be,” he said. As the penny dropped, the mindset of the grid operators, generators and utilities changed from “lowest cost” to “highest net value”. A similar shift in thinking is overdue in Australia.
The integration of storage will deliver a more flexible grid. Optimal outcomes will be found by accepting system decarbonisation as the ultimate objective and modelling solutions using a range of types of storage. “You need it as a bulk system – and Snowy Hydro can provide that – but you need distributed storage as well to address the fact Australia’s grid is going to be the most decentralised in the world,” he said. “It’s not an either-or proposition; it needs to be informed by the model.”
It will take some patience to address regulatory guidelines, Kean said. “At the moment we can’t even decide is storage a load or a generator. We don’t have a definition for it in our energy market rules – we are about to be Uber-ed.” The rules have be clear to allow storage into the market, she said, so it can provide the services we want.
The public is slowly waking up to storage, but it will take a while yet before they understand that hydrogen and concentrated solar count as solutions as surely as a pumped hydro project or lithium-ion battery. “There are so many different mediums that have got different durations of storage,” said Kay, and all manner of solutions will be required to provide services including frequency response, energy arbitrage, fast frequency response and inertia. “There aren’t even markets for some of those [services] at the moment.”
Indeed, Kay accepts the industry is yet to “fully figure out” all that storage will be able to deliver to the grid and owners of assets.
Walking through treacle
Storage is important and we need it now, but tell that to the powers that be. The rule-makers in Australia operate at a glacial pace, said Gladman, who expressed frustration with the Standards process, the AEMC policy process, COAG Energy Council’s tortured reliance on state and federal politics. “The wheels turn slowly,” Gladman said. “Everything is like walking through treacle.”
All the while, the coal fleet stumbles towards its timely demise. “Liddell shuts in 2022. I’m not sure if we have enough storage in place, but if we don’t we kind of need to have those policies in place now – 2022 is not far away,” he said.
Don’t lose hope, said Kean, pointing to her team’s search all over NSW for hydro storage solutions other than Snowy. Water NSW has short-listed 24 proponents to assess opportunities totalling 7,000MW of storage, she said, some pumped, some not.
The rules do make it hard, she agreed. “Businesses in many cases have been more innovative than our energy rules spell out.” But change has to happen. Nothing will stop it.