Australia has decided to get serious about energy storage. For the first time, dispatchable energy storage has been listed as ‘high priority’ by the nation’s independent infrastructure adviser Infrastructure Australia...
- Energy storage now a designated national ‘priority’
- Covid-19 has led to a rise in demand for storage
- A total of 6-19 GW of new storage needed by 2040
- World’s biggest battery set to be built in the country
Australia has decided to get serious about energy storage.
For the first time, dispatchable energy storage has been listed as ‘high priority’ by the nation’s independent infrastructure adviser Infrastructure Australia.
By adding energy storage to the 2021 ‘priority list’, Infrastructure Australia sends a signal to government that this type of renewable energy should be among the investments prioritised in the short, medium and long-term.
Being added to the priority list increases the chances of government-sponsored energy storage projects beginning construction. Already this year, ten projects on the priority list – which also includes transport, water, waste, telecoms and social infrastructure schemes – have moved into construction.
Infrastructure Australia said projects “remain on the priority list until delivery or constructions begins”.
Storage case bolstered by pandemic
The Covid-19 pandemic has advanced the case of energy storage in Australia.
“Covid-19 has had a significant impact on the way Australians use critical infrastructure,” Infrastructure Australia said in a statement.
“We have seen changing work patterns, a pause on Net Overseas Migration, and a 200% increase in people moving from capital areas to regional areas – these changes present a range of new challenges and the Priority List looks to identify infrastructure investments that will meet the diverse needs of our communities in this new environment."
Infrastructure Australia emphasises that the country’s National Electricity Market (NEM) will require “significant investments in dispatchable energy storage” to support growing renewable energy generation and the future retirement of coal-fired generators.
The body also issues a warning regarding the consequences of not making energy storage investments. It says that without sufficient dispatchable capacity, there is “a risk of power outages and load shedding in the NEM”.
Setting the target
How much new energy storage capacity does Australia need?
In the Australian Energy Market Operator’s (AEMO) 2020 Integrated System Plan, it was forecast that 6–19GW of new dispatchable storage will be required by 2040. “This is to firm up distributed energy sources and utility-scale variable renewable energy, such as solar farms,” AEMO said.
There are already signs that the Australian energy storage market is evolving in order to meet this increased demand.
The nation’s big battery market has, up to now, been dominated by lithium-ion batteries, but times are changing.
At the end of last year, it was announced that Australia’s first utility-scale flow battery will be built in South Australia. The Yadlamalka Energy project – near Neuroodla, approximately 430km north of Adelaide – will consist of a battery with 2 MW / 8 MWh of capacity that is connected to the NEM. The system will be charged by a 6 MW solar array that will be installed on site.
However, expect lithium-ion batteries to remain a popular option, with investors attracted to these projects by falling costs. Bloomberg NEF’s annual battery price survey revealed that lithium-ion battery pack prices were likely to fall from the 2020 level of US$137/kWh to US$100/kWh by 2023.
Australia certainly has the potential to be a global standard-bearer for energy storage innovation.
Last month, it was revealed that CEP Energy plans to build the world’s biggest large-scale battery in New South Wales Hunter Valley. This A$2.4bn battery at Kurri Kurri, northwest of Newcastle, would have a power capacity of up to 1.2GW, around eight times greater than the Hornsdale battery in South Australia, which was the biggest globally when it began operating in 2017.
It should also be pointed out that the nation’s energy storage sector has the potential to produce significant energy for export.
In January, renewable energy company Sun Cable signed a deal to develop the Australia-ASEAN Power Link project (AAPL), which is designed to generate, store and transmit electricity overseas. The AAPL includes a 4,500km high voltage direct current transmission system connecting a 10GW solar / 30GWh storage facility near Darwin with Singapore. Sun Cable predicts the A$22bn project will be able to export A$2bn of solar energy annually to Singapore.
When it comes to energy storage, investors will watch Australia with interest.