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Large-Scale Battery Storage Knowledge Sharing Report, Australia

Large-scale energy storage systems have the potential to help mitigate a range of challenges that arise in the transition to an increasing penetration of variable renewable energy (VRE). However, large-scale battery storage (LSBS) is an emerging industry in Australia and as with any transition to new technology, there is a range of challenges and opportunities for market participants to understand, explore and resolve. As trailblazing LSBS projects are commissioned in Australia, it’s important to draw learnings and data from them that will benefit the business cases for future projects.

Aurecon was contracted by the Australian Renewable Energy Agency (ARENA) to gather insights and data from Australia’s early LSBS projects and combine it with its global energy storage experience to identify the opportunities and risks for future LSBS projects in Australia. ARENA provides funding and research support for projects involving battery storage and will share its knowledge and data to help the renewable energy industry.

Planning for a sustainable energy future

In response to several events across Australian states, such as state-wide blackouts and load-shedding incidents, governments have begun to plan large-scale energy storage systems, such as the Hornsdale Power Reserve; a project that Aurecon developed the technical and functional requirements for.

Due to the emerging nature of the market, LSBS developers are identifying a variety of unique and complex challenges through the execution of each project. These are typically a function of the project scope and market services for each battery energy storage system.

Aurecon’s key findings

Aurecon’s study considered the technical, commercial and regulatory environment for Australia’s LSBS market to grow in both confidence and capability. Through its research and global expertise, the following key findings were identified.

Technical capabilities of the LSBS market and projects

Parameters that guarantee the performance of a battery include reliability, power and energy capacities, power consumption and efficiency, appropriate warranty structures and risk profiles. Of paramount importance is also a well-developed operating strategy to meet the needs of customers and extract maximum value from the battery to enable a robust business case.

There is a need for:

  • further development and deeper understanding of the inertia and system strength support capabilities of batteries
  • better modelling of the capability of inverter-based generation and storage to support system security and stability in high VRE networks
  • innovation in sophisticated bidding algorithms and tools to enable optimal battery participation in complex energy markets
  • development of flexible warranty structures to provide battery owners and operators with the tools needed to make optimal operational decisions

Investment in, and the development of, LSBS projects

Strong collaborations between developers, Australian Energy Market Operator (AEMO), network service providers and other stakeholders will be a key contributor to the success of LSBS projects in Australia. Collaboration will provide the platform for new technologies to contribute effectively to Australia’s future power systems and energy networks.

Aurecon’s study found that current technology is ahead of existing regulations and markets to appropriately value the benefits offered by LSBS projects. Commercial, regulatory and policy changes that would support the emerging LSBS market include:

  • State governments having policy clarity and a clear strategic plan for LSBS projects to prioritise support and approvals for those delivering maximum value
  • Simplification of contracting strategies: in consideration of the complex contracting arrangements that have affected project timelines for some LSBS projects
  • Ensure transparency to facilitate efficient investment in areas of the network that most need it, or in asset sharing frameworks
  • Market reform to value additional services that will be needed in the transition to a high VRE power system
  • Reform to simplify the registration of storage and hybrid projects while enabling maximum operational flexibility

The capabilities of the future LSBS market

It is evident that Australia’s power system and network is changing. There is growth from wind and both utility and rooftop solar photovoltaics (PV). This change is likely to bring about a host of changes in how the power system is managed, including new resource adequacy, VRE firming, frequency and inertia management, system strength enhancement and system restoration capabilities. Across this suite of capabilities, battery storage is a technology that is likely to contribute to many of these system change requirements.

With more LSBS projects in the pipeline, there are studies and investigations by the AEMO into emerging generation technologies, contributing to forward market and design programmes. Learning from international experience in regulatory reform and LSBS integration can help to build more robust and future-ready energy markets, though knowledge of the Australian market remains critical.

Unlike many other forms of energy storage and generation, batteries are particularly valuable in the flexibility they provide. They can respond faster than other energy storage or generation technologies, dispatching precisely as required within fractions of a second to help maintain grid stability. Batteries can be quickly deployed, used for a wide range of applications and flexibly sized for both power and energy to meet specific project requirements.

Due the changing needs of the power system as it transitions to high levels of renewable energy, and the technology’s versatility and falling costs, the use of battery storage is expected to significantly increase over the coming years.

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