In September 2016, South Australia experienced a once-in-50-years storm with gale force winds, at least 80 000 lightning strikes and two tornadoes. Transmission towers were felled, power generators struggled to remain connected to the network, and South Australia lost its transmission connection to Victoria. The result was a state wide black-out, which took several days to fully recover from.
Not long after, the Government of South Australia announced a number of projects to address urgent system security, reliability and price risks for its energy customers.
One of the projects was the Hornsdale Power Reserve, a 100 MW battery project, owned by Neoen, supplied by Tesla, located at the Hornsdale Wind Farm and covering approximately one hectare of land. The Government’s goal for the large-scale battery project was to improve power system security and the affordability of energy.
To support the detailed definition of project requirements, installation and connection to the national electricity grid in record time, the Government needed a team with deep engineering expertise in power systems, battery storage technology, energy markets and an understanding of the unique challenges facing the South Australian electricity network.
Aurecon was engaged at the outset of the project as the Government of South Australia’s Specialist and Technical Engineering Advisor. Aurecon was able to take this highly ambitious goal and advise on a successful project that delivered on all objectives through a project design and delivery that was deeply innovative, commercially savvy and highly collaborative.
Hornsdale Power Reserve is unique not just because it is the world’s largest lithium-ion battery system or because it was conceived and constructed in the record-breaking time of six months. It also addresses specific technical and market needs in the South Australian network, providing a targeted contribution to the state’s objective of ensuring reliable, affordable and clean power.
Aurecon advised the Government of South Australia throughout all phases of project definition, specification, procurement and execution through to final testing. This included assessment and stakeholder engagement on how the battery’s unique capabilities could best be deployed to meet key government objectives, and on the development of the formal operating protocol for the facility.
Aurecon identified that the battery’s capability for a near instant response to the needs of the network should be used to stabilise the power system frequency following contingency events. It now provides a premium service to the frequency control markets, dispatching as needed within the blink of an eye – in around 100 ms (or 60 times) faster than coal generators are required to respond.
Aurecon also advised on its deployment to protect South Australia’s interconnection with in Victoria emergency situations. This function is now a key element in how the Australian Energy Market Operator manages power system security for the state during extreme disturbance events.
Applying deep understanding of the dynamics of Australia’s energy markets, Aurecon shaped the industry-first operating protocol. The operating protocol defines how the battery operates as needed to deliver on the project’s security and energy affordability objectives.
Battery storage technology is highly flexible and can be deployed for a vast array of functions. The operating protocol has provisions for review and adaptation to meet the changing needs of the power system. This nimble approach ensures the project will remain relevant and adaptable to new challenges that arise in the state’s ongoing transition to more renewable energy.
Through the application of appropriate risk management, safety-in-design, health and safety management plans and procedures, and a collaborative approach to resolving issues, the project was delivered on schedule with an excellent safety record including no lost time injuries.
After one year in operation, Aurecon produced a report analysing the performance of Hornsdale Power Reserve and highlighted that the use of similar fast response systems could significantly improve the reliability, affordability and sustainability of energy across Australia.
A new report released in February 2020 further demonstrated the market benefit of the Hornsdale Power Reserve to the National Electricity Market; reducing the cost of Frequency Ancillary Services by approximately $116M in 2019.
The 2020 report also provided analysis of the major network outage in Victoria on 16 November 2019 which resulted in the South Australian region of the National Electricity Market becoming “islanded” or separate from the rest of the national electricity grid.
The project has demonstrated the ability of such large storage schemes to be successfully integrated into the electricity network and markets. It has provided substantial support to the electricity network and has delivered more than AU $150 million in electricity cost savings in its first two years of operation.
In the wake of the Hornsdale Power Reserve’s success, the Australian Energy Market Operator has reported an unprecedented growth in energy storage registration and connection applications.
Aurecon worked in partnership with the Government of South Australia throughout each project phase to achieve what many thought impossible – commissioning a 100 MW battery in six months. The project continues to capture national and global media attention for its scale, delivery and innovative design.
Innovation is evident in several aspects of the project; in the world-first services it provides to the electricity network, how it participates in complex energy markets, and in the commercial structure that provides maximum value for the Government of South Australia.
The successful execution of the project in record time was highly contingent upon excellent and transparent collaboration between all stakeholders. Insights gained through stakeholder engagement into the project design and tender evaluations meant that project risks were minimised, and the delivered value was maximised.
The transition to renewable energy sources is crucial to combating climate change, and Hornsdale Power Reserve plays a key role in progressing the technological innovation that will be needed to achieve this. The project’s success has been a major catalyst for Australia’s energy storage industry, which will in turn play an increasingly critical role in Australia’s future energy system.