Coal and gas move to renewables and storage

renewables and battery storage

With Enel X announcing the installation of battery storage systems in shopping centres in Melbourne and on the NSW central coast, this year may see a shift in the energy market as we transition from coal and gas to renewables and storage.

AEMO has for many years been looking at a fundamental shift in generation, transmission and energy usage. AEMO is now focusing on firming electricity, electric vehicles and the regulatory framework to enable these changes to occur.

Key federal policies have underpinned the need to progress an increase in renewable energy. Growth in renewable energy is dependent on the growth of storage to be fully utilised and the need for greater transmission infrastructure is required to link the projects to the end users.

In recent years we regularly saw that the NEM had the potential to operate with very high levels of renewables, but the limiting factor still remained that thermal generation provided the firming, reliability and system security when the wind was not blowing or the sun is not shining. At the end of December, South Australia produced 104% of its demand with renewable energy and exported the extra electricity to the neighbouring region.

AEMO reports show there is currently 21GW of new projects undergoing connection assessment and they expect 5GW of new capacity to be added during FY2023 adding to the 4GW currently operating.

To assist this influx in renewable generation ARENA granted $176m in December 2022 to fast track 8 new battery projects bring in 2.0GW/4.2GWh of storage. The plan is to triple the battery storage across the NEM by 2025.

Over the next year we will also see more transmission lines connecting the nation as more renewable energy zones are connected to the load centres under the Rewiring the Nation policy. The first transmission projects to receive Rewiring the Nation funding were announced following the October 2022 Federal budget. Recently funded projects include the VNI NSW-Victoria interconnect, Marinus Link and various NSW transmission projects connecting the renewable energy zones. This funding will assist in building the transmission lines over the next 10 years.

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MORE WRITE DOWNS

In a sign that not only coal fired generators are impacted by changes in energy industry, last Friday more bad news came out the Australian Stock Exchange with Genex Power announcing a $16.5M write down on the value of its recently completed Jemalong solar farm due to dropping power prices.

In its FY21 results presentation, Genex Power outlined its revenue was underpinned by long term contracts for its operating assets and its projects in construct.

The Jemalong solar farm was completed on time and on budget so any losses could not be directed at this. The project located in western NSW was bought from solar developer Vast Solar.

The Jemalong assets were commissioned in July and are operating ahead of expectations however its recognition of the merchant revenue from the project in a falling market has caused value to be written down.

Despite the forecast for falling electricity prices, Genex is powering ahead with other developments including the Kidston Pumped Storage Hydro plant that will sit alongside the existing 50MW Kidston Solar farm that is planned to expand by a further 270MW in the future.

Genex is banking on the 250MW Kidston pumped hydro storage facility providing an arbitrage opportunity for the company as it can charge its storage by filling the upper reservoir during low day time prices and generate up to 250MW over the higher price parts of the day most likely the morning and evening peaks. If all modelling goes to plan Genex may also add up to 150MW of wind at the Kidston energy hub by 2025.

The company is also looking to diversify its portfolio geographically by installing a 50MW/100MWh battery at  Bouldercombe, in Queensland. The battery is likely to be operational by 2023 with the 250MW Kidston pumped hydro storage facility likely to generate by 2024.

LIQUID BATTERY

Is metal battery technology the next game changer? Bill Gates has put some of his money behind the concept supporting a Massachusetts company to commercialise and grow its long duration energy storage systems.

Ambri has obtained $196M in funding from its largest shareholder, Bill Gates with Reliance Industries Limited from India and various other institutions including a Japanese Energy Fund.

Currently Ambri’s batteries have capacities of between 400kWh and 1,000kWh. 250kW batteries can provide storage from 4 to 24 hours.

Liquid metal batteries are constructed of a liquid calcium alloy anode, a molten salt electrolyte, and a cathode comprised of solid particles of antimony. The material used in the construction are relatively low cost and easy to assemble keeping the overall price down.

Ambri claim calcium and antimony electrodes are less than one third the cost of lithium, nickel, manganese, and cobalt currently used in lithium-ion batteries.

The new battery technology is also likely to last 20 years with very little performance degradation over time.

Batteries are likely to cost up to 50% less than equivalent lithium-ion systems from 2022 to 2030.

The longer-term plan for Ambri is to construct high volume manufacturing facilities in the United States and globally while in the short-term Reliance New Energy Solar will develop and manufacture the batteries in India.