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30MW battery to create renewables-based mini grid in South Australia

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Wattle Point wind farm. Photo credit: David Clarke.

Wattle Point wind farm. Photo credit: David Clarke.

The Australian Renewable Energy Agency says it is providing $12 million towards the $30 million cost of a major battery storage installation to be located on the Yorke Peninsula in South Australia and create a renewables-based mini-grid with the nearby Wattle Point wind farm.

The 30MW/8MWh large scale battery will deliver both network services and market services, and is the result of a lengthy study begun in 2014 called ESCRI (Energy Storage for Commercial Renewable Integration) by local grid operator ElectraNet, Worley Parsons and AGL.

It is designed principally to provide fast frequency response and help balance the local network, but it will also help reduce congestion on the Heywood interconnector with Victoria, because its placement means more power can be transported over the line. This should relieve constraints imposed by the market operator.

It will also have the ability to “island” the local network – pairing with the local 90MW Wattle Point wind farm and local rooftop solar PV as a local micro-grid to ensure grid security and so keep the lights on in case the network failures elsewhere in the state.

The battery is due to be in operation by February, 2018, adding to the Tesla big battery which is due to be in place by December 1, along with up to 100MW of demand response, and emergency back-up generators.

ARENA CEO Ivor Frischknecht says having a series of mini-grids across the state would help ensure grid security. If more were added, “it means over the longer term that state wide blackouts will be a thing of the past,” he told Reneweconomy.

Indeed, AGL – which will operate the battery – said last year after the state-wide blackout that renewable-based micro-grids were the best way to ensure grid security.

“If you have a system that was distributed – and didn’t have large transmission lines – you would have a more secure system,” CEO Andy Vesey said at the time. “That is a very reliable system – and you can only get there with renewable energy.”

The ESCRI study received expressions of interest from 42 international parties, and 17 formal proposals, including technologies such as lithium-ion, sodium-sulphur and advanced lead acid batteries; molten salt heat storage; hydrogen generation and storage; and a number of different flow batteries.

Project sizes ranged from 10-20MW and 20MWh to 200MWh, but as we reported last year, the 30MW/8MWh configuration was found to be the most useful for that location.

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Wattle Point and the nearby Dalrymple sub-station was chosen because it is a kind of microcosm of the state’s grid.

It’s at the end of the network, it has large penetration of renewables, and there is a possibility of it being “islanded” – meaning that it will rely on local resources, including battery storage, to keep the lights on should the rest of the network go down.

The local community in the Dalrymple comprises around 4500 households and around 500 commercial, industrial and farming businesses who currently experience outages.
Their average demand is 2-3 MW, so the battery will typically provide 2-3 hours of supply assuming it is charged while the transmission is restored. The battery is also able to operate at up to double its maximum output (ie 60 MW) for the first two seconds.

The final investment decision was announced by federal energy and environment minister Josh Frydenberg, who only last month was mocking the South Australian decision to contract Tesla and Neoen to build a 100MW/129MWh battery near the Hornsdale wind farm, saying it was too small to have an impact.

He said at the time that the Tesla battery could only store 1 per cent of the state’s wind output. But that is not the primary role of either of the two batteries – because both will provide the essential services to keep the lights on in case of a major disruption, such as a network fault or gas plant failure.

“The Turnbull Government’s investment in innovative technologies, such as this large-scale battery, will help to deliver affordable and reliable energy as we transition to a lower emissions future,” Frydenberg said in a statement.

He described it as the battery to be designed, built and commercially operated in Australia and backed by private investment from energy providers.

The irony was not lost on state energy minister Tom Koutsantonis, who said it was bizarre that the federal government had mocked the Tesla battery but was now boasting about an installation one third the size.

Frischknecht said the batteries would also show they can aggregate and “value stack” multiple revenue streams and deliver both regulated network services and competitive market services, thereby encouraging other energy developers to enter the market with battery projects.

“It may not be the biggest battery in the world, but pound-for-pound it will pack a big punch in demonstrating how utility scale storage can contribute to a stronger South Australian energy network,” he said.

Transmission network operator ElectraNet will design, build and own the battery – and operate some of the network services – and lease out the commercial operation (FCAS and energy trading) to AGL.

AGL is also installing 1,000 small-scale battery storage units in Adelaide to create a 5MW “virtual power plant” that will also add to grid security.

   

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  • Eb

    $30m for 8 MWh is $3,750/kWh which is around four times the cost of residential batteries! Though 30 MW is a large inverter. Does anyone want to estimate the battery’s forecast revenue per year?

    • Matty

      It amazes me that they keep buying Li-ion. It does not stack up on a LCoS (levelised cost of storage) basis. Then the whole thing will have to be packed up and replaced in 6-7 years as it would of reached it end of life. Why are they not seriously looking at flow battery technology with a 20+ year life span and much lower overall cost of ownership.

      • brucelee

        Proof of concept first? The bankability referred to in other articles?

        • BushAxe

          Definitely a proof of concept project! There’s just enough battery to let everyone have a play and gain some real world experience. The project will be linked to the Wattle Point WF so they can experiment with running a microgrid (one of the reasons of the location it’s at the end of the grid). Anticipated life is 10 years but again once as battery prices continue to fall I wouldn’t be surprised to see the storage capacity expanded once they have some decent figures to work with. It also looks like that it will form part of Electranet’s Emergency Frequency Control Scheme (EFCS) too.

          • brucelee

            So once large batteries are proven, these long life technologies (flow etc.) can be rolled out and the (potentially) lower LCoS should accelerate roll out.

          • BushAxe

            Pretty much, the batteries can be changed out as required it’s not like the inverters care what they’re connected to.

        • Matty

          Proof of concept? Flow batteries work, there are a number of different types. Hydrogen Bromide, Vanadium to name two. You may like to take a look at Elestor (Netherlands) who will be launching next year after a long period of trialling and pilot installations. This technology has been around for a while. Elestor will be a game changer. Then should you need to increase power or capacity its only an incremental cost to add another cell stack (power) or more electrolyte (capacity). Bill Gates said that flow battery technology will be a game changer for renewable energy some time ago.

        • Matty

          NASA has been using this technology for a long time, Elestor in the Netherlands has improved the technology and increased its scale. There is Vanadium Redox (pioneered in Australia at the UNSW). These batteries have lifetimes that are in excess of 20 years, they are effectively machines which means you can continually upgrade and replace OR increase the power and capacity of the batteries without buying a whole new system – unlike Li-ion.

          Elon is an amazing man and is doing some amazing things but let us not be too blinkered, he is a business man and will push his technology even if it is not the best available. Flow Battery technology is the game changer and more focus and attention should be in this direction if we really need want to move ahead. It comes down to the bottom line and levelised Cost of Storage is the key! When we have a grip on energy storage systems then we will be able to really rely on renewable energy systems to provide base load supply.

          • brucelee

            The comment was in reference to proof of concept (of use in Australian NEM). i.e batteries have not been proven to work on the Australian grid. Ridiculous I know, but the coalition are blind to anything that is not in our backyard.

            Once the Li ion (at lower capex) proves that batteries are awesome, the redox (high capex / lower LCOS) can be rolled out in big installations. cant come soon enough.

      • My_Oath

        Evidence the battery life is 6-7 years please?

        • Matty

          Just google Li-ion technology and depth of discharge and the effect it has on the lifespan of Li-ion battery systems. Thats why its not good to run the battery flat on your mobile phone as its lifespan decreases drastically.

          • My_Oath

            Yes I know that, but the latest information is that with computer systems controlling the batteries to prevent the run-flat condions that engender dendrification, the battery life is far longer than 6-7 years. 12-15 years is starting to look more likely.

          • My_Oath

            I know. That isn’t what I was talking about. They stated a life of ‘6-7’ years. The latest performance studies are indicating significantly longer than that when proper use is undertaken. (Mobile phone companies don’t want anyone to know that though. They want people to ruin their batteries so they toss the phone and buy a new one.)

    • Matt S

      The battery cost is only part of it, like the ‘module’ cost for a solar system. Power electronics and HV interconnect are probably pretty expensive. Still, it does seem expensive doesn’t it….

  • MG

    Skeptical perspective: if AGL already has dominant market power in a very concentrated SA market, why is ARENA giving AGL $12m of taxpayer funds to build another power station in SA so that AGL can trade more energy and FCAS? Remember that AGL (and their TIPS units) have been the primary player holding SA ransom by raising FCAS-regulation prices during temporary transmission constraints. Refer: http://reneweconomy.com.au/gas-generators-hold-south-australia-consumers-ransom-45108/ Also noteworthy: the 30 MW nominal capacity, likely designed this small so as to stay under the threshhold where AEMO would require the battery to become a scheduled unit.