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South Australia targets battery storage in new renewables auction

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South Australia’s state government has announced plans for a new clean energy auction, saying it intends to target battery storage and other “dispatchable” renewable energy sources for around one-quarter of the government’s electricity needs.

The government earlier this year called for expressions of interest in a tender for all of its electricity needs – or around 481GWh – from “low carbon” energy, but the results of that tender have not been announced.

There is still no word, for instance, on how the government will source the other 75 per cent. A spokesman said no decision had been reached. Two of the competitors for that tender are the mothballed Pelican Point gas plant and the proposed 110MW solar tower with storage plant in Port Augusta.

The decision to hold a new tender targeting “dispatchable” renewable energy generation for the 25 per cent share of the government’s energy needs is interesting, particularly in regards to the recent coverage of the so-called ‘energy crisis” in South Australia, where wholesale electricity prices jumped after a surge in gas prices and network constraints.

battery-glow

SA energy minister Tom Koutsantonis said those suppliers who submitted proposals to the original expressions of interest in response to the EOI will be approached and invited to tender.

He said dispatchable renewable energy sources included bioenergy, solar PV with battery, solar thermal and solar PV behind the meter with battery, but he focused his comments on battery storage.

“By procuring one-quarter of the state government’s electricity requirements from renewable energy sources that use battery storage technology we can dramatically reduce our carbon footprint and at the same time incentivise technological developments in this industry,” Koutsantonis said.

“Battery storage of renewables is the future of energy generation and is an extremely exciting proposition for a state with abundant renewable energy resources. We have an opportunity here to create investment and jobs in this space in South Australia before anywhere else.

“As these technologies develop we will see downward pressure on prices because our extremely cheap wind and solar power will be able to be delivered in a targeted way when it is needed most, not just when the sun is shining and the wind is blowing.”

Koutsantonis’ comments no doubt bare reference to the recent barrage of criticism directed at the South Australian government that its ambitious support of renewable energy in the state has added to electricity price volatility for consumers.

It is understood that the proposals from Pelican Point and SolarReserve are still in the running.

However, the proposal from Pelican Point may need to be adjusted because of the soaring cost of gas. The 110MW solar tower proposal of SolarReserve also would not be scaleable to meet the 25 per cent “dispatchable” component.

Another known proposal is for the Kingfisher solar PV and battery storage project, which could be the world’s largest to date, but its first stage may fit into the smaller component.

Repower Port Augusta, which described the move as “positive” for renewable storage, renewed its calls for the remaining 75 per cent to be used “to make solar thermal happen” in Port Augusta

“South Australia leads the way on renewable energy,” spokesperson Dan Spencer said. “The State Government has taken a big step today to bring on new battery storage which will make us a leader in the next phase of Australia’s shift to renewables. Now, Port Augusta needs to see the rest of the Government’s power use prioritised for solar thermal.”

He noted that during the federal election, the Turnbull government said building solar thermal in Port Augusta would be the number one priority for the Clean Energy Innovation Fund.

The government’s current electricity purchasing arrangements will expire in late 2016 for the small sites and in 2017 for large sites.  

  • Ian

    This move by the South Australian government to show a willingness to use its role as a very large energy consumer to promote low carbon energy production is encouraging but there is a very big Caveat.

    Trying to source 25 % of their energy use as dispatchable energy may not be the best use of public funds.

    ACT has contracted for 2MWH of storage at a cost of $2 million and that is considered good value for money. The SA governments energy requirement we are told is 481GWH a year or 1.3GWH a day . Let’s be generous and say they want to source 25 % of that as battery storage or 325 MWH at a probable cost of $325 million. The battery market is evolving rapidly and today’s prices may be double or triple tomorrow’s.

    A better use of their resources would be to support existing shovel-ready and planning approved wind farms with PPA’s or similar mechanisms.

    We know wind and solar resources are more reliable if distributed over a wide geographic area and up to 80% wind and solar penetrance of the grid can be reliably achieved. We also know that standby power resources are only required very occasionally so these are best shared over a wide geographic area of power consumption. Victoria and NSW are larger markets and still have coal generation resources that are likely to be wound down over the next few years but can buy a grace period for technologies like batteries to catch up, they also have access to considerable hydro resources. The interconnector with Victoria can facilitate all these factors and should be fully supported by the SA government. For now this should be their main source of dispatchable power.

    The third action should be conditional support of existing gas fired generation in a dispatchable role. The gas fired power generation will be supported with capacity payments and prime access to the electricity market if and only if they support the full access to the wholesale market by distributed solar and storage.

    • Brunel

      But anything is cheaper than the submarines.

      • Ian

        So glad you mentioned that, these would form excellent standby electricity generators.

        • Brunel

          What would.

  • David McKay

    Should also note that there are currently 2 Solar Thermal proposals for Port Augusta – Solastor & Solar Reserve.