The head of the Australian Energy Market Operator has rejected claims by battery technology providers such as Tesla they that can provide key essential services for the grid, in what is shaping up a critical debate that will influence the shape and speed of Australia’s renewable transition.
Tesla has argued in a new White Paper that its grid forming battery inverters can deliver grid services such as “system strength” quicker and at significantly lower cost than synchronous condensers, the big spinning machines that are the current technology of choice for AEMO and major transmission companies.
But in a speech to a conference hosted by Rupert Murdoch’s The Australian newspaper on Wednesday, AEMO boss Daniel Westerman appeared emphatic – battery inverters can do some but not all of what’s required.
“Batteries can provide some services to keep voltage and frequency stable, but they can’t yet provide sufficient fault current to keep the power system safe,” Westerman said.
The issue is important because it will have an impact on the speed and scale of the renewable transition in Australia, and potentially on Australia’s ability to meet the 82 per cent renewable energy target by 2030.
That target, an annual average of 82 per cent renewables, would require the main grid to operate at times with 100 per cent renewable energy penetration. AEMO had hoped to enable that in 2025, but that now looks unlikely, and a new timeline could be released in an engineering update planned for December.
In the meantime, Westerman has highlighted the need to obtain syncons – big spinning machines that no not burn fuel, or install clutches in existing generators – to ensure these essential grid services are delivered.
That urgency is reflected by the new announcement by the NSW state government that will allow Transgrid to skip over regulatory barriers to put in an early order for at least five syncons – probably worth a total of $800 million or more – because they are so hard to obtain.
Westerman cited the system black in Spain and Portugal earlier this year as an example of why prudence is needed, although it should be noted that those countries had little in the way of battery storage and grid forming inverters that could have added another layer of protection.
It was a theme of his address: AEMO is less worried about “reliability” – ensuring there is enough bulk power in the system to meet electricity demand – because the pipeline suggests that there is enough capacity on its way.
AEMO is equally or more concerned about “security”, which is about ensuring the grid can resist and respond to any major disturbances, such as the loss of transmission, or a major plant, or some other unexpected event.
“Pleasingly, AEMO’s reports show that a strong investment pipeline exists for generation and storage projects, strong enough to meet reliability standards by replacing the megawatts and megawatt hours that coal fired power stations provide today,” Westerman said.
“But what’s missing are the timely investments in system security services, to make sure our grid remains stable and secure when those coal-fired power stations switch off.”
Australian transition companies remain committed to investing in dozens of big syncons – machines that can way up to 250 tonnes – to install across the grid to provide those essential grid services.
In South Australia, the grid with the highest wind and solar penetration of any in the world (averaging 75 per cent over the last year and aiming for 100 per cent “net” renewables by 2027), four syncons and the partially complete new link to NSW has allowed AEMO to reduce its dependence on gas generators.
Now, only a single gas turbine, operating at a nominal capacity of just 40 MW, is needed in many circumstances. Soon, even that requirement will be removed.
“This reduces costs for consumers, and is one of many truly world-leading developments in Australia, as we work towards being able to keep our power systems stable and secure with up to 100% renewable energy,” Westerman says.
It’s a model that AEMO and transmission companies are keen to replicate across the grid. But Tesla – and others – insist that battery grid forming inverters can deliver those services.
“Grid-forming batteries provide a more reliable and resilient source of synthetic inertia than synchronous condensers, which rely on mechanical components and can experience a total loss if taken offline for maintenance due to even minor faults,” Tesla wrote in its recently published white paper.
See: Tesla says battery inverters can do the job of spinning machines at a fraction of the cost
“The modular architecture of batteries allow them to continue operating even when individual units fail, maintaining inertia provision without disruption.
“As the NEM transitions to higher proportion of variable renewable energy, the flexibility, scalability, and rapid response of batteries make them a more suitable solution for grid stability, with the average availability rate of batteries exceeding 99%”
It also attacked what it describes as “myths” around the issue of fault current.
“Historically, fault current was used as a proxy for system strength because it was directly tied to the physical characteristics of synchronous machines,” it writes.
“However, this relationship no longer holds with grid-forming batteries, which can provide system strength without needing to produce high fault currents. As a result, fault current is no longer a necessary metric for providing network support services.”
Grid forming inverters were first rolled out at scale at the landmark Hornsdale battery in South Australia, and now feature in virtually every new battery storage project is being built.
Some batteries, such as the Koorangie battery in Victoria, have specific contracts with AEMO to deliver “system strength”, other batteries with grid forming inverters are used to duck system strength charges that may be imposed on neighbouring wind and solar farms.
The transmission companies are clearly making a 50-50 bet on the technology – advocating a mix of syncons, and battery inverters (5 GW in the case of Transfield), but the syncon component is costly and will be loaded on to the regulated asset base.
The battery inverter companies are still hopeful they can get AEMO and the transmission companies over the line on this issue, but Westerman says AEMO is in a hurry to secure the necessary grid service.
“In 2021, I set AEMO a goal for AEMO to engineer grids that are capable of running at 100% renewable energy by 2025 and I’m pleased to say that we now know what it takes,” Westerman said.
“This engineering work, done collaboratively with industry, makes it clear that it is entirely feasible to run our large grids on 100% renewable energy, provided there are sufficient investments in system security.”
But he said it was not clear this investment was being made quickly enough.
“Urgent action is needed,” he said. “While the technical requirements are clear, we’re finding that the frameworks to guide investments for system security are not delivering quickly enough.
“There is a timing mismatch between the notification of a generator’s retirement and the time it takes to replace the system services that it provides.
“Around the world, countries are investing heavily in renewable energy and seeking alternative sources of system security, and this is creating significant supply chain pressures for equipment like synchronous condensers.”
He noted that gas turbines fitted with a clutch could also do the job. The battery inverter companies, meanwhile, who say that can do it quicker and at lower cost, fear they now have to wait while the transmission companies boost their regulated asset base with multiple billions of new investments.
Westerman said AEMO will update and release its next outlook for system security in December. That may also include a new timeline on when the grid can be expected to experience periods of 100 per cent renewables.
