The Australian Capital Territory has announced plans to hold a new auction for wind and solar power, plus battery storage, as part of plans to “future proof” its 100 per cent renewables target in the face of a growing economy and population, and a shift to electric vehicles and electric buildings.
The reverse auction – foreshadowed by Reneweconomy in late June, and formally announced today by climate change minister Shane Rattenbury – will seek to contract up 250MW of new renewable energy generation – up to 200MW of wind or up to 250MW solar – which will have to be delivered with 20MW/40MWh of battery storage.
The ACT has already contracted more than 640MW of wind and solar as part of its policy to deliver the equivalent of 100 per cent of its annual electricity needs from renewable energy by 2020 – a target which is expected to be met next month when the final project from those auctions, the already completed Hornsdale 3 wind farm, starts to deliver on its contract from October 1.
The focus now for the capital territory is to decarbonise transport and buildings, which will see a shift from petrol and diesel in cars, buses and trucks, and from the use of gas in homes and buildings. Rattenbury foreshadowed a further announcement on the broader decarbonisation plans in the days to come.
“We’ll soon reach 100% renewable electricity in the ACT, which is a great achievement,” Rattenbury said in a statement.
“But our city will keep growing, and we’ll be transitioning buildings and vehicles to be all electric. This is expected to increase electricity consumption, so we’re contracting more renewable electricity generation to ensure we stay at 100%.”
He said it was the ACT’s long term goal to “only use renewable electricity”, hence the need for storage, and the impending push into electric vehicles, and the phasing out of gas in buildings, which it has already started on a trial basis.
Rattenbury said the battery capacity will be located in the ACT and will support the local electricity grid, helping to manage fluctuations in grid voltage and frequency, and remove the need to upgrade network infrastructure.
It will also store excess electricity from renewable electricity sources, and “provide power to help avoid blackouts during periods of high demand and when large fossil fuel generators fail in heatwave conditions.” He said the battery could power 25,000 typical houses for two hours.
“In days to come, I look forward to announcing the next major phase of climate action in the ACT. The strategy will outline how we move to renewable energy solutions and what will drive the decarbonisation of the region up to 2025 and beyond.”
The auction – to start on November 15 and run into early 2020 – will be open to competing technologies, such as wave power, hydrogen, and solar thermal, although it is hard to imagine these technologies winning out on costs just yet.
However, it will offer only 10 year periods for the contracts for difference (as opposed to 20-year perviously), and will allow “real-time” bidding that will encourage project developers to compete against each other on price.
The timing of the new ACT auction is ironic, coming at the same time as the clean energy industry faces what it says is the lowest amount of investment in renewables since the Abbott era.
At that time, the main source of investment in renewables was the ACT scheme then led by Simon Corbell, that ultimately delivered more than $2 billion of investment in 10 large scale renewable energy projects and basically kept the industry going.
“The ACT Government is keenly aware that the energy industry, and the national economy more broadly, needs a policy landscape that supports long term investment and certainty,” Rattenbury said in a speech to industry people on Wednesday night.
“The National Electricity Market is rapidly running out of spare transmission capacity, particularly in locations with high wind and solar resources. The lead time to build new transmission infrastructure is out of step with the speed at which renewable electricity can be deployed.
“Australia‘s current regulation is dated, and is acting as a handbrake on investment.”
Rattenbury said the ACT has argued for changes to the way that marginal loss factors are calculated, saying that the current method “attributes to generators more losses than actually occur” and this tends to impact renewable electricity more severely than fossil fuel generators.
“I would like to see a move towards loss factors that actually reflect the physical losses incurred,” he said.
He said COAG has been slow to address transmission constraints, further underscoring the urgency of holding a COAG Energy Ministers meeting to address this issue and others. No COAG meeting has been held since last year because of the federal energy minister Angus Taylor’s refusal to hold one.
Rattenbury said, however, that he is “fully supportive” of the Australian Energy Market Operator’s Integrated System Plan to create renewable energy zones and strengthen transmission links.
Note: The total battery obligation is 20MW and 40MWh. Every participant who wins a portion of the auction will have that portion of the total battery obligation. I.e. a 100 MW wind farm would be required to construct a 10MW and 20MWh battery.
The auction can deliver a mix of wind and solar. For example, it could be: 100MW of wind and 125MW of solar; 50MW of wind and 187.5MW of solar; 200MW of wind and 0MW of solar; 0MW of wind and 250MW of solar; or any other combination where the wind capacity, multiplied by 80% of the solar capacity adds to 200MW.