Monash University will conduct a study into how energy markets can better support and reward the roll-out of large-scale energy storage technologies, after receiving grant funding from the Australian Renewable Energy Agency.
ARENA said on Monday that $495,000 in federal government funding would go towards the desktop study to be conducted by the Grid Innovation Hub at the Monash Energy Institute, based in Victoria.
The $1.18 million grid storage market study aims to outline potential market design solutions and rule changes that could improve the valuation of, and boost investment in energy storage technologies across the National Electricity Market.
Researchers will also explore how alternative market designs could better support energy storage technologies, such as how day-ahead markets combined with balancing markets could be more suitable for a market transitioning towards more bulk storage.
While the urgent need for large-scale energy storage on Australia’s increasingly renewable grid is crystal clear, it has been less clear how developers can design projects that balance the ideal mix of services to the grid with a solid business case.
As Aurecon’s Steve Wilson wrote here in May, in the case of most big battery systems deployed in the NEM so far, revenue from energy and frequency control ancillary services (FCAS) markets has had to be backed up by funding support agreements to build a viable business model.
“Now, market actualisation that enables commercial projects without reliance on external funding is essential to see them realise the levels of deployment forecast for them – a similar process to what we saw with wind and solar,” Wilson says.
To this end, the Energy Security Board in its Post-2025 Electricity Market Design recommended further investigation of the longer term need for ahead-markets and development of an inertia spot market.
ARENA says the Monash grid storage market study could help identify further market design solutions and rule changes to better support energy storage technologies and to design efficient incentives for storage operators to create clearer investment signals.
“Further investment in storage solutions such as pumped hydro, large and small-scale batteries is vital to continue Australia’s uptake of variable renewable energy into the grid,” said ARENA chief Darren Miller in a statement on Monday.
“As traditional generation retires, we need storage to play a bigger role in firming up and balancing our electricity system.
“The team at Monash University Energy Institute’s Grid Innovation Hub has already achieved important insights in previous studies, and we see the Grid Storage Market study as just as important in highlighting the potential market changes required to incentivise industry to further invest in renewable energy storage.”
Professor Tony Marxsen, chair of the Monash Grid Innovation Hub says for a successful transition to net zero emissions energy markets, these markets must reflect the full value of all the services modern technology offers.
“Services from battery storage are not valued clearly at present, and this exciting research will reveal ways in which markets can better reflect their value to guide investment,” Marxsen said.
