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Finkel says Australia can, and should, be world leader in energy storage

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A new study led by chief scientist Alan Finkel has underlined Australia’s role as a leader in the household battery storage sector, and says Australia can, and should, be a leader of energy storage of all types, including renewable hydrogen as an export opportunity.

Finkel’s new report Taking Charge: The Energy Storage Opportunity for Australia is a 9-page summary and update of a detailed report on energy storage by the Australian Council of Learned Academies (ACOLA) released in November 2017.

Readers may remember that report highlighted how little additional storage was needed – even with up to 35 per cent to 50 per cent wind and solar in the system, but also how critical it would be to a modern, decarbonised grid. Its conclusions were immediately attacked by conservatives as “eco-evangelism”.

The latest report includes updated data – such as the 21,000 battery storage systems estimated to have been installed in Australian homes in 2017.

More importantly, it includes much detail about the opportunities ahead, and comes at an important time as Australia’s political debate once again resolves, sometimes crazily, around the level of wind and solar that can be incorporated into the grid.

“We are entering an era of rapid technological transformation in electricity generation and usage,” Dr Finkel said in a statement.

“Energy storage technologies can not only help us benefit from the transition but to prosper through the creation of new industries, new jobs and opening up export markets.”

The latest report notes the challenge for policy makers is to put storage at the heart of a smarter electricity grid, and deploy it at a grand scale: “supporting the transition to renewable generation sources, helping to match energy supply to energy demand, and empowering consumers to manage their costs.”

It noted that batteries are modular and can be initially installed as small units then scaled up as needs and funds arise.

“Further, they can be installed close to where they are needed, making the transmission costs either small or non-existent. In some cases, batteries can save investment costs by avoiding the need to upgrade distribution lines in cities,” it noted.

It noted the opportunities for pumped hydro, for Australia’s mineral resources – such as nickel and cobalt – in the coming energy storage boom, and also pointed – in a small chapter titled “sipping sunshine” to the opportunities of exporting “renewable hydrogen” to countries such as Japan and Korea.

“Renewable hydrogen made by using solar or wind electricity to split water into hydrogen and oxygen is a logical choice,” it says.

“The only by-product in production is oxygen. During use, the exact same quantity of oxygen is consumed to produce heat or electricity, and the only by-product is water vapour.

“Japan has made hydrogen a national priority to power heavy industry and drive the hydrogen fuel-cell cars produced by its carmakers such as Toyota and Honda.

“Australia is well positioned to be ‘shipping sunshine’ in the form of exported hydrogen. Hydrogen gas can be cooled to a liquid state or converted to ammonia for shipment by sea.”

Renewable hydrogen has long been seen as a huge opportunity for Australia to use its fantastic wind and solar resource to create a “green LNG” export industry of the same size as the fossil fuel based one now.

However, most money has so far gone into a scheme to create hydrogen from Victoria’s brown coal resources. An astonishing $500 million will be invested to deliver just three tonnes of brown coal hydrogen under a scheme co-sponsored by the Japanese government.

The new Finkel report was welcomed by energy minister Josh Frydenberg, who underlined the government’s commitment, via ARENA, to fund three new large battery storage systems in South Australia and Victoria, and some “small virtual power plants”.

Frydenberg’s press release managed to avoid any mention of the Tesla big battery – which at 100MW/129MWh is the biggest in the world – or Tesla’s proposed 250MW virtual power plant in South Australia, or a smaller one proposed by Sonnen.

The fate of those two VPPs is up in the air as the new Liberal state government works out how it can adopt a Labor policy without looking like that is what it is doing.

Frydenberg has previously ridiculed the Tesla big battery as too small to provide power to the whole grid – a comment about as bright as Treasurer Scott Morrison’s assessment that the battery would be as useful as the Big Banana (pictured above).

In fact, the Tesla big battery at Hornsdale has already significantly reduced prices in the FCAS market in Australia – and captured a large market share, notes the new Finkel report – and caused the market operator to rethink how batteries can be used to further strengthen the grid and ensure there are no supply shortages.

Frydenberg noted the Finkel report highlighted how the cost of batteries is declining as Australia’s technology, manufacturing and market competition is advancing and confirms the critical role energy storage will play in the transformation of Australia’s electricity system.

“As more renewable energy – mainly in the form of solar and wind power – enters our electricity grid, the need for energy storage solutions grows,” Frydenberg said. “This is why the Turnbull Government put energy storage on the agenda – to deliver a more affordable and reliable energy system for Australians.”

   

Pocket
  • WR

    Grid-connected households would really only need enough storage to knock the top off the morning and evening peaks everyday to reduce demands on the network. This will, hopefully, reduce network charges. The amount of storage needed to do this would be about 50% of a household’s peak daily energy use.

    For a house with solar panels, having this small amount of storage would allow them to meet 80-90% of their yearly energy demand from solar+storage. You don’t gain much by adding additional storage beyond the 50% mark, unless you are off-grid.

    When solar-rich micro-grids become prevalent and drive down the cost of daytime electricity, houses without solar will be able to use small amounts of storage to gain the same benefits as solar households.

    (See my Excel pv model to see how this would work – https://www.youtube.com/watch?v=6FEP2dKXesQ)

    • MaxG
    • masongeo

      Wade, thanks for sharing your -March 2016 version of your spreadsheet.

      I downloaded and used your -March 2015 version. Very capable. Like all models which use average data, the results are significantly more optimistic in comparison with actual site data. But much better than guessing!

      The spreadsheet would be much more user-friendly if you make some simple improvements to the layout of the user input on the ‘Residential PV + Storage +EV’ sheet. Some suggested improvements:

      – Move the purple results over to the right a little.
      – Re-locate the data input cells (orange and yellow cells, currently above the purple results rectangle), one beneath the other in a single column, to the left of the purple results. Re-label the data input cells to be simpler, more meaningful (e.g. ‘PV modifier’ should be ‘PV size, kW’; ‘Average Power Demand’ should be ‘Average daily usage, kWh’). Require simple data entry (don’t ask the user to divide their average daily usage by 10).
      – Re-arrange the purple results into a simpler layout (it’s kind of scattered at present).

      If you wish to discuss, you can email me at masongeo at ozemail dot com dot au.

      • WR

        Yea, I know the layout is a bit of a mess. It’s a legacy of when I coded the auxiliary generation algorithm in the renewable energy model. I was using two horizontal split screens with the inputs and outputs in the top screen and the year-long graph in the bottom screen. The screens were horizontal so I could view as much of the graph as possible. The result was that the inputs and output display also ended up with a horizontal layout.

        Also, I like space. Maybe I’m a bit claustrophobic.

        The Average Power demand input is a coefficient because I frequently changed the other multipliers in column G to give different Demand Profiles. I can simplify that and turn it into daily energy value. I might do that and upload it because I have also added another 2 years of data to the renewable energy model.

        • masongeo

          I understand how spreadsheets grow with the developer’s preferences. Any changes you can make to yours would be helpful to other users.

          Something I want to say is that I agree with your general conclusion in your original post: “.. The amount of storage needed to do this would be about 50% of a household’s peak daily energy use.” My own modelling confirms this; my domestic consumption (yearly average ~16 kWh/day) would be optimally satisfied by PVs (currently 7.24kW) and a possible battery ~7-8 kWh capacity. Larger battery capacities only yield incrementally smaller benefits because most of the storage needs (mostly in the evening peak between say ~5-9pm) have already been satisfied. A corollary is that relatively large batteries (e.g. Powerwall, ~13.5 kWh) are not optimal for average and smaller users, but others have noted that as well.

          • WR

            I have uploaded the current model to the google drive account. It has an extra 2 years of data for the renewable energy model (4 years in total) along with a couple small changes to the PV+battery calculator. The links on the Youtube channel have been updated to link to the new model.

          • masongeo

            Nice changes, thanks Wade.

          • MaxG

            Yep, can confirm this: battery = 1/2 * consumption…
            Our number 26/2=13 we pull daily off the 20kWh battery.
            We’ve got 20kWh to go off-grid at any time; e.g FiT goes.

    • rob

      smart bugger aren’t you! well done

    • Ray Miller

      While I’m in the camp of also calculating what is needed, it does seem the model which works is the scale model. Get as many units out there at the lowest cost.

      So as has been demonstrated by the PV rooftop revolution it is more important to manufacture and sell at scale then to “optimise” individual installations. This includes the batteries, too small in capacity and installation costs dominate, too large and the price point increases and market falls. As we have seen the growing scale of PV’s as time marches the systems get larger, so it will be for batteries.

      As always energy efficiency is the dominant and key to the lowest costs, improving efficiency changes the energy storage % the fastest and cheapest.

  • Ian

    I’d like to see pv owners incentivised to install as big a pv system as possible to charge a battery to match to provide grid services as an aggregate.
    Something like decent the FITs for peaks and generally flattening out the RE supply.
    Instead of spending $5b as many in the coalition are suggesting, they could fund such a scheme.

    • MaxG

      Neoliberals, by default, will not create any benefits for its people, but only for corporations; who in their mind think that the country would be better off if run by them.

  • Ray Miller

    Judging by the extra orders for Tesla storage units after the proven performance at scale in SA, Tesla, Elon and Jay have in one go changed the grid battery storage landscape forever.
    We all would be well placed to take the learned advice of Alan Finkel.

    • Nick Kemp

      Yes but Alan Finkel is just a scientist. We all know that politicians are better at working stuff out than those bookish types

      • RobertO

        Hi Nick Kemp, Your right pollies are better and I guess we had better add the efficiency experts as will. Hydrogen can not work, it too inefficient to work (or it leaks too much or it so dangerous, or we have no pathway to transport it), all the politically correct reasons not to do it.
        These scientist chaps know nothing and so does ARENA. Did you know Nick that Hydrogen is the most abundant element in the universe.
        This is all hot air. These guys must be going out of business in the next few days (since 1927 so they can not be making a profit)

        http://nelhydrogen.com/about/#documents-and-brochures

        There are many other doing their part. FC will be part of our future

  • solarguy

    “Eco evangelism” Christ, they must have dug deep into their collective dozen brain cells to come up with that one.

    Bloody shame we can’t legislate against stupidity.

    • MaxG

      I am surprised they did not call it eco-terrorism 🙂

      • solarguy

        Max, I’m surprised that they don’t want to burn us at the stake.

        • ColinSC

          We are not fossilized yet