From breakfast to bedtime: How first big solar battery is cashing in on evening demand peaks

Western Australia’s (WA) Wholesale Electricity Market (WEM) has welcomed its first solar hybrid project with the commissioning of Spanish group Naturgy Energy’s solar PV and battery storage project near the Wheatbelt town of Cunderdin.

It is the fourth utility-scale solar farm to enter the WEM and comprises a 125-megawatt-direct current (MWDC) solar PV system, but it also has DC-coupled four-hour 55 MW/220 megawatt-hour (MWh) battery energy storage system (BESS).

Data from the Australian Energy Market Operator (AEMO) shows that Cunderdin’s flexibility is its greatest strength, with the facility sending half its daytime output into the grid while time-shifting the other half to the evening peak when demand and prices spike.

This level of flexibility is not possible for coal- fired and nuclear plant which must function at minimum operational levels 24 hours per day to be viable. It means Cunderdin has the ability to span a full demand day, giving it a similar generation profile to coal or nuclear, but with the ability to ramp up and down as required.

The WEM, which typically sees over 3,200 solar hours per year, experiences around five to six peak sun hours in summer, dropping to between four and five hours in winter. The region is currently in the first of three peak summer months, with sunrise at 5am and sunset at 7.20pm.

Our analysis of WEM generation data for 14 December 2024, a typical summer’s day in the state’s main power market, shows Cunderdin exported half of its output during the daytime, with the other half used to charge its battery for discharge in the evening.

This enabled the facility to maintain its output at around 50 MW across a 14- hour period between 8am and 10pm, with a short dip at 7.30pm coinciding with sunset.

By contrast, the 100-MW Merredin solar-only project produced all its power between sunrise and sunset on 14 December, reducing its ability to take advantage of the higher-priced evening peak period (Figure 1).

Based on these profiles and assuming both are operating in merchant mode, Cunderdin’s total time-weighted price was A$117 (US$73) per megawatt-hour (MWh) versus A$68 per MWh for Merredin, highlighting the relative benefit of a hybrid versus a pure solar facility.

Our analysis of all WEM generation on 14 December 2024 also shows the Cunderdin facility ‘spreading’ the output from utility solar into the evening peak for the first time in the wholesale market (Figure 2). Data for other days in December shows a similar profile.

Rise of the hybrid

As more rooftop solar and renewable energy capacity is added to the WEM and intraday price volatility increases, hybrid facilities are set to rise in popularity by providing the ability to dispatch energy at the most favorable time to maximize revenues.

This trend is already visible in other advanced renewable energy markets such as California where hybrid facilities are helping optimize solar and wind farm operations by maximizing the intraday spread.

Rystad Energy’s economic analysis shows that post-tax levelized cost of energy (LCOE) for a hybrid solar battery project in WA at A$156 per MWh. With battery storage costs rapidly declining, we expect to see solar plus storage LCOEs fall further in the coming years.

As well as optimizing a facility’s output, time-shifting solar power also helps mitigate curtailment of renewable energy facilities, a rising feature of the WEM at times due to high and rising daytime output from uninterruptible rooftop solar.

However, it is worth noting that curtailment is less of a problem when high solar output and high temperatures coincide – during the latter, output from rooftop solar is used onsite to run household air conditioning units.

With WA now in full summer, and temperatures predicted to exceed 35 degrees Centigrade (95 degrees Fahrenheit) in the coming week, demand from air conditioning use is high and rising, further widening the intraday spread.

It is worth noting that the spread is likely to narrow as more standalone BESS capacity enters the WEM.

To date, the market has seen the entry of Synergy’s KBESS1 facility at Kwinana in mid-2023, and Neoen’s standalone four-hour Collie 1 big battery in October this year, with KBESS2 currently ramping up and other large-scale BESS due online in the coming 12 months.

A number of hybrid facilities are operational or planned in off-grid regions of WA but Cunderdin is the first such facility to be grid-connected in the WEM.

Cunderdin’s DC-coupled BESS configuration means the battery shares an inverter with the solar facility, making it less expensive than a conventional AC-coupled BESS configuration and more efficient in terms of energy conversion.

Sally Bogle is a vice president in the Renewables & Power team, covering the Asia-Pacific region at Rystad Energy. Michael Sarich, Michael Sarich is a senior vice president with the Renewables & Power team in Perth, and product manager for Renewables Economics.