Funding for next-gen big batteries open next week, on road to fully renewable grids

A new $100 million funding round for next generation big battery storage installations, featuring advanced or “grid forming” inverters seen as crucial for the transition to 100 per cent renewable grids, will open next week.

The funding round – first revealed by RenewEconomy in November – follows the release of an important “white paper” from the Australian Energy Market Operator last year that highlighted the importance of grid forming inverters in grids that move beyond fossil fuel generators.

See: AEMO to fast-track “grid forming inverters” to help transition to 100% renewables

The funding round being managed by the Australian Renewable Energy Agency was finally confirmed in a media release sent out on Christmas Eve by the office of energy minister Angus Taylor – timing that would  ensure the landmark initiative would receive little or no media coverage at the time.

Grid forming inverters are a rapidly evolving technology.

They are often used in off-grid systems, and several recent on grid big battery installations (including the expansion of the Hornsdale Power Reserve in South Australia, pictured above) have featured the technology, a crucial part of the growing revenue and capability stack of battery storage.

But recognising the key role they can play in a future grid dominated by renewables is a relatively new development.

The ARENA funding round is designed to ensure these are rolled out in bigger installations to give a true test of their ability to manage grid fluctuations and disturbances, and provide many of the crucial “grid services” that have hitherto been provided mostly by coal and gas generators.

The funding round is designed to support battery storage installations of at least 70MW (inverter rating), although the storage duration will likely depend on what other services will be provided by the big battery).

It will target at least three projects, and while it allows for retrofits and extensions of existing projects, the structure of the funding allocation means that at least two of the winning projects will have to be new installations. A maximum of $35 million will be granted to an individual project.

“Grid scale batteries and other types of energy storage technology will be vital to support our future electricity system powered by renewables,” ARENA CEO Darren Miller said in a statement, also issued on Christmas Eve.

“This funding round will demonstrate the role of advanced inverters in grid scale batteries to provide system stability, facilitating a more efficient transition and accelerate the uptake of renewable generation.

“We’ve seen promising signs that advanced inverters can support system stability, but it’s clear public sector investment is still needed to prove the technology at scale. We’re confident that ARENA funding will help drive the uptake of this technology and provide valuable lessons that will benefit the industry as a whole.”

Expressions of interest open next Tuesday (February 1), and close on March 31. Winning bids are expected to be identified later in 2022, with financial close due by December 2023, and project completion by mid 2025.