The CSIRO and Australia’s electricity network owners this week released a study that showed the best to deliver reliability, bring down costs and lower emissions in Australia was through a national grid powered almost exclusively by wind and solar.
The cost savings over business-as-usual – a grid powered primarily by coal and gas – were significant, with consumer savings of between one-quarter and one-third of their bills.
But it does beg a question: If the grid is powered by “variable renewable energy” (or VRE), such as wind and solar (see graph above), what will happen when, as the detractors say, the wind don’t blow and the sun don’t shine? The answer, of course, is storage. But not nearly as much as the cynics suggest. And at not nearly the cost.
Australia will have a number of options for storage: battery storage located “behind the meter” (i.e. in households and businesses), battery storage located at grid level (next to wind and solar farms, and at various points in the network), plus hydro, pumped hydro, molten salt storage with solar towers, and other technologies such as fly-wheels.
Right now, however, it looks like the most prominent will be battery storage, if only because it will be the favoured technology of the anticipated 10 million homes and businesses that will combine rooftop solar and storage to reduce their bills, do their bit for clean energy, and to ensure energy security.
The CSIRO and Energy Networks Australia study was remarkable because it pointed out that – contrary to the political and ideological debate around wind and solar – these technologies can be relied upon to underpin the grid of the future and lower bills.
Over the past decade or two, the estimates for a “suitable amount” of variable renewable energy sources such wind and solar have jumped from as little as 10 per cent to nearly 100 per cent. This is despite the fact that some quarters are now pushing the idea that 30 per cent of total renewables is somehow the logical maximum.
CSIRO Energy chief economist Paul Graham says the 30 per cent estimate is clearly not true because South Australia has boasted more than that for several years. And until this year’s weather and network-related events, this has not been a problem.
“That estimate (of 30 per cent VRE capacity) does not seem to be grounded in reality,” Graham told RenewEconomy.
Graham says that additional storage is not needed for up to 40 to 50 per cent wind and solar penetration. That’s because the grid can rely on existing back-up ( built to meet peaks in demand and for when coal and gas “baseload” generators trip or need to be repaired).
Beyond those levels, storage needs to be part of the equation. But again, not as much as many would think. But as the back-up generators gradually exit the grid, they can be replaced by various storage types, until storage then becomes the principal form of back-up and grid security on the grid.
Graham says that the CSIRO modelling showed that at very high levels of wind and solar, a maximum of half a day’s average demand was needed for storage. In some areas of the grid, only around three hours might be needed.
This is an important point, because some renewable critics say that about a week’s worth of storage is needed, and multiples of wind and solar capacity required for back up. These would be the same people that argue that climate science is a hoax, but it is a view that has more traction than it should.
Graham says the CSIRO modelling indicated that at those very high levels, about 0.8GW of back-up was required for about every GW of wind and solar capacity. This is around the same amount of back up capacity currently needed by centralised power plants to meet peak demand and outages.
The good news in Australia’s renewable energy scenario is that the storage capacity will likely be paid for anyway by households and businesses reducing their dependence on grid load, and reducing their bills.
Battery storage is forecast to reach 32GWh by 2026, and 87GWh by 2050. Much of this will be “behind the meter” and will need to be harnessed by networks to achieve grid security, meet demand and balance the output of renewables. Such trials are already underway in various states.
Graham says that battery storage costs are falling so quickly that the CSIRO team already had to upgrade its forecasts and bring forward recommended action by five years. While South Australia is already venturing into territory where storage is needed, other states will follow over the next decade and will need to be prepared.
“What you need to be able to do is to meet is average load. You don’t necessary need to size batteries to cover the capacity of everything that is built,” Graham says.
“We will be relying on dispatchable solutions for a while yet, because it is there and it is valuable to use it. As it slowly phases down, then we will replace it with battery storage.”
The CSIRO and the ENA’s report envisages a system where nearly all households stay on the grid, despite their storage capabilities, and are rewarded for helping out the network by providing some of those services – stability and responding to peak demand.
But those forecasts depend on Australia quickly developing a coherent energy policy, and updating its market rules and policies before the battery storage takes off in full flight. On either measure, however, it might be fighting against time.
“We don’t have time to lose another five years,” Graham says. “Otherwise we are going to be locked into a different system.” And that comes from another of the CSIRO scenarios, where policy fails but technology marches on, and millions of consumers respond by quitting the grid.