French renewable energy developer Neoen hopes to have the additional capacity at the so-called Tesla big battery in South Australia to be on line and operating in March.
Neoen revealed late last year that it was adding 50MW/64MWh of new capacity to what is already the world’s biggest lithium-ion battery (100MW/129MWh) at what is formally known as the Hornsdale Power Reserve, next to the 315MW Hornsdale wind complex.
That added capacity will focus on new “grid services” such as inertia, and could supply up to 50 per cent of the inertia needs of the state as it moves towards its ambitious target of “net 100 per cent renewables” by around 2030.
By providing an “inertial” response, the big battery is effectively emulating the behaviour of synchronised spinning masses, such as turbines in conventional power plants, and acting as a “shock absorber” for the grid in the case of major disturbances.
In its application for a variation of its generator licence – lodged with the South Australia regulator, the Essential Services Commission of South Australia – Neoen says it is looking to have the battery extension participate in the market by early March.
In its submission published in late December, Neoen says it wants approval “as soon as possible and in any event by no later than 28/02/2020 in order to be able to finalise the AEMO registration process and be ready to participate in the National Electricity Market by early March 2020.”
The application reveals a few more details about the financials of the battery.
It says its mission is to”support the stability of the grid, reducing the risk and severity of grid events such as black-outs, and to maximise returns to equity.” It notes that the battery will be operational for around 15 years, and in 2020 the company expects revenues of around $30 million, about the same as it declared for 2018 and what is anticipated for 2019 (although the latter numbers have not yet been released).
That number could be beaten, particularly if the expansion comes on line on time, and if major pricing events like that which occurred in late December are also repeated.
According to Energy Synapse, the three big batteries in South Australia secured revenue of $1 million in just two days – and only from energy arbitrage. Hornsdale’s share was around $450,000, but this did not include the FCAS market, or its $4 million retainer to have capacity on stand-by for the state government.
Neoen managed to land support from ARENA ($8 million in grant funding), the Clean Energy Finance Corporation ($50 million in debt funding) and the South Australia government ($15 million in grants) for the expansion at Hornsdale.
The application to ESCOSA also reveals it is contributing $8 million of equity into the Hornsdale business to meet construction costs. That suggests a total cost of the upgraded capacity of $81 million, which compares to around $90 million for the original installation.
Neoen says the expanded battery will be capable of discharging more than 185MWh at the time of completion.
South Australia energy minister Dan van Holst Pellekaan said late last year that the battery expansion increase the overall savings delivered to the battery to around $87 million a year. This comes in reduced costs for the provision of frequency and inertia responses, a part of the market traditionally dominated by fossil fuel generators.
South Australia now has three large scale batteries in the state’s grid – the Tesla big battery at Hornsdale, the Dalrymple North battery next to the Wattle Point wind farm, and the Lake Bonney battery next to the wind farms of the same name.
Another smaller battery is set to join the market soon at the new Lincoln Gap wind farm near Port Augusta, while numerous other big batteries have been proposed by Sanjeev Gupta, Tilt Renewables, and in a new solar and storage development that has signed a contract with Alinta Energy.
South Australia is also developing a number of virtual power plants – technology that enables the resources of individual household batteries to be pooled and deliver services to the grid, including energy and frequency services.<
It has already intervened to play a role in keeping the grid stable when the country’s biggest coal generation unit at Kogan Creek tripped last October, and according to the latest government data, more than 5,500 systems have been installed or on order, for a combined capacity of around 62MWh, around half the capacity of the original Tesla big battery.