The company providing the technology for the biggest battery project in Australia – being built, ironically, on the site of the biggest coal generator – has compared the country’s long and stringy grid to a “peal necklace.”
Andrew Tang, the US-based vice president of Finnish owned Wärtsilä Energy, which is responsible for the huge 700 MW, 2,800 MWh Eraring battery being built for Origin Energy, says Australia is one of top markets for battery storage in the world, along with the US.
The reason for this, he says, is its growing share of wind and solar which is now averaging around one third of all generation in the past 12 months, and up to 75 per cent at certain times, and well over 100 per cent in states like South Australia.
But it is also the shape of the grid, long and stringy unlike almost any other country in the world, with the possible exception of Chile.
“I refer to it as a pearl neckless,” Tang tells Renew Economy in an interview. “It’s a string, then every so often, there’s a big city, whether it be Adelaide or Melbourne or Sydney or Brisbane. And those are the pearls.
“That stringy nature makes it harder to build a robust network. If you think of the grid as a piece of paper, you want the dots all over the paper, because you want interconnections between all of those dots, and you want multiple redundant paths to flow that power from point A to point B.
“But if you have a long, stringy network, you can’t create that kind of robust redundant network. And that’s kind of the issue you have with Australia.”
And that, Tang says, is what is creating more opportunities for battery storage in Australia, because of the ability of the technology to deliver multiple services, including grid support, frequency control, and – with the latest software and hardware being installed at Eraring – synthetic inertia.
“When we first got going on some of these projects, they (the authorities) wanted us to add synchronous condensers in order to provide inertia on the system,” Tang says.
“And we resisted that on some of our bids, because the syncons are very expensive, and challenge the project economics. And it was kind of not the greatest use of capital, in our opinion.
“And we were really trying to push forward and say, and say, look, we can do virtual inertia with energy storage, with inverters.
“Fast forward a couple of years, and that’s exactly what’s happening right now. We’re gonna be doing synthetic inertia over at Eraring, and we are already doing synthetic inertia in the United Kingdom.
“And so really, the ability of what you can with a bi directional inverter and smart intelligent software, is really kind of opening up. Battery storage is an appliance device that has a lot of uses.”
Wärtsilä Energy’s first big battery project in Australia was the 250 MW, 250 MWh Torrens Island battery near Adelaide, owned by AGL and built right next to the ageing gas generators that will retire, and which will form a key part of a new clean energy hub.
Wärtsilä is also building a multi-stage big battery at Bungama in South Australia, and it is involved in a number of other projects competing for contracts in the federal government’s Capacity Investment Scheme, with the latest tender seeking 4 GW and 16 GWh of capacity.
But the company has actually been in the country for more than a decade when, as Greensmith, the battery specialist company that was later bought by the Finnish company, it was doing business with the likes of Zen Energy.
Tang says the Eraring battery captures some of the key developments in the technology and the decisions being made by battery developers and battery owners. It started out as a two-hour battery in its first stage, had more storage added in the second stage, and is now being expanded to make it a four-hour battery facility.
“When we contracted the two hour stage, that was kind of what was being done in the market then,” he says. “Tesla’s Megapack system was designed for 1.7 hours, and it really was kind of oriented around a frequency regulation, frequency response type of scenario.
“What you’re now seeing is the the ability to intelligently solve grid problems by creating a family of products. And you know, you pay more for the faster products because you use them for less duration. In essence, they fix the problem before it gets out.
“And then, as the market matures, you look for arbitrage and energy shifting markets in addition to frequency to fill out your portfolio, what we call a revenue stack.
“Prices are coming down too. BloombergNEF and the CSIRO GenCost report have both identified 20 per cent price reductions in the past 12 months, but Tang reckons that has been the scale of reductions in the price of battery cells – which make up around 60 per cent of a project cost – in just the last six months.
“It’s been pretty precipitous,” he says.
That’s been the result of huge gigafactories being built in China, largely on the expectations of a big surge in EV demand. While the EV market is growing, outside of China it has been slower than expected.
“So you have many Chinese companies that built these massive facilities, really state of the art, really gleaming and and you know, once you build one of those, you gotta run it right otherwise it’s burning a hole in your pocket.”
Interestingly, because of these price falls – and the threat of tariffs under the new Trump administration – he has been witnessing a stockpile of battery assets, and he’s not so sure it’s a great idea.
“The current thing that’s going on now is that, with the political uncertainty in the United States happening, people are trying to figure out if they can stockpile batteries in the United States,” Tang says.
“It’s called safe-harbouring. readers the current thing that’s going on now is that, with the political uncertainty in the United States happening, people are trying to figure out if they can stockpile batteries in the United States.
“It’s it’s got deeper ramifications in storage, because batteries don’t store well, they have calendar degradation, they have temperature sensitivities, and so you don’t want to store them in a really hot place or a really cold place.
“So there’s all sorts of reasons why this is riskier than storing solar panels. If you leave a battery alone and just put it on, you know, in a field, and you don’t plug it in, right? That’s the issue. You don’t plug it in, it does have a self discharge rate.”
