S.A. to announce storage winner, delays EST mechanism

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The South Australia government is expected to announce the winner, or winners, of its 100MW battery storage tender in the next week, and will need to do if it is to have the equipment installed by the coming summer as planned.

Candidates shortlisted by the government for the biggest battery storage tender in Australia to date – and one of the biggest in the world – say they are expecting an announcement possibly later this week, which would give them five months to have the installation in place by December 1.

The S.A. government is making battery storage one of its key priorities as it seeks to ensure that the state-wide blackout of last year, and the load shedding events of earlier this year are not repeated this summer.

aemo short

The Australian Energy Market Operator has underlined how important this storage capacity will be in maintaining the state within reliability standards this summer and to keep the lights on (see graph above).

The government also wants to build a 250MW peaking gas fired generator, but that won’t be ready in time, and instead it will have to rely on 200MW of diesel gen-sets to be installed by SA Power Networks, which last week won a special dispensation from the energy regulator to do so.

Network companies are not normally allowed in the generation game – although some are making a pitch to do so, particularly for micro-grids and the like – but the Australian Energy Regulator ruled SAPN could operate the diesel generators, but only in the case of emergency, and as long as it didn’t boast about it (market it).

Another key plank of the government’s energy plan – the establishment of a new energy security target – has been put on hold for six months, amid questions about whether it would ever by introduced.

The reason for the delay is ostensibly to gauge the response and developments to and arising from the Finkel Review, and the decision was announced the day after Finkel was released.

But most people saw Finkel coming, and it is thought that the poor reaction to the details of the government’s  energy security target, and its proposed preference for “real inertia” over other services that could be provided by renewables with battery storage may have played a role.

The EST ostensibly aims to lift the amount of “dispatchable” generation situated within the state from 36 per cent (its current level with its gas generators) to 50 per cent by 2025.

But there are fears the rules as presented would simply mean more gas generation, and effectively halt the installation of more wind and solar plants, whose share is already around 50 per cent of demand.

Energy minister Tom Koutsantonis said in a statement if the federal government did approve a clean energy target, then it was likely that the state’s EST would fold into that mechanism.

What might be interesting is that if the CET does not go ahead – due to Coalition in-fighting between moderates and conservatives – but new “dispatchable generation” rules do get approved.

That will likely see AEMO given control over how much storage or firming capacity is needed within a region, and what type (real, synthetic or other).

That may also obviate the need for an EST, although the state has moved on its energy plan because it lost faith in NEM institutions during the blackout and load-shedding. The new AEMO chief Audrey Zibelman, however, is playing a pro-active role.

She has been one of the key drivers behind a demand management initiative that will seek 100MW of capacity in South Australia and Victoria that can be delivered at critical moments by rewarding large and small users to turn off machines or shift their load.

That is expected to be in place by December 1 and has also been extended to NSW, where 70MW is being sought in  state dominated by coal and gas but which also ran into load shedding scenarios.

All eyes on the short term, however, will be on the storage tender – given the sheer scale of the tender and the profile of those competing for the mandate, with all major battery storage technologies – including Tesla, LG Chem, Greensmith, Kokam and others – in the running.

The tender called for 100MW/MWh of storage, but allowed for variations, including up to 200MWh of storage and for installations in different sites.

Victoria is also conducting its own tender for battery storage – although its deadline is for the installation to be in place by January 1, with two installations of 20MW of capacity and a total of at least 100MWh of storage.

Applications closed a fortnight ago and the government says it received a “strong” response. More than 100 expressions of interest were received in the first round.

An independent assessment panel will undertake short-listing and assessment, ahead of the Minister making a final decision on projects approved for funding.

“We anticipate being able to announce the successful proponents by late August 2017,” a spokesman said. “Contracts are expected to be executed and projects commence in late August ahead of the January 2018 construction completion.”

Last week, the Northern Territory government announced that it had awarded a tender for 5MW of battery storage capacity (with 40 minutes storage) to New Zealand utility Vector, using LG Chem batteries, for Alice Springs to manage and expand that city’s high penetration of solar.


  • DJR96

    The EST was a half baked concept to start with, so this is good news.

    What SA will learn is that the battery installation/s will achieve the aims of the EST as well. Which in turn will provide the wide acceptance of battery storage as being able to provide multiple roles in the NEM. And more of them.

    • Daniel Boon

      what does EST stand for please …

      • DJR96

        Energy Security Target.
        It is SA’s attempt to ensure the network there is secure and stable.
        It intended to ensure a relatively large proportion of generation with inertia is always on hand to provide this security. But to do that would largely preclude other technologies from being able to provide the same. It would seem some fossil-fuelled lobby had got an ear and convinced them of this.
        However, battery storage/inverters can provide the same security and stability, arguably even better than synchronous generation because it can respond virtually instantaneously. Providing the regulations allow them to.

        • Daniel Boon

          EST is the abbreviation of Environmentally Sustainable Technologies up this neck of the woods (eastern seaboard)

          • john

            That does not cut it mate.
            Battery back up can immediately cut in.
            IT HAS nothing at all do to do with what ever your idea is about the “{ Environment }” .

          • Steven Gannon

            You’ve misunderstood him, he was confused about the acronym.

          • Daniel Boon

            John, you’re probably a nice bloke .. but in the event you’re not, it, EST ( Environmentally Sustainable Technologies), has got Everything to do with the environment … what some politician pulls out of their arse as a ‘solution’ (Energy Security Target / EST), to appease their sponsors and mull over donations before deciding policy

  • john

    As per usual there is no decision from the federal government it will be 6 weeks before parliament sets again.
    I do not expect any decision then either i would bet they decide to have a study done to kick the can down the road.
    Meanwhile the states will just put in solar and storage and hopefully concentrated solar and storage and the more the better.

  • Hettie

    Note to Prime Minister and Cabinet.
    You can bluster and obfuscate and bicker forever, but you will not stop renewable energy and storage from taking over the entirety of Australia’s electricity supply within a very few years.
    This is one siruation where the market is dictating the future, and it’s a future free of coal and gas.
    Coal is DED dead. The exporters of gas a busily killing their golden goose.
    Do you not recognise, you fossil fools, that this is your Kodak moment?
    What is the value to you of promises from the fossil fuel companies of cushy sinecures when you leave Parliament if those companies are bankrupt?
    You would do far better to abandon a moribund, planet destroying industry to its inevitable fate, and embrace the future.
    This change is going ahead in spite of you.
    Get used to it.

    • Tom

      If Kodak was an Australian company they’d still be in business.

      Kodak would have been a generous donor to both sides of the political spectrum, Kodak would have employed politicians upon their departure from politics in good roles, and many talented Kodak cadets would have changed jobs to become senior public servants or even politicians with Kodak’s blessing.

      The government would have imposed a tax (which they would have called a “levy”) on digital photo print kiosks. They would have legislated that any print media has a “negative” of the photo that has been published to prove that it hasn’t been doctored, and that this must be kept for 5 years (similar to the data retention laws). They would have restricted the sales of smart-phones to people who have passed an Australian Federal Police security check, as they could be used as terrorism planning devices. And they would have required Facebook and Instagram to provide the government with metadata details of all pictures posted on their sites.

      In addition, there may even be extra support, such as the “Queensland Flood Levy”, to protect this fantastic Australian company.

      • Hettie

        Pure Gold. Thank you.

      • haha. That was the lead to my story i was writing. And it still will be, but a few things are getting in the way.

      • nakedChimp

        So instead of just Kodak, the whole country goes down the drain.. dang, I come from a place like that. Luckily at the end they just opened the borders and got taken over by the more successful twin from bad times past.

  • If the flawed Draft SA Govt Energy Security Target Regulations hadn’t been delayed, there would have been a strong push by the renewable and storage industries to have them “disallowed” in the upper house of State Parliament. The main problem was the eligibility reference to “real” vs “synthetic” inertia.

    We’ve now been told the new start date for the proposed EST Regs is 1st January 2018, which is after Parliament has finished for the year, so the first opportunity to debate the Regulations will be after the next State election in March 2018. Regardless of who forms the next SA Government next year, the Regs can still be disallowed up until around June 2018. As Giles notes, they may be abandoned before then depending on what happens at the Federal level. SA “going it alone” in response to a failed NEM plays well in the community, provided prices go down, which is no sure thing under the proposed new Regs.

    Mark Parnell MLC, Parliamentary Leader, Greens SA

    • Shane White

      Wouldn’t it be nice to have an emissions reduction target?

    • neroden

      Thank you Mr. Parnell! It’s good to hear from someone who’s actually in the state Parliament.

  • Joe

    When Premier Jay and Treasurer Tom are ready to make their announcement could they please invite Joshie F to come along to the presser and stand shoulder to shoulder like the last time in Adelaide for AGL’s VPP launch. I’d love to hear Jay and Joshie go at it again !

  • Tomas Smith

    We have new alternative source of energy
    Thank you Greg ! 🙂

  • neroden

    I notice that South Australia missed their target date for announcing a winner or winners.