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Should RET be redesigned to encourage energy storage?

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While the main debate around the renewable energy target appears to be based around myths and misconceptions around costs, climate science and political ideology – as well as a hatred of wind turbines – there have actually been some constructive suggestions going on in the background.

One has been about adjusting the RET to ensure that technologies other than wind are brought into production. Some, like independent Senator Nick Xenophon (his vote could be influential) have favoured “banding” to encourage what he calls “baseload renweables” such as geothermal and wave energy to be encouraged.

That is partly driven by Xenophon’s stated aversion to wind energy, and the idea of reserving capacity for some technologies has been criticized because it will likely push up costs of the RET, and may be impractical anyway because some of those technologies are not ready to be deployed at scale.

Energy-Storage-image_310_180

One interesting idea, however, has come from Spanish renewable group FRV, which has suggested a form of banding, or a “multiplier,” to encourage the development of energy storage.

Multipliers are used in countries such as the UK, where Australian company Carnegie Wave Energy expects to get five such certificates for every MWh of electricity produced from a proposed wave energy installation.

FRV suggests a multiplier could be applied to encourage generation when and where it is needed most, such as during peak demand and shoulder periods.

This would address concerns that much wind energy, for instance, is being delivered in off peak periods.

FRV says such a multiplier would benefit any project or technology that could deliver energy at times of high demand.

“If structured correctly it has great potential to ‘pull’ the implementation of storage in conjunctions with a range of renewable technologies, including wind,” it writes in its submission.

“This has considerable financial benefit through avoided network investment and avoided peak and intermediate generation requirements.”

It would, of course, have the added benefit to the likes of FRV of favouring solar, which delivers mostly in shoulder and peak periods.

FRV is currently completing the 20MW Royalla solar farm in the ACT, built after winning the Territory’s reverse auction last year, and is also looking to build a 56MW solar project at Moree with Pacific Hydro and bring that into production next year.

FRV believes that, given the anticipated cost falls in solar, around 40 per cent of the RET target could come from solar farms.

FRV also argues that solar can be installed anywhere where these is a load or acceptable grid connection, thereby helping to reduce transmission and distribution losses, which can amount to 10 per cent or more.

It notes that distributed energy can defer or remove the need for grid upgrades. Given that the largest single driver of retail electricity prices increases has been network upgrades, this is an important contribution.  

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  • coomadoug

    What will happen is a change in the electricity market. At the moment the market is designed around secrecy and ignorance of customer needs. Uncertainty and lack of awareness is used to push up the cost of many contractual arrangements. Market peaks include a high percentage of energy that doesnt need to be provided at that time. There is no incentive to optimise the process and no motivation to exchange information. The future includes micro management of load side and this requires a different approach that rewards efficiency and close communication betwee customer and supply.

  • Nick Pyner

    Sounds a good idea, but the Clean Energy Regulator needs to be a lot less blinkered than the ORER was about anything that was not in the book. Ground sourced heat pumps and waste heat recovery from grey water were not entertained, and the current situation is not likely to improve matters.

  • suthnsun

    Of course it is really well past time to slap a meaningful emissions intensity constraint on generators i.e 300g kwh. In that context they would all have the full suite of low emissions intensity supply at their disposal eg various types of novel storage,(gravity mass, heat pumps, molten salt etc) or HVDC line from solar and/ or wind in WA to supply NEM. All generators should be obliged to invest in their take on the future within such an overriding regulatory constraint.

  • Winston

    “FRV suggests a multiplier could be applied to encourage generation when and where it is needed most, such as during peak demand and shoulder periods.”

    There is already a multiplier for that. It’s the wholesale energy price. In the solar-wind comparison it amounts to (crass generalisation) a 26% solar capacity factor being equivalent to a 30% wind capacity factor. It’s a lot easier to find a 30% wind CF than it is to find a 26% solar CF.

    This article headlines re-designing the RET to encourage storage. But then doesn’t discuss storage. Storage would be fantastic – but it costs a bomb. Without due consideration for that mentioning storage is fluff.

    Where I live, I pay almost 10c per kWh for the grid. 7c of that goes to the distribution network, a little over 1c goes to the transmission network, and the rest to admin and what-not. The point is that the 7c for distribution isn’t about putting in large capacity wires, it’s about the number of wires that have to be put in. Unless there’s some kind of mass exodus from the grid, that figure can’t be changed with schemes that try to distribute energy. In many ways it may make it worse by shifting the need for control and management systems off the transmission system onto the distribution system, where they’ll multiply in number. The 1c I pay for the transmission system seems OK to me for a whopping high voltage high capacity high reliability grid.

    I did a little calculation. Most of my (fairly modest) consumption is during peak. If I could somehow move all of that consumption into the early hours of the morning, I could save myself $465 per year on my power bill, by changing my network tariff and energy cost to a time-of-use basis (I have a smart meter, but I don’t use its powers). I could move all of my consumption using a storage device of suitable capacity. If the batteries were going to last 10 years (!), then it would need to cost at most $4,650 just to break even (escalating prices aside). Currently one of the neat little boxes made by Tesla in the US would set me back about $15k to get the capacity I need (according to here: https://www.greentechmedia.com/articles/read/the-numbers-behind-tesla-and-solarcitys-solar-home-energy-storage-play). Not that I can buy that kind of thing here.

    The network people have priced the benefit they see from flattening the peak, and folded it into a tariff for me. The storage people have come up with a device to let me take advantage of it. The only problem is that it’s going to cost me 3 times more to store than to put capacity in the wires. Until those numbers converge a little bit, no amount of incentives is going to help (unless you count all the jobs it will create for shady storage installers).

    On the upside, if you’re in the country without a grid connection and your network provider tries to stiff you $10k for it, then storage is likely to quite soon be an affordable alternative.