Should RET be redesigned to encourage energy storage?

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.

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.