Virtual Transmission: We need more battery storage to lift capacity of existing grid

New transmission is an essential ingredient for a successful energy transition. It helps to access regions with high quality renewable resource (especially wind, which is more location sensitive than solar) and it helps to balance generation between different regions (which increases utilisation and reliability of supply).

However, it also requires substantial investment, takes a long time to deliver and has impacts on regional communities, in addition to its many benefits.

So could we do more with the transmission lines that already exists and or are already being built? A recent article on Renew Economy – Super cheap transmission upgrades – has recently summarised many exciting new Grid Enhancing Technologies (GET).

My article aims to go further and explore the many ways in which batteries can increase the utilisation and capacity of networks without the need for new lines. In other words, this article explores the current and future potential of batteries to deliver ‘virtual transmission lines’.

It is important to note that virtual transmission is no silver bullet. The transmission investments outlined in AEMO’s ISP are likely to be required to meet our growing electricity needs.

That said, virtual transmission solutions may provide a much-needed interim solution to compensate for project delays and to reduce impacts on regional communities as much as possible.

Batteries are already the Swiss army knife of the energy transition. They are essential to help us navigate the energy transition. Virtual transmission is yet another addition to the already big portfolio of solutions that batteries offer.

Virtual transmission creates benefits for consumers, regional communities, and investors. Consumers would pay less for transmission expansions because batteries can deliver additional network capacity cost effectively.

Batteries can also be delivered faster and with lower risks than conventional transmission. Consumers could thus enjoy the benefits of lower cost renewable generation earlier.

Regional communities would also benefit because existing infrastructure could be used to its full potential, reducing the need for new network. Finally, this would also be beneficial for battery investors as it adds yet another revenue stream to batteries, making this essential asset class ever more viable.

Batteries can increase transmission capacity in two ways. They can be co-located with generators, or they can be co-located with demand. 

Figure 1 below summarises how batteries co-located with generation increase transmission utilisation, while batteries co-located with demand increase transmission capacity.

The new Capacity Investment Scheme (CIS) takes this benefit into account in its merit assessment criteria, which include ‘consideration of a project’s impact through reducing congestion/curtailment such that other projects can dispatch additional MWh.’

Far sighted developers are already actively working on proposals to uplift the capacity of the existing and under construction transmission through such investments.

Batteries co-located with generators increase the utilisation of transmission capacity by storing energy at times when the transmission system does not have enough capacity to transport all the generated energy to consumers, e.g. when all solar farms in a renewable energy zone produce concurrently close to their peak output.

By storing energy that would otherwise be spilled (or not valued properly), batteries can then release it later, e.g. during the evening peak when supply might be most scarce (and highly valued).

The first long duration storage (LDS) battery supported in the AEMO Services LDS Tender 1 is the 50 MW, 8 hr Limondale BESS. This battery can store energy from one of the otherwise most curtailed solar farms in the NEM and release it later when other solar farms in the area can’t generate.

Using a model like the one provided in the ‘How to build your own ISP ’ article, one can calculate the additional network hosting capacity a battery can create.

Figure 2 shows that an 8 hr battery, for example, could create the equivalent of its battery capacity in form of additional generation hosting capacity (as long as the battery capacity is less than ~20% of the REZ network capacity).

Batteries co-located with demand increase the effective capacity of the transmission system. In its simplest implementation approach, batteries can discharge when the upstream transmission system is constraint and thus provide additional capacity.

A much more effective way for batteries co-located with demand to unlock transmission capacity are so called System Integrity Protection Scheme (SIPS) batteries.

Good examples are the Victorian Big Battery (VBB), completed in December 2021, and the Waratah Super Battery (WSB), expected to be in service next year. The breakout box ‘How a SIPS battery works’ explains their operation in more detail.

As a rule of thumb, 1 MW of battery capacity with relatively short duration storage, e.g. 30 minutes, can increase the transmission limits by 1 MW, as long as the right conditions exist in the transmission system.

The 250 MW / 125 MWh portion of the VBB reserved for the SIPS service can increase the import capacity from NSW into Victoria under peak demand conditions by up to 250 MW.

The economics of such an uplift can be quite attractive. For example, NSW estimates to spend $1.3 million for each MW of additional network capacity across its REZ, see 2023 Network Infrastructure Strategy.

According to CSIRO’s latest GenCost report, 1 MW of 1 h battery capacity might currently cost $1.0 million, i.e. be more than 20% cheaper than a transmission solution and that is before valuing all the other services the battery could provide and considering future battery cost reductions.

NSW is already using this opportunity to uplift transmission capacity in its existing transmission system, which underpins the investment case of the Waratah Super Battery.

How much more could we get from virtual transmission lines? Much more!

So let’s explore the full potential of batteries providing virtual transmission capacity in the future for the rest of this article. The following ideas are therefore not yet proven at scale, but they are highly attractive and they open up very significant new avenues for unlocking yet more transmission capacity.

The first step on our future virtual transmission journey could be to use Consumer Energy Resources (CER) instead of dedicated large-scale batteries to provide transmission and distribution network uplifts. CER is by definition already close to demand.

Distributed batteries orchestrated through a Virtual Power Plant (VPP) could already provide a whole host of services. They technically also have a response time within minutes, which is needed to provide the current generation of SIPS type services.

The ISP projects 3.7 GW of coordinated CER storage in its Step Change scenario by 2030. This could therefore theoretically be used to unlock several GW of network capacity uplifts. Obviously, we would require a very reliable response mechanism such that the system operator can truly rely on it.

While this is technically feasible, the necessary regulatory mechanisms and commercial incentives are not yet in place. By putting them in place, we could create yet another highly valuable revenue source for CER, which might cover up to half of the cost of a battery if the avoided cost of transmission was counted in full.

Our future virtual transmission journey shouldn’t stop here. The holy grail is to fully utilise transmission lines currently kept in reserve, just in case a fault (i.e. a contingency) happens. This is called N-1 redundancy.

Let’s look at what that means.

Take for example a single circuit 330 kV transmission line. Ignoring all other constraints, it might be able to transmit up to roughly 1,400 MW before it gets too hot. The precise figure depends on many factors including the quality of the conductor, the ambient weather conditions, how the line is built to name but a few.

However, the market operator would not be able to use this full ‘thermal’ capacity of the line because if this circuit failed, there is typically not enough reserve capacity in the system to make up for the resulting loss of 1,400 MW.

How are we managing this issue today? By building a second line with the same capacity, i.e. another 330 kV line to create a double circuit 330 kV line. If the first line failed, the second line could still transmit 1,400 MW. This so-called N-1 redundancy is fundamentally built into the whole transmission system.

Let’s imagine for a minute we have a 1,400 MW battery (i.e. roughly the capacity of the Waratah Super Battery currently under construction). With this battery in reserve and the ability to switch it on really fast (i.e. in less than 0.1 seconds, which is technically feasible) while simultaneously dropping off the generators upstream of the transmission fault, we could theoretically run the double circuit up to its full 2,800 MW capacity instead of limiting it to just 1,400 MW.

While the battery is discharging following a fault, it reduces the load on the remaining transmission system sufficiently to avoid overloading it and it gives AEMO enough time to re-secure the power system within 30 minutes.

In other words a battery with a really fast and reliable control scheme could up to double the capacity of a double circuit transmission line. Now that’s an opportunity worth pursuing.

I know that any power system engineer who has made it to this point will have a long list of practical concerns regarding this approach. We have never really designed and managed a power system in this way.

That is true. But then we haven’t run a large-scale power system on close to 100% renewable energy either. Yet we are working on it for good reasons. I believe we must explore the full potential of virtual transmission now to give us yet another tool to build the energy system of the future.

Break out box: How a SIPS battery works

The current generation of SIPS batteries (e.g. VBB and WSB) achieves their transmission uplift by exploiting the difference between the continuous and short-term thermal ratings of a line.

The maximum amount of power that can be transmitted through a power line is called a thermal rating because transmission lines get hot when power flows through them. When a line gets too hot, it sags too much and starts to pose a safety risk.

The market operator AEMO avoids this by limiting excessive power flows. However for shorter periods of time, say 5- or 15-minutes, lines can often be safely run at higher capacity.

The difference between the continuous and the 5- or 15-minute thermal rating can be accessed through a SIPS scheme.

Assume the transmission system after a critical fault has a continuous rating of X MW and a 15-minute rating of X+Y MY. Without a SIPS system, AEMO can only operate the system up to X MW because if a fault occurred the remaining system must not get overloaded.

However with a SIPS system, AEMO can operate the system up to X+Y MW because if a fault occurs, the SIPS system automatically discharges the battery to take Y MW of load off the transmission system, which brings its total load down to a safe X MW.

The discharge time of the battery needs to be long enough to allow AEMO to reconfigure the system into a secure state. The net effect is that the SIPS system has effectively increased the transmission capacity that AEMO can utilise by Y MW.