Western Australia – the world’s biggest micro-grid – is putting out an urgent call for new battery storage capacity after a dramatic reassessment of its energy needs in the face of the accelerating green energy transition, emerging green hydrogen demand and coal plant closures.
The latest Electricity Statement of Opportunities – a 10-year supply outlook prepared by the Australian Energy Market Operator – says WA’s main grid, known as the South-West Interconnected System (SWIS), now faces significant supply shortfalls in coming years without new capacity.
It says the SWIS, which is based around the state capital Perth and the more densely populated south-west of the state, is facing a shortfall of 945MW in 2025/26 and around 4,000MW by 2032-33. Just a year ago is was predicting a shortfall of just 303MW by 2031/32.
To address the potential shortfall, the WA government is delaying the closure of one 200MW unit – Muja C at Collie – by six months. It will operate in reserve capacity over the summer of 2024/25 and will operate if needed. It will not delay the overall plans to shut down all Muja units by 2029.
“Putting Unit 6 at Muja in reserve outage mode will allow us to call on the unit, if needed, during periods of high demand,” energy minister Bill Johnston said.
“Western Australia has the most remote stand-alone energy system in the world and the supply of reliable electricity to residents is the highest priority.”
The state also announced a new 100MW/200MWh battery in Kwinana, to be built by Alinta.
AEMO’s WA head Kate Ryan said the rapid energy transition is now fuelling very strong forecast growth in electricity demand, just as the state is transitioning to new, lower-emissions sources of supply and managing the phase out of coal-fired generation.
“This year’s reliability outlook highlights the need for significant and sustained investment in additional capacity, fast-tracking the pipeline of generation, storage and demand-side projects, along with investment in transmission infrastructure, to meet reliability standards,” she said.
Nearly all of that new capacity will come from battery storage. The state-owned Synergy has already built the first big battery on the SWIS – a 100MW/200MWh facility at Kwinana – and has started construction of a 200MW/800MWh battery next door.
French renewable energy developer Neoen has signed a contract with AEMO for a four hour battery – to be sized at 219MW/867MWh at Collie, and has plans to grow this to 1GW and 4GWh.
Synergy has its own plans for a huge gigawatt-scale battery at Collie and elsewhere in the state. On Thursday, Alinta announced its own 100MW and 200MWh big battery near Kwinana.
AEMO is currently negotiating contracts with other big battery developers under the same mechanism it used for the Neoen battery – which requires it to soak up solar in the middle of the day and discharge in the evening peaks. It is seeking up to 830MW of this new peak capacity over the next two years.
The dramatic changes in demand forecasts reflect the growing realisation of the opportunities in green industries and green hydrogen, as the world looks for zero carbon fuel and products.
The 2023 WEM ESOO also incorporates the potential impact of green hydrogen production opportunities in WA across the three demand growth scenarios, reflecting growing interest and efforts to develop hydrogen production for both domestic consumption and export purposes.
Demand growth is being propelled by business electrification, including for alumina refineries and processing of critical minerals, the growth in air-conditioning, the uptake of electric vehicles, and the expansion of industrial loads.
In May this year, the state government released a stunning assessment of the potential demand increases from this accelerating transition, noting it could require more than 50GW of new wind, solar and storage capacity.
Those forecasts are now being factored into the ESOO – a short term supply assessment – with peak demand now expected to grow by 4.4 per cent a year to 6.3GW in 2032 (from 4.25GW now). Last year, peak demand was forecast to grow at just 0.9 per cent a year.
A similar story is told in total “operational consumption”, now forecast to grow at an average annual rate of 5.6 per cent – compared to a forecast fall of 0.4 per cent last year – to 30.3 terawatt hours. It notes that overall demand could triple to 58.9TWh if green hydrogen accelerates.
As the world’s biggest micro-grid – the SWIS has no connections to any other states, or even to the smaller grids that supply the huge mines in the north of the state – it faces a unique challenge.
Those are complicated by problems with its legacy fossil fuel facilities. AEMO notes that inadequate fuel supplies (gas and coal) and prolonged unplanned facility outages have led to the unavailability of coal and gas capacity.
The state run coal plants (930MW) are expected to close by 2029, while the last remaining coal generator at Bluewaters (434MW) is expected to close by 2031.
In turn, this has and will create greater reliance on weather-dependent large-scale wind and solar facilities as well as rooftop PV systems – hence the big push for more battery storage, and possibly pumped hydro in the longer term.
This should total 1.077GW (with varying hours of storage). It will be supplemented by 60MW of wind generation, 34MW of solar generation capacity,120MW of demand side capacity and 57MW of gas or diesel peaking capacity.
It should be noted that this capacity does not reflect the nameplate capacity of various projects, but their “capacity credits”, which reflects their ability to supply power in peak demand periods, for certain periods, and in extreme temperatures.
“If these projects are completed as planned, they could fulfill the additional capacity needed to meet the RCR for 2025-26, thereby addressing reliability challenges and supporting the ongoing energy transition,” AEMO notes.
