Finkel says Australia can, and should, be world leader in energy storage
A new study led by chief scientist Alan Finkel has underlined Australia’s role as a leader in the household battery storage sector, and says Australia can, and should, be a leader of energy storage of all types, including renewable hydrogen as an export opportunity.
Finkel’s new report Taking Charge: The Energy Storage Opportunity for Australia is a 9-page summary and update of a detailed report on energy storage by the Australian Council of Learned Academies (ACOLA) released in November 2017.
Readers may remember that report highlighted how little additional storage was needed – even with up to 35 per cent to 50 per cent wind and solar in the system, but also how critical it would be to a modern, decarbonised grid. Its conclusions were immediately attacked by conservatives as “eco-evangelism”.
The latest report includes updated data – such as the 21,000 battery storage systems estimated to have been installed in Australian homes in 2017.
More importantly, it includes much detail about the opportunities ahead, and comes at an important time as Australia’s political debate once again resolves, sometimes crazily, around the level of wind and solar that can be incorporated into the grid.
“We are entering an era of rapid technological transformation in electricity generation and usage,” Dr Finkel said in a statement.
“Energy storage technologies can not only help us benefit from the transition but to prosper through the creation of new industries, new jobs and opening up export markets.”
The latest report notes the challenge for policy makers is to put storage at the heart of a smarter electricity grid, and deploy it at a grand scale: “supporting the transition to renewable generation sources, helping to match energy supply to energy demand, and empowering consumers to manage their costs.”
It noted that batteries are modular and can be initially installed as small units then scaled up as needs and funds arise.
“Further, they can be installed close to where they are needed, making the transmission costs either small or non-existent. In some cases, batteries can save investment costs by avoiding the need to upgrade distribution lines in cities,” it noted.
It noted the opportunities for pumped hydro, for Australia’s mineral resources – such as nickel and cobalt – in the coming energy storage boom, and also pointed – in a small chapter titled “sipping sunshine” to the opportunities of exporting “renewable hydrogen” to countries such as Japan and Korea.
“Renewable hydrogen made by using solar or wind electricity to split water into hydrogen and oxygen is a logical choice,” it says.
“The only by-product in production is oxygen. During use, the exact same quantity of oxygen is consumed to produce heat or electricity, and the only by-product is water vapour.
“Japan has made hydrogen a national priority to power heavy industry and drive the hydrogen fuel-cell cars produced by its carmakers such as Toyota and Honda.
“Australia is well positioned to be ‘shipping sunshine’ in the form of exported hydrogen. Hydrogen gas can be cooled to a liquid state or converted to ammonia for shipment by sea.”
Renewable hydrogen has long been seen as a huge opportunity for Australia to use its fantastic wind and solar resource to create a “green LNG” export industry of the same size as the fossil fuel based one now.
However, most money has so far gone into a scheme to create hydrogen from Victoria’s brown coal resources. An astonishing $500 million will be invested to deliver just three tonnes of brown coal hydrogen under a scheme co-sponsored by the Japanese government.
The new Finkel report was welcomed by energy minister Josh Frydenberg, who underlined the government’s commitment, via ARENA, to fund three new large battery storage systems in South Australia and Victoria, and some “small virtual power plants”.
Frydenberg’s press release managed to avoid any mention of the Tesla big battery – which at 100MW/129MWh is the biggest in the world – or Tesla’s proposed 250MW virtual power plant in South Australia, or a smaller one proposed by Sonnen.
The fate of those two VPPs is up in the air as the new Liberal state government works out how it can adopt a Labor policy without looking like that is what it is doing.
Frydenberg has previously ridiculed the Tesla big battery as too small to provide power to the whole grid – a comment about as bright as Treasurer Scott Morrison’s assessment that the battery would be as useful as the Big Banana (pictured above).
In fact, the Tesla big battery at Hornsdale has already significantly reduced prices in the FCAS market in Australia – and captured a large market share, notes the new Finkel report – and caused the market operator to rethink how batteries can be used to further strengthen the grid and ensure there are no supply shortages.
Frydenberg noted the Finkel report highlighted how the cost of batteries is declining as Australia’s technology, manufacturing and market competition is advancing and confirms the critical role energy storage will play in the transformation of Australia’s electricity system.
“As more renewable energy – mainly in the form of solar and wind power – enters our electricity grid, the need for energy storage solutions grows,” Frydenberg said. “This is why the Turnbull Government put energy storage on the agenda – to deliver a more affordable and reliable energy system for Australians.”
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