Lachlan Blackhall FTSE SMIEEE PhD Be BSc
Head, Battery Storage and Grid Integration Program, The Australian National University
In Australia and since early 2015, battery storage has primarily been installed in residential dwellings alongside solar photovoltaics (PV) generation. These residential batteries typically use lithium based chemistries, although several companies are providing residential battery systems that are based on lead-acid and flow chemistries.
The individual factors driving adoption of residential battery storage are varied but are primarily related to customers addressing the rising cost of electricity. Predictions about the uptake of residential battery storage vary, but have included predictions as high as 1 million residential battery systems by 2020. Progress towards that number have been modest however, and are likely slowed by the still improving economics of residential battery storage.
Alongside the adoption of residential battery storage systems there is also increasing adoption of utility scale battery storage. These batteries are often installed alongside utility scale wind and solar farms around Australia. The most prominent example of a utility scale battery system is the 2017 installation of the 100MW/129MWh Hornsdale Power Reserve (HPR) in South Australia.
Alongside other utility scale battery storage deployments that are occurring around Australia throughout 2018, there is an increasing awareness of the role that utility scale battery storage will play in providing energy security services to the operation of the National Electricity Market (NEM). This has been best demonstrated by HPR which, as of May 2018, has already taken a 55 per cent share in the South Australian frequency and ancillary services market, and lowered prices in that market by 90 per cent.
Although many of the existing and planned utility scale battery systems are based on lithium chemistries, there are battery systems based on other chemistries that offer alternate energy storage and power delivery characteristics. Utility scale battery systems based on vanadium and other flow chemistries are likely to increase in adoption, particularly as prices drop due to increasing global demand for these systems which has been highlighted by recent installations in China.
The opportunities for, and economics of, utility scale battery storage are still being fully investigated, particularly when such systems are collocated with utility scale wind and solar farms. The value of these battery systems will in many cases be driven by the participant categories, operating rules, and available exemptions for market participation as defined by The Australian Energy Market Operator (AEMO).
In between residential and utility scale storage there are also important future opportunities for the wide scale deployment of community battery storage systems (i.e. batteries in the hundreds of kW / kWh). While there have been limited community battery systems installed to date, there are significant opportunities for battery systems of this scale to significantly improve the hosting capacity and integration of high penetration distributed energy resources (DER). Unlocking the potential of community scale battery storage systems does however have some logistic challenges and will require changes to network tariffs to maximise the value for the broader community.
Across theses three categories (residential, community and utility scale) of battery storage systems there are substantial opportunities and it is likely that battery storage will play a crucial role in addressing energy security and reliability issues that the Australian electricity system and market are currently grappling with. More broadly, battery storage has a vital role to play in addressing the significant challenges surrounding the much-discussed energy trilemma.