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Batteries

Energy storage uses a chemical process or a pumped hydro system to store electrical energy so that it can be used at a later time.

Energy storage will dramatically transform the way the world uses energy in the near future. As well as offering more flexible, reliable and efficient energy use for consumers, storage is an effective way to smooth out the supply of variable forms of renewable energy such as solar and wind power. It gives consumers greater control over their power use and enables them to take full advantage of the solar energy that they generate themselves.

Energy storage in Australia

The energy storage sector is starting to pick up momentum, with the 22,661 small-scale batteries installed in 2019 taking Australia's household storage capacity past 1 GWh for the first time. State government schemes are continuing to drive this uptake, with South Australia and Victoria both offering generous subsidies to help households install batteries to reduce their energy costs.

Fifteen large-scale batteries were also under construction at the end of 2019, many of which are co-located with solar and wind farms. This is an increasingly common trend as developers look to maximise returns from their wind and solar projects. In January 2020, Vena Energy announced that it would construct a 100 MW/150 MWh battery at its Wandoan South Solar Farm in Queensland. When completed in mid-2021, the battery will be one of the largest in Australia.

Pumped hydro continued to make progress in 2019, with exploratory work beginning on Snowy 2.0. The massive 2000 MW/350,000 MWh project is expected to create 5000 renewable energy jobs during its lifetime and firm up significant quantities of wind and solar, helping to increase clean energy investment while lowering emissions.

Tasmania's Battery of the Nation also received some good news in December 2019, with TasNetworks finding that the Marinus Link connecting Tasmania with the mainland would be feasible at 1500 MW. This was important to the 2500 MW Battery of the Nation project as its business case depends on Tasmania being able to export excess hydro power to Victoria.

Annual residential energy storage system installations*

    The future of energy storage

    Large-scale energy storage will play an important role in creating a flexible and reliable energy system and supporting the rapid deployment of variable renewable energy sources. While the optimal mix and level of energy storage – from rapid response batteries to long-duration storage such as pumped hydro – will likely change over time and across different jurisdictions, market arrangements do not currently recognise the full value of storage and are therefore not delivering sufficient levels of private investment. Accelerating market reforms that realise the full value and benefits of energy storage should be a priority. Government support for these projects remains critical while the cost of these solutions continues to decrease and the necessary market reform eventuates.

    The integration of batteries into virtual power plants (VPPs) will also play a crucial role in the renewable energy transition by providing better outcomes for consumers and supporting local and regional electricity grids. VPPs involve a network of distributed energy resources, including batteries, buying and selling energy in real-time to reduce electricity prices for participants and provide important services to the grid.

    The Australian Energy Market Commission and the Australian Energy Market Operator have already begun planning for a future in which VPPs play a key role in creating a two-sided national energy market that will enable increased consumer participation. Reforms to market design to allow for further integration of VPPs are expected from the Energy Security Board in 2020.

    * Source: SunWiz, 2020 Battery Market Report, April 2020
    Top image credit: Tesla

    Resources

    Guide to installing a household battery storage system

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    Responsible recycling of energy storage batteries

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