plus Created with Sketch. ! arrow-down arrow-left arrow-right arrow-up Asset 9Asset 7Asset 2 Group 2 Created with Sketch. Rectangle 11 Copy 4 Created with Sketch. Asset 6 close Asset 5 Icon/news/default Asset 20 arrow Created with Sketch. edit Group Created with Sketch. Icon/Learning/Active Icon/Learning/Inactive Shape Asset 10 instagram linkedin Asset 8 Icon/news/default menu send-2 Created with Sketch. Asset 3 pin Asset 14 search share Asset 15Asset 16Asset 19 twitter Asset 11

Energy storage


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

Sixteen large-scale batteries were under construction at the end of 2020, representing more than 595 MW of new capacity. Several other notable utility-scale battery projects were announced in 2020, including the New South Wales Government committing to build four new large-scale batteries under its Emerging Renewables program, AGL's plans to build several big batteries on the sites of its existing fossil fuel power station assets and the Western Australian Government tendering for a 100 MW battery, the first to be built on the state's main grid.

Australian households' enthusiasm for batteries also continued to build in 2020, with 23,796 batteries with a combined capacity of 238 MWh installed during the year. This was an increase on the 22,621 household batteries installed in 2019.

South Australia saw 7152 household batteries installed in 2020, the most in Australia, due to strong uptake of the SA Government's Home Battery Scheme. It was followed by NSW, which installed 6264 household batteries on the back of the NSW Government's long-awaited Empowering Homes battery loan program.

Pumped hydro continued to make steady progress in 2020, with the 2000 MW/350,000 MWh Snowy 2.0 project reaching a number of significant development milestones. These included state and federal environmental approval, which were both fast-tracked as part of the governments' COVID-19 recovery efforts, a $125 million transmission investment by the Clean Energy Finance Corporation and approval of a segment factory, which will manufacture 130,000 concrete tunnel segments for use during construction of the project.

Tasmania's Battery of the Nation project also continued to progress in 2020, with Hydro Tasmania naming Lake Cethana in north-west Tasmania as its first pumped hydro site for the project.

The future of hydro also looks bright in New South Wales after the state government committed $50 million in grants to support the delivery of pumped hydro projects in the state as part of its Electricity Infrastructure Roadmap, the proposed Oven Mountain pumped hydro project was deemed as Critical State Significant Infrastructure by the state government and GE signed an agreement with Walcha Energy to develop a 500 MW pumped hydro project at Dungowan Dam.

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 2021.

    * Source: Green Energy Markets
    Top image credit: Tesla

    Related Content


    Guide to installing a household battery storage system


    Responsible recycling of energy storage batteries