The solar power industry is giving plenty of attention to batteries, and especially lithium-ion battery storage. There is a strong reason for this: batteries can turn photovoltaic systems into controllable energy sources, allowing them to compete directly with power plants fired by fossil fuels. Despite their carbon-free operation and their ability to run with sunlight, conventional PV systems cannot be counted on to provide power on demand because sunshine is not controllable.
Energy storage is nothing new, but previously it had little importance for power companies. In a power grid dominated by fossil fuels, power plants can be counted on to deliver energy on demand as long as their fuel is available, typically coal or natural gas. Hydroelectricity was the first renewable generation technology to gain a significant share of the global market, but it has a key similarity with fossil fuel power plants – controllable generation. In short, there had been no generation technology creating demand for energy storage.
As the cost of solar and wind power plummeted, they emerged as viable energy sources with two key advantages: clean operation and low-cost energy. However, they are still held back by their uncontrollable energy output, and as a result no country can rely 100% on solar panels and wind turbines. That is, unless these technologies are complemented with some form of energy storage, to provide energy on demand when there is no generation.
Globally, the most common form of energy storage used in power networks is pumped-storage hydroelectricity (PSH). In simple terms, a PSH facility is like a normal hydroelectric power plant, but where turbines and generators can spin in reverse as motors and pumps, driving water up into a reservoir. When energy is needed, the system only has to operate normally, while pumping is accomplished with low-cost energy away from peak demand hours.
The issue with PSH is that you cannot scale it down for the needs of homes and most businesses, since its cost per kWh of capacity becomes extremely high. Besides, you need a suitable site where it is easy to set up an elevated reservoir close to a large body of water. On the other hand, lithium-ion batteries have the same attribute that made solar panels successful: a modular design that is scalable for the needs of any project big or small. Therefore, lithium batteries can serve the needs of megawatt-scale solar farms or rooftop solar arrays alike.
The ownership cost of batteries is still high, but is expected to drop by around 30% before 2020. However, electricity rates in Australia are among the highest in the world, and for many homes and businesses, even solar power plus storage is a cheaper option than local energy retailers. Batteries also let Australians save the full price of each kWh generated by a PV system, while local utilities only pay at around one-third of the retail price for energy exported to the grid. In other words, one kWh from a solar array consumed locally saves three times as much as one kWh exported to the power network.
Energy storage systems based on lithium-ion batteries are on the rise in Australia at all project scales. For example, surveys have revealed that most homeowners with solar PV systems are considering the addition of batteries in the near future. Also, the public perception of solar power with batteries is extremely favorable, even considered the solution to Australia’s energy crisis by many citizens.
Businesses are also investing in their own solar power plus storage projects, and we’re not talking about small businesses, but large energy consumers in the mining and manufacturing sectors. For example, GMA Garnet are deploying a 3-MW solar power and battery storage system for their main mining operation in West Australia. Perhaps the most impressive of these projects is a 1,000MW hybrid system that was announced for the Whyalla steelworks in October 2017, which will combine solar power with hydroelectricity and battery storage, complemented with smart energy management technology at many steel processing facilities.
The Australian military are also switching to clean power; the HMAS Stirling naval base is being equipped with a 2-MW microgrid that combines solar power, battery storage, and the experimental technology of tidal power.
Two utility-scale battery systems are being deployed in South Australia, including the largest in the world as of late 2017: a 100-MW and 129-MWh colossus by Tesla, which will coordinate its operation with a 100-MW wind farm in Hornsdale. This battery effectively turns the nearby wind farm into a dispatchable energy source.
If the projects under development are successful, it would be a major milestone for the Australian electric sector. The country has an abundance of natural resources, making it an attractive hub for global manufacturing companies. In addition, Australia gets enough sunshine to meet its energy demand 10,000 times, providing a huge expansion opportunity for solar power with battery storage. The technology achieves two goals simultaneously: reducing the emissions of the Australian energy sector, and meeting a growing demand for electricity.
The government’s recent policy changes, covered in the National Energy Guarantee (NEG), require Australian utilities to keep certain levels of controllable generation capacity available. Although this benefits coal and natural gas, it can also drive growth in utility-scale battery systems, especially if the success of projects currently under development draws the attention of investors.
Solar power with battery storage can achieve synergy with emerging information technologies and automation. Australia has high wages, which means it is unlikely to attract manufacturing companies that depend mostly on human labour. However, companies that use extensive automation focus more on access to capital and energy costs. The Australian banking system has some of the lowest interest rates in the world, and affordable solar power complemented with large batteries systems can provide the missing link to start a high-tech manufacturing boom in Australia.