Chief scientist-commissioned report warns Australia risks missing global growth industry of energy storage because of ongoing policy uncertainty
November 19, 2017 — Australia’s power grid can reach penetrations of 50% renewable energy without a significant requirement for storage to support reliability, according to a new report commissioned by Australia’s chief scientist, Alan Finkel.
While the Turnbull government has made much of the need for storage to increase security and reliability in the national power grid, the new report from the Australian Council of Learned Academies (Acola) says at an aggregated national level, 50% renewables is possible without major investments in storage for reliability purposes.
But the report also points out that the requirement to shore-up network security as power systems decarbonise in accordance with international climate policy commitments is an ongoing task, and that transition means energy storage is now a major global growth industry.
It notes that new energy security requirements create opportunities to expand energy storage capacity for reliability at a lower marginal cost than would otherwise be the case.
It also warns that Australia risks missing out on the benefits of participating in global supply chains because of ongoing uncertainty over energy policy.
The report notes that Australia possesses abundant raw mineral resources for batteries, but could derive greater benefits through value-adding.
As well as focussing on building local manufacturing capacity, the report says Australia’s research and development performance in energy storage technologies is world class, “but would benefit from strategic focus and enhanced collaboration.”
The report points out that Australian energy storage start-ups face challenges, including access to venture capital, which are related to continuing uncertainty over energy and climate policy.
While energy policy has taken a backseat in recent weeks, with the Turnbull government overwhelmed by the dual-citizenship debacle and the so-called “citizenship seven” ruling, and then focussed on the implications of the yes vote on same-sex marriage, the Coalition’s proposed policy fix will be back on the political agenda this week.
Last month, the Turnbull government dumped Finkel’s recommendation for a clean energy target and went with a policy which imposes new reliability and emissions reduction guarantees on energy retailers and large energy users from 2020 – a policy which will encourage new investment in storage.
The energy minister, Josh Frydenberg, is due to meet with his state counterparts later this week to consider whether or not consensus can be reached on the national energy guarantee – but going in to the discussions, some of the Labor states have resisted the proposal on the basis it isn’t sufficiently friendly to renewables.
The federal government needs buy-in from the states, because the new system requires jurisdictions to pass complimentary legislation to set up the national energy guarantee.
The new report by Acola , which assessed various energy storage technologies, also probed public attitudes, with focus groups in two capital cities and with a national survey of 1,015 respondents.
The research suggests Australians favour a more ambitious renewable mix by 2030, particularly solar and wind, with significant energy storage deployed to manage grid security.
It also notes that Australians are deeply concerned by the sharp rise in electricity prices and affordability, and they “hold governments and energy providers directly responsible for the perceived lack of affordability.”
The report by Acola also puts safety standards squarely on the energy policy agenda.
While noting that pumped hydro is, presently, the cheapest way to meet a reliability requirement in the national grid, the report says that a high uptake of battery storage has a potential for significant safety, environmental and social impacts.
Referencing hazards which emerged under Labor’s so-called “pink batts” program in the late 2000’s, which encouraged the uptake of household insulation – the report says the development of safety standards is required given anticipated rapid household uptake of batteries.
“Although a battery storage installation standard is currently being developed, there are concerns that an early incident may have serious ramifications for household deployment, with many referring to the home-insulation program failure,” the report says.
The research also notes that batteries present a future waste management challenge unless the current transition is “planned for and managed appropriately”.
Bruce Godfrey, chair of Acola working group, says the new report “clearly shows the two sides of the coin – that energy storage is an enormous opportunity for Australia but there is work to be done to build consumer confidence”.
Finkel, the chief scientist, and the man who led the review of the national electricity grid, says Australia should grab a major new export industry by developing our technical capacity.
“Given our natural resources and our technical expertise, energy storage could represent a major new export industry for our nation,” Finkel says.
“Energy storage is an opportunity to capitalise on our research strengths, culture of innovation and abundant natural resources.
“We have great advantages in the rapidly expanding field of lithium production and the emerging field of renewable hydrogen with export opportunities to Asia.”