In Australia’s Volatile Grid, Batteries Counteract Price Spikes for States and Homes
The grid demands more flexibility, and a cadre of developers are taking the plunge into fast-paced, competitive markets.
-by Julian Spector Author’s note: This week we return to the globetrotting series on the world’s preeminent national storage markets. So far, we’ve covered the United Kingdom, Germany and South Korea.
The grid took center stage in Australia again last month, as a record heat wave and a coal plant failure threatened to topple an electrical system in the midst of a dramatic transition.
The grid didn’t collapse, but high-alert events are becoming regular affairs for the large island nation of roughly 25 million people. Coal plants are shutting down, wind and solar are ramping up, and the shift from baseload to intermittent power has been punctuated by hugely unpopular statewide outages.
Energy storage could play the role of usher on the way to a new, cleaner grid. Or maybe it’s more of a firefighter, putting out conflagrations as they arise on that journey.
The latter better describes Tesla’s Hornsdale project, the largest battery in the world, built in less than 100 days at the behest of South Australia’s leadership.
Hornsdale put Australia on the map for big battery development, but it remains an anomaly in size and process. Since then, grid-scale batteries have become more routine, but it’s still hard to say a proper market exists; major projects thus far have required government support, rather than paying for themselves entirely with contracts or market revenues. That has started to change.
Australia’s world-leading home solar penetration levels have spurred a healthy residential battery business too, as solar customers seek to maximize their investment as generous feed-in tariffs fade away. The commercial storage sector hasn’t seen similarly propulsive growth.
Conditions on the ground make storage more compelling for the Australian grid than almost anywhere else. With the right policies and savvy work by pioneer developers, Australia’s energy storage market could not only become profitable, but an example for the rest of the world.