The following article was first published by The Fifth Estate on 28 June 2016:
The renewable energy storage market is heating up, with utilities, solar providers and whole communities among those generating a high level of activity in the field, according to Mary Hendriks, industry executive of the Australian Energy Storage Alliance.
Ms Hendriks said the picture was about more than storing energy. Storage was providing new and smarter models for both business and homeowners to distribute power from their local power generation, and offering utilities new ways to meet the needs of consumers, she said.
“This disruption in the way power is delivered and shared is happening globally, and out of that comes opportunities for new innovative solutions,” she said.
“While Australia is a leader in developing some of these solutions, opportunities may be missed if the Australian energy regulatory systems are slow to adapt or resist these changes.”
She said the already “crowded space” of energy storage was seeing new innovative start-ups enter the fray, and that there were some acquisitions already happening as larger companies identify the sector as an important new market.
At the recent Australian Energy Storage Conference in Sydney, Ms Hendriks said it was evident that a large number of international companies see Australia as a fast-growing market for their products or services.
This was also reflected in the conference speakers, with one-third representing companies who were considering new business in Australia, she said.
One end of the market is being driven by the large uptake of rooftop solar systems in Australia, with over 1.5 million solar systems installed, one of the world’s highest per capita PV installation rates.
Many of these systems export at least some of their power to the grid. However, with the reduction of feed in tariffs commencing at the end of 2016 in NSW, Ms Hendriks said the industry expects more demand for self-consumption, which often means installing storage.
The industry is seeing storage costs come down too.
“Until recently, batteries for the residential or small business user have been a very expensive option that did not stack up in terms of cost in most situations, however this is changing with increasing large scale manufacture of batteries,” Ms Hendriks said.
“Economies of scale from lower cost of production and also from lower balance of system costs are now beginning to happen.
“The first wave of on grid residential users will be the early adopters, and this should have the effect of driving system prices downwards.”
Some of the incentive schemes such as South Australia’s subsidy for installing residential storage and the ACT’s new storage incentive scheme will also have a positive impact on the market, she said.
“While the uptake of energy storage solutions is still measured and cautious, we are at the bottom of the ‘S Curve’ and the only question is when this curve will start on the upswing,” Ms Hendriks said.
“Australia is expected to make strong progress in the residential storage market, while currently lagging in uptake of EV’s compared to Europe and some parts of the US.”
The leaders in terms of large-scale manufacturing are some of the specialists in lithium battery technology, including Tesla in the US, BYD in China and SonnenBatterie (Sonnen) in Germany.
“At the same time, new options for storing power both on grid and off grid have also emerged, with much work being done in the US, and especially in California, pushed along by proactive regulatory incentives.”
Ms Hendriks said commercial energy storage solutions were being implemented widely in the US and that there were many systems now listed on AESA’s Australian portal to the Global Energy Storage Database, including several commercial energy storage projects by Australian companies.
In Australia, there were many remote, mining and island communities currently reliant on diesel that were already implementing a combination of renewable energy plus storage to provide lower-cost, independent energy, she said. Others are in the feasibility assessment stages.
“Some of these projects have been initiated by funding from ARENA, however as these technologies mature, it is expected that many sites will implement storage with only the incentive of lower operational costs,” Ms Hendriks said.
“In remote communities and at fringe of grid, and any area where there are large costs for import of diesel, many solar plus energy storage systems are already close to being commercially viable.”
It’s not all about Tesla batteries either. There are a number of Australian firms developing new technologies, she said.
These players include Ecoult, Redflow and VSun (a Subsidiary of Australian Vanadium), all of which have developed energy storage solutions that are being installed in Australian projects.
“Many others such as GreenSync are developing innovative energy management and sharing solutions, with companies such as Reposit Power leading in developing systems to enable grid-connected solar users to sell power at premium rates,” Ms Hendriks said.
While lithium-ion based batteries are extensively used in electric vehicles because of their high energy density, there are a wide variety of battery chemistries for stationary sites.
“It really is ‘horses for courses’ when it comes to choosing a battery system and will depend on many factors, other than just the price.”
She said the conference speakers represented a wide variety of technologies, including several technologies based on lithium, as well as a patented and recyclable saltwater battery, and solutions involving flow batteries and flywheel technologies.
Low-maintenance flow batteries have been utilised for a variety of situations, including on grid buildings, telecommunications and other remote site applications, Ms Hendriks said.
Vast Solar presented on their project involving a solar thermal energy station and 700 heliostats at Jemalong, NSW. Low-cost thermal energy is providing storage for the power station.
Smart energy systems
Digital technology is also part of the equation, and there is strong growth in the smart energy management space.
“Software is becoming an important element of all systems, from [Home Energy Management] systems, to complex Microgrid management systems, enabling a local area to be isolated and self-functioning during a black-out or during some natural disaster,” Ms Hendriks said.
The power companies are also looking closely at their options, with speakers from AGL, Transgrid, Powercor and Ergon Energy addressing this topic during panel discussions.
“Some of the utilities are certainly looking at how storage will be part of their on-going business models.”
The Australian Energy Market Commission is also engaged in the space, and recently invited comments on proposed changes to the bidding rules that will allow large battery owners to offer “generation” services to cover short peaks using energy stored from PV or during low-price periods.
“The Australian Energy Storage Alliance, and many others from the energy storage industry provided submissions to the AEMC for owners of energy storage to be able to offer services in a market dominated by larger players,” Ms Hendriks said.
“Opening up the markets to these new technologies is one of our current challenges.”
Another challenge is the development of appropriate standards to ensure safety.
“When there are many players in a new and emerging market, it takes time for standards to be introduced,” Ms Hendriks said.
“While it’s a delicate balance of not discouraging innovation while encouraging entrepreneurship, some guidelines are essential and these are now emerging from the various organisations such as the Clean Energy Council through their Energy Storage Roadmap and the associated policy work.”
Standards Australia has also commenced the early stages of consultation in developing a pathway for standards development.
The process builds on CSIRO research into the safety of storage systems, which informed the home energy storage guide released last year by CSIRO and Clean Energy Council.
Export success possible
Ms Hendriks said there was a major opportunity for Australian firms in the storage space to achieve substantial export success, particularly in rapidly developing markets like Africa and India, where renewable energy and storage can resolve energy poverty.
“Energy storage is an area of opportunity for Australian innovation,” she said.
“New and smarter energy storage systems are being launched and these will seriously change the business models of the energy providers, as well as providing lower cost power to consumers.
“Innovation and smart thinking will be essential for Australia to make the leap, developing locally, and being well-positioned to export these new technologies and services to countries with few or undeveloped energy systems.”