The Bottom Line

Growth in renewables long-term depends upon growth in storage.

So says this interesting presentation from AGL. Its thesis reflects a prevalent assumption amoung many energy commentators: deployment of storage will “time-shift” or “fill in the gaps” around abundant intermittent renewable generation at a national scale, and consequently render sources such as “baseload gas” and alternative, fully reliable technologies unnecessary.

  • 2050 NEM demand: 200 terawatt hours
  • Rooftop solar: 15 gigawatts
  • Grid-scale renewables: 75 gigawatts
  • Implied battery capacity: 350 gigawatt hours

By apparently examining the required solar and wind capacity addition to meet annual National Electricity Network demand in 2050, an implied battery storage requirment of 350 gigawatt hours was estimated in the presentation. Including new renewable capacity the total the price tag is around $250 billion.

But 350 gigawatt hours probably aren’t enough.

In this seperate analysis focussing just on South Australia, the annual state demand for financial year 2016-2017 was rendered as a duration curve to clearly illustrate the range and duration of levels of demand.

The area beneath this residual demand curve is equal to the period’s demand which was left un-met by solar and wind generation, despite capacity increase.

By assuming considerably more solar and wind capacity, the duration curve is then filled in to simulate demand. All demand can only be met if both the short peak of about 3 gigawatts as well as every hour of remaining residual demand is served from stored power. The result is nearly 1,000 gigawatt hours of necessary storage.

This is just for South Australia, which represented less than 6% of annual demand on the NEM in 2016. Simple extrapolation suggests that AGL’s 350 gigawatt hours are insufficient by orders of magnitude.

But do they really know about “batteries”?

There are several other vital considerations:

  • Batteries – and AGL is specific that this is battery storage – might have economical lifespans of 15 yearsLithium ion will dominate the market and expected cost declines are based on this chemistry, but improvements in performance will be only marginal. Therefore, whatever capacity is installed over the next two or more decades will require complete replacement before the specified 2050 target year. This, of course, goes for solar and wind installations too (25-30 year expected economic lifespans), necessitating that at least the full 90 gigawatts be built.
  • The quoted construction cost for battery storage corresponds to the expected $/kWh cost in 2025 under the Finkel Review modelling of lithium ion battery storage cost declines, implying a multi-year delay prior to large-scale build.
  • For rapid national decarbonisation of energy, or at least electricity, as a climate priority, battery storage-supported renewable energy is presented as the path to the low carbon future. The most recent analysis of lifecycle emissions of renewable/battery supply systems suggests intensities of 110 g for wind and 160 g for solar when supported by lithium ion technology mass produced by established suppliers like South Korea. Is this low enoughChina is expected to dominate battery supply chains and exports in the future.

from Baumann et. al, 2017, Energy Technology, 5(7), 1071-1083

  • It’s way beyond the scope of this article to “lobby” AGL to begin considering nuclear energy, but to put the cost equation in perspective:Hinkley Point C in the UK will be a twin-unit EPR nuclear plant, providing 3.26 gigawatts for an expected cost of £18 billion. It’s habitually used to signify how expensive nuclear energy is to build. Using this design at this price, it would cost $250 billion (Australian) to generate that 200 terawatt hours in 2050 with nuclear energy.The EPR has a single 1.6 gigawatt turbogenerator, and there is likely nowhere this would ever fit on the NEM (currently the largest generators are the 660 megawatt coal-fired units at Bayswater in NSW). At an anticipated $3 billion USD per 570 megawatt plant, NuScale‘s small modular reactor technology is a technically superior option now being mooted for Australia.Such SMRs would conceivably meet demand through 2050 for around $170 billion AUD.They also have a design lifetime of sixty years.

Even with Australia’s vast share of uranium reserves “100% nuclear” is a stretch and no authority is proposing it. The low carbon future will likely be a diverse mix. If you’re going to prognosticate out to mid-century, however, including an energy technology which can last till then is probably a great idea.



5 thoughts on “The Bottom Line

  1. You’d think AGL would be more cautious after terminating their networked home battery trial
    It seems to show that lithium ion is not the right medium for bulk energy storage until they can cheaply recycle most of the materials. Snowy 2 PHES will have a capacity of 350 Gwh a decade from now, a lot of that stored energy via eastern states coal burning. The NEG paper suggested 105 Gwh was needed in the NEM and other blogs (eg Euan Mearns) suggest 500 Gwh or more. I’m not sure if they can always reverse Snowy 2 quickly enough to help SA. Cultana Hills pumped seawater at around 1.5 Gwh will probably never be built given the mothballing of Yanbaru in Japan.

    A 500 MW SMR would be great for Liddell NSW, another for Hazelwood Vic and one for power and desal on Eyre Peninsula SA.

    • If a 1600MW unit is too large for the NEM, which must be close to true, then a single 500MW unit in SA may also be too large.

      There are a few ways to look at this, but in layman’s terms it is reasonable to expect that N+1 generation sources available, when N is the number of the largest sources necessary to meet the load at any instant.

      The rationals is that the “+1” can be called upon if the largest unit fails for any reason.

      Assuming that the Heywood interconnector is running at close to its permitted capacity during system peaks, then even though its capacity is 700MW or more, it won’t be standing idly by.

      That leaves other forms of generation to catch the shortfall.

      Consideration of this quickly could lead to a largest unit size of 350 or so MW, which is also within possibility of an SMR.

      My suggestion to SA would be that they consider a pair of co-located units in the 300 – 350 MW range, with the second planned for commissioning 3 to 5 years after the first, thus also meeting natural load growth.

      Similar discussion in NSW, where there are a dozen units in the 660MW class, might lead to selection of standardised units in the range 350 – 500+ MW, depending on cost and plant layout constraints, maybe even up to 1000MW, although that is well out of SMR territory.

      The generation discussion must move from exclusive focus on “Nuclear Yes/No?” to “Replacement large generators, perhaps nuclear, with total new NEM capacity of >15GW When/Where/How Large?”

      The separate but parallel discussion will be “Energy storage: How much, What cost, When, Where?” – Capacity range 100 to 1000 GWh.

      It is past time for the likes of Get UP! and related to discover the urgency and magnitude of these issues, because Australian political parties seem to be scared to view electricity generation, especially using nuclear power, other than as a wedge issue. Thus the negatives real and imagined are flogged regularly and the positives never get a run in the race.

  2. A minute ago NEM-Watch showed SA generating nearly 1000 MW of gas fired electricity yet the Moomba pipeline dates from 1969, half a century ago. The 5,000 tonnes or so of U308 that Olympic Dam produces every year (at half pace) goes to make large amounts of reliable electricity outside Australia while we play with batteries. Due to grid fears Olympic Dam is installing 30 MW of backup diesel which they supposedly gave up when they connected to the NEM. That diesel is mostly refined in Asia with national imports costing $9.5 bn a year. I think it would be wise for SA not to depend so much on gas, diesel, batteries or interstate imports.

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