Energy storage |
Lucrative and enduring role for batteries in Australia
New forecasts from Cornwall Insight Australia reveal a lucrative and enduring role in Australia for batteries in the recently launched Very Fast Frequency Control Ancillary Services (VF FCAS) markets.
The price forecasts show participants in the Raise-1 market are predicted to make an average of $9.64/MW/h out to 2026 and $10.95/MW/h in the Lower 1-second. This compares very favourably with other markets, currently forecast to make less than a dollar/MW/h.
Even as prices stabilise in the long run, batteries are expected to see sustained gains, averaging around $5.5/MW/h over the 20-year forecasts. The VF FCAS markets are designed to ensure grid stability by responding to rapid frequency fluctuations.
Green light for Liddell battery
AGL Energy Limited (AGL) announced on 19 December that it had reached a positive final investment decision (FID) on the 500 MW, two- hour duration, grid scale Liddell battery to be located at AGL’s Hunter Energy Hub in NSW. Construction work for the battery is expected to begin in early 2024, with the start of operation targeted for mid-2026. The expected asset life of the battery is 20 years. The total construction cost of this grid forming battery facility is estimated to be about $750 million. The project will be supported by both a $35 million grant awarded by the Australian Renewable Energy Agency (ARENA) as part of its Advancing Renewables Program and a Long-Term Energy Service Agreement (LTESA), arranged by AEMO Services on behalf of the NSW Government. The battery will be funded on AGL’s balance sheet, utilising operating cash flows and existing debt facilities including AGL’s recently secured green capex loans.
Fluence Energy (Siemens/AES joint venture) has been selected by AGL as battery provider and EPC contractor. It is Fluence’s biggest project to date in Australia and will use Fluence’s Gridstack™ energy storage technology, with a 5-year service agreement.
The facility will also employ Fluence’s asset performance management software, Nispera™.
Visualisation of the 500 MW/1000 MWh Liddell battery
Maintaining grid stability requires sufficient energy to ensure consistent frequency, especially when unexpected events like power plant outages occur. Traditionally, coal-powered generators provided this inertia, but with coal’s phase-out by 2038, VF FCAS markets and their battery participants are stepping in to fill the gap. As VF FCAS markets were only introduced on 9 October 2023, they are currently in a transition period, meaning they have a low maximum volume requirement (175 MW for Raise-1 and 100 MW for Lower-1). However, this will increase as more participants, including existing batteries, join the market, with over 1 GW of response expected to be available by 2026. The high projected revenues could make participation highly attractive, suggesting a surge in battery involvement.
Ben Tudman, Modelling Manager, Cornwall Insight Australia, said:
“Our forecasts show the future for Very Fast FCAS markets looks bright for batteries. The potential for substantial profits, combined with the vital role batteries play in ensuring grid stability, means they are poised to be a driving force in this revolutionary energy landscape. “With coal slowly fading out of the picture, VF FCAS markets will hopefully offer the contingency needed to maintain the stabilisation of the grid. We are optimistic that the higher prices available will see appetite grow for involvement in the markets, enticing both new players and existing battery assets to actively participate and contribute to these evolving energy markets.”
Shanghai Electric sees global expansion in store
Shanghai Electric reports that the 100 MW/100 MWh REP1&2 energy storage facility in the UK, its first large-scale overseas energy storage project, has entered commercial operation. Also, with the grid connection of Fiskerton II-A, eight PV projects spearheaded by Shanghai Electric in the UK have been completed. The REP1&2 project, located in Kent, is equipped with lithium iron phosphate batteries
produced by the Nantong factory of Gotion New Energy. The project was developed by Pacific Green and purchased by a subsidiary of insurance company Generali earlier this year. The facility is now operated by Shell Energy Europe. Shanghai Electric sees completion of the project as “marking a significant stride for Shanghai Electric in expanding its footprint in the global energy storage market.”
Outlook for EV bidirectional charging (V2X)
A report, co-sponsored by “intelligent power management company”, Eaton, plus Enel X, ev energy, Octopus Energy, The Mobility House, Elli and tiko, sheds light on the regulatory frameworks in 11 European countries for the crucial energy storage resource offered by bidirectional charging (V2X) of electric vehicles. The report, produced by smartEn (Smart Energy Europe) and DNV, offers a deep dive into the ‘enablers and barriers’ to bidirectional charging, examining a range of aspects including electric vehicle and charging station developments, regulatory and market access conditions, as well as grid and system considerations. It underlines the overlooked significance of mobile small-scale energy storage solutions in addressing the grid constraints that electrification and the growth of variable renewable energy resources will bring and affirms the critical role that bidirectional charging can play in Europe’s clean energy transition.
| January/February 2024|
www.modernpowersystems.com
Michael Villa, smartEn Executive Director, stated: “When addressing the increasing energy storage needs for our clean transition we cannot focus only on large utility-scale assets. We lack an EU enabling framework for bidirectional EV charging and the fragmented national rules of some Member States prevent a wide-scale, commercial adoption of V2X. Double taxation of energy remains one of the biggest barriers for bidirectional charging development, while inconsistent market access or the lack of dynamic prices are generally akin to challenges faced by other demand-side flexibility resources.”
In line with a recent estimate of €9.9 billion in benefits that could result from V2X activations across the EU27 by 2030, the smartEn report emphasises that unlocking bidirectional charging’s potential is key to achieving an efficient energy transition relying on all decentralised energy resources, including non- dedicated assets within the transport sector.
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