Batteries have been available and commonplace since the 19th century but it’s only in recent years, and with the parallel development of battery technology and renewable energy, that the potential for large-scale batteries to solve a myriad of global energy problems was truly understood.
Here in Australia, innovative grid scale batteries have been changing the energy landscape. Tesla made international news back in 2017 when they built the world’s largest lithium-ion battery at the Hornsdale Wind farm in the heart of South Australia. This big battery and the multitude of subsequent large-scale battery projects in NSW and Victoria will be key drivers to ensuring the long term stability of the grid.
AEMO’s own analysis in our recent Draft ISP forecasted that more than 30 gigawatts (GW) of large-scale renewable energy is needed to replace coal-fired generation by 2040, with 63 per cent of Australia’s coal-fired generation set to retire by then. The report added that up to 21 GW of new dispatchable resources are needed to back up renewables, in the form of utility-scale pumped hydro or battery storage, demand response such as demand-side participation, and distributed batteries participating as virtual power plants.
Going forward, battery storage installations are forecast to reach 5.6 GW by 2036–37, up from a capacity close to zero today. AEMO expects a proportion of new storage to be aggregated and used for price hedging by retailers and provision of ancillary services, further increasing the value streams from innovation and accelerating the rate of uptake.
This forecast is driven by the projected costs of storage falling, and continuing to fall, faster than previously expected. Around 2029–30, growth is projected to reduce as the market is expected to start becoming saturated, with more than 2 GW of storage installed at the end of the period in 2036–37 than forecast in 2016.
This next decade will be a fascinating time for batteries and battery storage, with domestic and foreign expertise, as well as established and start-up entrepreneurship, contributing to this rapid growth and innovation. Watch this space!
For a brief overview of all things batteries check out our podcast on the subject.