Battery investment has been mishandled by Coalition governments. Fortunately, there are plenty of small-scale options available.
Champions of coal-fired power generation persist with their argument that renewables are useless when the sun doesn’t shine and the wind doesn’t blow. But as climate and energy minister Chris Bowen pointed out last week, it doesn’t rain all the time, yet we’ve figured out a way to store water.
The ancient Egyptians came up with the idea of dams and Monty Python’s Judean People’s Liberation Front grudgingly conceded that the Romans invented aqueducts. Who knows, maybe we can work out how to store electricity generated from the sun and the wind?
The Energy Security Board has backed https://www.afr.com/companies/energy/tension-over-energy-crisis-plan-as-esb-backs-coal-and-gas-20220619-p5ausx the inclusion of coal and gas in a so-called capacity mechanism to reduce the risk of blackouts in the evenings when electricity demand is high and to cover coal-fired generator breakdowns and their scheduled maintenance.
The risk of evening blackouts can be explained in part by a lack of investment in storage. More storage will not remove the risk of blackouts, but it will help.
Many of us predicted the problems now being encountered, my warnings of “a looming crisis” expressed in the Financial Review back in December 2019 https://www.afr.com/policy/energy-and-climate/untying-the-energy-policy-knot-20191202-p53g04 Among the problems I expressly identified back then were:
ageing coal-fired power stations;
a critical shortage of firming capacity including storage;
a predicted delay in the start date of Snowy 2.0 from late-2024 to at least 2027;
a grid that was in the wrong place to feed in renewables; and
unpredictable policy interventions.
Private investment in storage, such as pumped hydro on the Shoalhaven River, has been chilled by a Snowy 2.0 colussus that was never going to arrive on schedule – despite the telephone call I received from Snowy Hydro after my Financial Review column appeared, telling me I was wrong.
I was indeed wrong, the Financial Review earlier this month https://www.afr.com/companies/energy/shock-snowy-2-0-delay-pressures-states-to-compromise-on-gas-coal-20220609-p5askx revealing the revised start date was not my predicted 2027 but 2028.
Gas-fired power stations are being used for peaking purposes but are not well suited to extended hours of generation owing to their high fuel costs.
Nor can coal-fired power stations be readily ramped up and back down every day and night. They have been designed to go like the clappers. Ramping shortens their useful lives. Like gas generators, coal-fired generation has high fuel costs – exacerbated by the war in Ukraine.
Malcolm Turnbull’s National Energy Guarantee would have brought private-sector storage onstream, but his political enemies weaponised it to depose him, the Morrison government quickly abandoning it.
To make matters worse, prospective private investors in storage were acutely aware that they might be competing against a project favoured by the Morrison government’s Underwriting New Generation Investments program.
The Morrison government received 66 expressions of interest for underwriting, shortlisted 12 and selected two before the program was placed on the National Audit Office’s list for scrutiny. No underwritten projects have proceeded but non-subsidised projects have been frozen out.
We are left with ageing coal-fired power stations, renewable energy sources that aren’t connected to the grid and a dearth of storage.
With up to one-third of existing coal-fired capacity offline in recent weeks from scheduled and unscheduled outages, new coal-fired generation will not be part of the solution to Australia’s energy woes.
The Albanese government’s Rewiring the Nation policy is designed to connect more renewable energy sources to the grid.
Big batteries can be part of meeting the storage challenge. But in the near term, supply-chain disruptions have constrained the availability of new big batteries in Australia.
Other solutions to the storage problem are available. The Albanese government has committed to the rollout of community batteries https://www.afr.com/policy/economy/solar-and-storage-are-the-answers-20210405-p57ghv which are around the size of a shipping container, to enable rooftop solar households to discharge excess power into the grid during the daytime for storage and use in evenings.
Fortunately we already have lots of mobile community batteries and many more are on the way. They are in electric vehicles, powerful enough to tow your boat and they pose no threat to the great Aussie weekend.
Electric vehicles can be charged at the rapidly increasing number of fast-charging stations at shopping centres and workplaces.
Owners of electric vehicles will be able to charge up during the day when the sun is shining and the wind is blowing and discharge at home for evening usage – with the excess going into the grid via community batteries, earning households a bit of extra income.
In fact, private electricity distributors need not wait for the government to fund community batteries; they can roll them out without delay and are doing so.
At the same time as Anthony Albanese and Chris Bowen released the community batteries policy, they also announced a policy to accelerate the penetration of electric vehicles.
Electric vehicles won’t provide the baseload power to replace Australia’s ageing coal-fired power stations, but in tandem with community batteries they will help keep the lights, heaters and air conditioners on when the sun doesn’t shine and the wind doesn’t blow.
If the ancient Egyptians can give us dams and the ancient Romans can invent aqueducts, surely modern civilisation can bequeath current and future generations the storage of renewable power.
Craig Emerson is managing director of Emerson Economics. He is director of the APEC Study Centre at RMIT University, visiting fellow at the ANU and adjunct professor at Victoria University’s College of Business.