Originally published on Forbes.com on April 29, 2021
The electricity system in the UK was its greenest ever on Easter Monday 2021: 76%. The very next day it fell to 45%. Obviously, it varies widely with how much sun is shining and how strongly winds are blowing.
The energy mix on Easter Monday was 39% wind, 21% solar, and 16% nuclear. Gas power plants provided 10% and coal plants provided zilch. Wood-burning biomass was 4%.
But the race to renewables had already been won by a large state with low population in Australia. In October 2020, South Australia’s electricity was carbon-free – for one hour – powered by large-scale wind and solar but also by rooftop solar collectors (one in four houses have rooftop solar in Australia).
What large daily variations in green electricity tell us is that backup supplies are needed for renewables. In the UK, backup is mainly gas-fired power plants.
In the US, reliability of renewables is a concern and it’s important to understand the backup roles played by (1) gas-fired power plants (coal-fired power plants continue to be replaced) and (2) so-called big-batteries that can store more than 100 MW (mega-watts) of power.
In Australia, backups have been coal-fired power plants, but big-batteries are pushing their way in. Are big-batteries the answer? Australia says a resounding yes.
Figure 1. The Big-Battery at Hornsdale Power Reserve. Source: David Box.
South Australia.
South Australia’s transition from coal to renewables is a remarkable story. It was all fossil-fuel power twenty years ago. But in 2020 renewables produced 60% of the state’s electricity – partly because it’s a dry state ideal for wind and solar energies, and partly due to good government policy even though the electricity system was privately owned.
To attract investors, the state government created laws to favor wind farms away from towns and cities. The government helped workers from a coal power plant that was closed find other jobs.
Not everyone was a believer. Electricity prices rose sharply 2014-2018 and many blamed the transition to renewables. But South Australia was still using expensive gas-fired power as renewables beamed up (no cheap gas from a shale-gas revolution in Australia).
A storm hit the state and knocked over several transmission towers. Trip switches turned off the rest of the grid to protect from further damage. The entire state blacked out in 2016, with considerable financial losses. In smelters, melted iron ore solidified without applied heat and was very difficult to extract.
A large enough battery might have provided an electrical impulse to avoid the blackout. The need for backup was clear.
South Australia has 19 wind farms, 3 solar projects, and one big-battery.
The state’s target is 100% carbon-free electricity by 2030.
Predictions are that by 2050 carbon-free electricity could produce five times the state’s energy needs, and the excess could be sold across Australia and even internationally.
Big-battery backups
The first big-battery was at Hornsdale in South Australia, and is owned by a French renewable company called Neoen. It is connected to an adjacent wind farm owned also by Neoen. The battery can power 8,000 houses for 24 hours or more than 30,000 houses for one hour.
The Hornsdale battery was built by Tesla in 2017 and rated at 100 MW of stored electricity – the largest in the world. Since then it has functioned admirably as a backup. In 2020 it was upgraded to 150 MW. It has remained the biggest battery in the world. However, a mega-battery, rated to 300 MW, will be built by Tesla near Melbourne, Victoria, this year.
The economics of the Hornsdale big-battery look impressive. According to one source it cost $200 million. By not having to purchase higher electricity costs, consumers saved $40 million in 2018, and $116 million in 2019. The big-battery has almost paid for itself.
Giles Parkinson weighs in
Parkinson is founder of Renew Economy, a website for clean energy and analysis in Australia.
Australia has made strides in big-battery technology since the state-wide blackout of 2016 in South Australia.
- The Hornsdale battery was built after the storm of 2016 led to a statewide blackout. Why was battery storage chosen ahead of natural gas power plants? And did the battery solve the problem?
GP: Battery storage was chosen because the issue was not a shortage of gas power plants – south Australia has had plenty of those. It was its ability to be built quickly and to provide emergency back-up, particularly in fast frequency response which might have helped prevent the 2016 blackout.
- Why was the battery extension built to 150 MW. Has electricity savings paid back the cost?
GP: The battery was expanded because it allowed Hornsdale to be able to test a provision of synthetic inertia, another key grid security need. The savings have been significant. Neoen, the investor, has already got its money back in three years, and the savings to consumers are considered to be a multiple of its original cost.
- Big-batteries are popping up all over Australia. Can you say approximately how many have been announced?
GP: Six large grid-scale batteries are operating, another three are complete and await commissioning, at least another half dozen have started construction, and probably more than 20 proposed, and waiting for approvals.
- How are coal companies and oil-gas companies reacting to the spread of renewables and big-batteries within Australia?
GP: The big fossil fuel companies, like AGL, Origin and EnergyAustralia are all announcing huge investments in battery storage, particularly at locations of coal and gas power plants that are likely to close in the coming 5-10 years.
- Is there a groundswell of support for renewables to replace fossil fuels in Australia? (I realize the Australian government hasn’t been supportive of renewables, but are pushing natural gas instead.)
GP: There is a massive groundswell of public support, surveys show overwhelming majority, and one in four homes already has rooftop solar.
- Has the spread of big-batteries and renewables led to lower electricity costs?
GP: Electricity prices (wholesale) are their lowest in years due to the impact of rooftop solar and large-scale renewables, and the small amounts of battery storage. But, like bank interest rates, changes are slow to feed through to retail consumers.
- Giles, you said a couple years ago that new-build costs of renewables + battery were on a par with gas-fired power plants, for two-thirds of the world’s population. This was a remarkable statement. Has it turned out as you forecast, or perhaps even better?
GP: I don’t think there is any doubt of that. The US has the cheapest natural gas, but all the competitive auctions for dispatchable capacity have gone to solar or wind plus batteries, rather than gas power plants. As more wind and solar enter the system, the only place left for gas will be in peaking plants, or open-cycle turbines, which cost even more on a MWh basis. So gas will continue to have some use, until battery storage extends its life as costs continue to come down.
Note that a new CSIRO GenCost report shows that wind and solar are the cheapest electricity generation – even when storage and network costs are added for a 90% renewable grid.
Learnings
If the US embraces Biden’s goals of green electricity and vehicle electrification, a simple supply-demand equation leads to oil and gas production falling by 24-32% by the years 2035-2040. This would be a serious changeover and behooves US governments as well as fossil energy companies to consider what South Australia has learned.
According to Renew Economy, to successfully transition from fossil fuels to renewable energies requires several things. First that governments: (1) flex their power to implement policies that provide advantages to renewable companies, (2) respond to any disruptions in the energy market, (3) proactively assist workers and businesses that are being replaced.
The report also recommends setting up nearby transmission lines and related infrastructure before new renewable generators are constructed.
South Australia proves it can be done.