Australia’s Green Bank Charges Ahead on Energy Storage
Published by the Natural Resources Defense Fund
Guest post by Bettina Bergoo
Ensuring power reliability in Australia’s wilderness is a challenge for power providers, but the grid is getting a boost from the new technology of giant, energy-storing batteries and financing support from the Clean Energy Finance Corporation, Australia’s green investment bank.
The CEFC has announced it is working with the South Australian government to arrange financing for the accelerated deployment of the country’s largest utility-scale battery storage project. The South Australian government is supporting the 100 megawatt storage project through its recently announced US$115 million Renewable Technology Fund.
South Australian Coast
Image Credit: Pixabay
The massive energy storage project is part of South Australia’s newly released US$550 million energy plan to improve grid reliability and is indicative of a growing wave of interest in energy storage in utility-scale batteries. This market growth is especially timely in South Australia, where batteries will help with grid management and supply problems.
In South Australia, the process for securing a private project developer and constructing the new 100 megawatt battery storage project is on a fast track because the power supply and grid-stabilizing attributes of battery storage are badly needed. The state’s electric grid runs on over 40 percent renewables—one of the highest grid penetrations of renewables in the world, with most being via rooftop solar, which provides intermittent energy supply.
Prime Minister Malcolm Turnbull pointed to renewable energy as a cause of recent rolling blackouts in South Australia, but grid operators rejected this claim, saying that additional means of ensuring grid reliability are needed when transmission and distribution infrastructure is damaged during extreme weather events.
South Australia has a growing track record of leadership in activating Australia’s battery storage market. Just last month, the South Australian city of Adelaide switched on the world’s largest “virtual power plant” that uses the internet to share details of solar panels and battery storage at hundreds of properties across the city. Together, the individual systems owners make up a “virtual” 5 megawatt plant of generation capacity, demonstrating the advantages of using solar and battery storage technologies together.
Energy storage will be critical to South Australia’s future grid—and it’s needed quickly. Improvements must be made by the start of December to avoid further blackouts due to high use of air conditioning during Australia’s intense summer months, and private companies are already vying to be part of the response. In a Twitter exchange with Turnbull, U.S. electric carmaker Elon Musk offered to fix South Australia’s grid reliability issues, prompting responses from other companies touting their technology and speed of deployment.
Like Musk’s Tesla, which has positioned itself to be able to provide large volumes of batteries on short notice, the CEFC has the experience in financing large-scale storage projects to bring projects together quickly. In 2015, it committed US$11.4 million toward a 10.6 megawatt solar plant with six megawatts of battery storage at a copper mine, which at the time was the largest off-grid integrated solar and storage facility in the country.
CEFC’s US$152 million investment in the Energy Efficient Financing Program, a partnership with Australia’s Westpac bank, launched last year, helping small businesses invest in clean energy technologies such as energy storage. And just last month, CEFC announced financing for another “solar with energy storage” project at a gold mine. The construction of that 50 megawatt large-scale solar farm is on an accelerated schedule due to a CEFC-tailored financing arrangement. When completed later this year, the farm will generate enough electricity to power around 26,500 homes.
With flexible financing support provided by CEFC, the Australian energy storage market is poised to grow alongside other clean energy technologies in the years ahead. As stated by CEFC CEO Oliver Yates, “We are confident we can work with speed to contribute to a successful outcome in South Australia. We are also confident we can create a model that can be used in other states as they seek to integrate growing renewable energy capacity into a cleaner, cheaper and reliable energy system.”
The large-scale battery storage market is also growing in the United States to help with supply instability, and U.S.-based green investment banks are also activating energy storage markets in their jurisdictions.
Connecticut Green Bank, for example, was an early investor in providing debt financing for a 15 megawatt fuel cell park that has a 15-year power purchase agreement with a residential electricity provider.
In addition to previous investments in entities providing financing for technologies including energy storage, NY Green Bank recently announced it is providing a US$25 million loan facility to Plug Power, a New York-based designer and manufacturer of fuel cell systems and fueling infrastructure.
The combination of improving energy storage technologies and financial support from green investment banks will continue to support the flow of clean power globally as countries chart their own routes toward a low carbon future.
Read the full article at: https://www.nrdc.org/experts/sarah-dougherty/australias-green-bank-charges-ahead-energy-storage
