Charging up - energy storage is likely to boom, a new report finds. Photo: Simon O'Dwyer SOD
Energy storage has the potential to have as big as impact on Australia's power sector as the surge in solar photovoltaic (PV) panels, according to a report commissioned by industry lobby group, the Clean Energy Council.
The report, Energy Storage in Australia – Commercial Opportunities, Barriers and Policy Options, compiled by Marchment Hill Consulting, predicts the market for energy storage technologies will climb to as high as 3000 megawatts by 2030, or the equivalent of several coal-fired power stations.
Storage, in the form of new types of lithium-ion and other types of batteries, compressed-air devices, flywheels and other technologies, may be “far more transformative” than the spread of low-cost solar PV, said Tim Sonnreich, strategic policy manager at the Clean Energy Council.
“Whether policy makers like it or not, it's coming,” said Mr Sonnreich said. “The cost-curves are coming down and the costs of alternatives (such as coal and gas) are going up. Storage is becoming a better and better deal.”
The report estimated that current use of energy storage in Australia is about 200-300 megawatts, most of which is either in remote outback sites, such in the Pilbara, or in experimental operations. Current solar PV capacity in Australia is about 2155 megawatts, the Council estimates.
A baseline scenario predicts the price of storage will fall from about $800 to $550 per kilowatt over the period to 2030.
Unlike the solar sector, the storage industry is developing a wide range of possible solutions. “Even if half of all those paths end in dead ends, it still leaves a huge number of technologies and applications that will work,” Mr Sonnreich said.
Crucial for the take-up of the new products, though, will be a regulatory environment that allows operators of storage to capture most of the benefits, such as greater stability of the power networks and less need for peak-load capacity.
Greater use of variable prices will also help, since the wider the tariff differential, the larger the revenue stream for storage owners if they can store cheap power and supply it back to the grid when prices rise.
“The more the price differential is between those high volume and low volume times, the more of an obvious investment market there is,” Mr Sonnreich said.