Future Fuels CRC CEO David Norman discusses the techno-economics of reliability and resilience in a renewable world.
Long-duration energy storage (LDES) systems, such as pumped hydro energy storage (PHES) and potentially hydrogen energy storage systems (HESS), are essential for managing and maintaining reliability and resilience as the National Electricity Market (NEM) transitions to a renewables-dominated electricity system. One of Future Fuels CRC’s last research reports before handing over industry research to GIRA (Gas Infrastructure Research Australia) is a comprehensive techno-economic framework of LDES created by the University of Melbourne.
This research considered a variety of factors, including location, availability, and market weather conditions. The full published research is on our website. It provides valuable insights into LDES technologies and their contribution to reliability and resilience.
Suitable geology
Australia does have suitable underground geological formations, particularly depleted gas reservoirs, located near the high-voltage (HV) transmission network for large-scale HESS deployment.
CAPEX
Large-scale HESS may have a capital expenditure up to 30 per cent lower than that of a PHES with equivalent power and energy storage capacities.
Levelised cost of electricity
Under the projected generation, storage and transmission expansion plan in AEMO’s 2024 ISP, research indicates that HESS in strategic locations such as Victoria and southern Queensland may recover their costs within the first 20 years of operation exclusively through participation in the wholesale NEM. The expected increase in price volatility as the NEM becomes more renewables-dominated presents greater opportunities for HESS to maximise revenue by capitalising on high prices that may occur when residual demand is high or during reliability events.
Reliability
In a scenario where Snowy 2.0 and Borumba are present, installing a HESS in Victoria with 500MW and 158 hours of net storage may significantly enhance the reliability of the NEM, particularly in the southern states of Victoria, South Australia, and Tasmania.
Due to their strategic locations, HESS in Otway-Mortlake in Victoria and a Roma-Kogan in Queensland could significantly enhance resilience by maintaining reliability during extended variable renewable energy (VRE) droughts. If a severe VRE drought event similar to that of May 2024 occurs during periods of high residual demand, the NEM may not be resilient. This suggests additional firming and back-up generation should be planned, particularly in Victoria and Queensland.
Variable renewables curtailment
The modelled HESS in this report present opportunities to accommodate more VRE in the NEM that would otherwise be curtailed. An LDES system in Victoria could access VRE from four sub-regions: central South Australia, south-east South Australia, Tasmania and south New South Wales.
Price volatility
In general, LDES helps reduce price volatility by lowering the frequency and magnitude of extremely low and extremely high prices. LDES in strategic locations like Victoria and southern Queensland can reduce price volatility by enhancing reliability, leading to a decreased reliance on expensive demand-side programs to mitigate unserved energy.
This research is a stress-test, using comparable zero-emissions LDES technology case studies and advanced modelling techniques. It shows HESS and PHES can co-exist and have distinct merits when deployed in strategic locations. I encourage you to read the public report on our website.
The knowledge of clean molecules’ competitive and constructive role in LDES is only at its very early stages. This major piece of work is crucial to better advocate that those charged with future energy systems modelling and planning, such as AEMO’s 20-year integrated systems plan, start to consider HESS in the same manner as technologies such long-duration batteries and PHES.
This feature also appears in the July edition of The Australian Pipeliner.
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