Clean energy technologies can provide grid security for less, study finds

Renewables plus batteries are more than capable of offering Australia’s National Energy Market (NEM) the same energy security and reliability as coal and gas generators currently supply, according to new research commissioned by Canberra thinktank, the Australia Institute.

Historically the function of keeping frequency and voltage in the electricity grid within safe limits has been performed by coal and other ‘synchronous’ generators, mostly gas and hydro. Now, with the Energy Security Board redesigning the National Electricity Market with its ‘Post-2025’ proposal to be agreed upon by ministers this year, the Australia Institute is proposing rule changes so these functions are not automatically relegated to fossil fuel-based sectors.

The technical study underpinning the report was carried out by the Victorian Energy Policy Centre with an aim to provide input into the Energy Security Board’s ‘Post-2025’ review, which is currently being concluded.

“The technical study finds that batteries and renewable energy are becoming competitive with conventional sources of inertia and system strength. There is no technical obstacle to them replacing the system security which has been provided by coal and gas generators,” the Australia Institute’s energy policy and regulatory lead, Dan Cass, said in the report.

“The rules governing the provision of inertia and system strength are not fit for purpose for the Post-2025 market. They are a brake on the clean energy transition and undermine state-based Renewable Energy Zones,” he added.

New inverter-based sources are already proving themselves cheaper and better than legacy technologies, Cass said, pointing to a project in North Queensland which had tuned its inverters at four large solar farms for around 4% the cost of a conventional synchronous condenser solution.

“Batteries can deliver far more system security than a coal generator of the same power capacity. When EnergyAustralia announced that the 1,480 MW Yallourn coal power station would close in 2028 it also announced a new 350 MW battery will be built in 2026. The battery is likely to be able to provide at least three times as much inertia as Yallourn, despite a capacity a quarter as large,” Cass noted.

Clean energy resources have traditionally been excluded from providing system security, the report says, but adds this began to shift in 2017. “Regulatory barriers continue to be the key limitation on batteries and renewable energy providing system security,” Cass concludes, however.

The Australia Institute also found there was popular support for using clean energy technologies to support the grid, rather than coal and gas. In March 2021, the institute conducted a national opinion poll of 1040 people which revealed 51% of Australians would prefer to pay for new batteries to keep the grid secure, where 26% prefer to continue to pay coal generators.

The Australia Institute is proposing three key objectives for the Post-2025 redesign: an increase competition, promotion of innovation, and pragmatism in accommodating state policies.

See the Australia Institute’s website for a copy of the full report.