August 17, 2020 Read More →

Australia’s AGL Energy says battery storage can compete with gas peaker plants

Renew Economy:

Plunging costs and improved performance could see big batteries start to compete with gas plants to provide peaking services, and it’s an opportunity at least one of Australia’s largest energy companies is looking to seize, as the end of coal looms.

AGL Energy’s newly appointed chief operating officer, Markus Brokhof told Renew Economy in an interview that there is a clear business case for big batteries, and added that they were starting to compete with gas peakers on commercial terms to firm up supplies of wind and solar.

Last week, AGL revealed plans for a significant increase in its portfolio of large scale battery systems and will target up to 850MW of new big battery projects by 2024, and a further 350MW of distributed resources. The company sees a growing opportunity in the market for peaking, or firming, infrastructure as the market share of wind and solar grow.

The first of these newly disclosed battery investments is set to be located at the site of the Liddell power station, with up to 500MW in the one location. It will begin with a 150MW initial stage, followed by a similarly sized system, between 100MW and 150MW at the Torrens Island power station site in South Australia. A third battery system is also being considered for a site in Victoria. A precise location has not yet been announced, but co-location at the Loy Yang A power station would be a possibility.

The decision to co-locate batteries at existing operations – where infrastructure was already in place – was a ‘time to market’ question, according to Brokhof, who said that the existing grid connection and network infrastructure provides some of the fastest possible opportunities to get a big battery system up and running.

Brokhof told Renew Economy that AGL would be aiming for one to two hours of battery storage at the sites, with the business case of each battery stacking up irrespective of the ultimate fates of the ageing coal and gas generators at the Liddell and Torrens Island sites, respectively. “We see a high value in batteries with the emergence of renewables given the need for firming infrastructure. There is a clear business case for batteries,” Brokhof said. “Decision on the Liddell battery has nothing to do with plans for the Liddell power station, this project could be built irrespective of the closure of the Liddell power station.”

[Michael Mazengarb]

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