Independent Review into the Future Security of the National Electricity Market Blueprint for the Future, Jun 2017

8.3 Energy storage technologies

Electricity cannot be stored in its own right – it must be consumed as it is generated. However, electricity can be converted into other forms of energy that can be stored, such as the chemical energy stored in batteries.

Energy storage technologies can provide solutions to many of the reliability and security challenges facing the NEM as it transitions to a more variable, non-synchronous and distributed generation mix. From a reliability perspective, electricity can be stored at times when electricity is cheap and supply is high, including when excess electricity is being produced by variable renewable electricity (VRE) generators. It is then discharged at times of peak demand, or times of low supply from VRE generators. Storage technologies can also support power system security, by storing or discharging energy in a way that provides services such as frequency control (including ‘fast frequency response’) and voltage control.

The amount of energy that can be stored, and the efficiency losses associated with storage, differs across technologies (see Figure 8.1 for a comparison of some energy storage technologies). Some technologies, such as pumped hydro, have the capacity to store large amounts of energy (multiple GWh), while others, such as batteries, can store small to medium amounts of energy (hundreds of kWh or MWh). The rate that each system can discharge its energy is the power. Depending on the requirement, different combinations of power (MW) and energy (MWh) can be implemented. With current technology, no single storage medium has the characteristics to meet all the requirements for energy that the grid demands. A mix of storage solutions will likely be required to address all applications.

Figure 8.1: Energy storage technologies⁴⁴²

Batteries

Batteries operate as energy storage devices that, when required, convert chemical energy into electrical energy. There are a large range of battery types based on different physical designs and chemistries such as lead-acid, nickel metal hydride, lithium ion and flow batteries, such as zinc-bromide. The characteristics of each type vary in terms of their power density (power to weight), voltage, allowable charge and discharge rates, cycle life and efficiency.

A substantial advantage of batteries is their scalability. They can be deployed from household scale (kWh) up to grid-scale (MWh and GWh), and can also be packaged for off-grid use by household, remote area, and commercial consumers. Another advantage is their rapidly falling prices and increasing availability.

The use of batteries is enhanced by their relatively fast discharge time, particularly when compared with large pumped hydro and thermal storage. This also means that when coupled with appropriate power conversion electronics, batteries are capable of providing a fast frequency response (FFR) service to support power system security. In Great Britain, the system operator has procured 200 MW of FFR from large-scale battery storage.⁴⁴³

A disadvantage of batteries is their relatively limited life, which is in most cases less than 15 years. Some batteries are made from hazardous materials, making disposal and recycling difficult. Batteries are also sensitive to climatic conditions and require cooling in hot environments.⁴⁴⁴

Lithium ion batteries are highly flexible, with lower weight and volume than other technologies. Lithium ion batteries are being deployed for applications such as electric vehicles and grid power quality. Lithium ion batteries typically have high round-trip efficiency, between 85 to 98 per cent, with a typical discharge time from seconds to hours, but energy can be stored for longer periods.⁴⁴⁵ They also have a very long lifetime compared to other battery technologies, with 5,000 or more charge cycles.⁴⁴⁶

The potential for batteries to become widespread in Australia depends both on ongoing innovation in technology and changes to market mechanisms to reward investment. Regulatory reform could assist in rewarding consumers for additional services provided by battery storage.⁴⁴⁷ As discussed in Chapter 6, new approaches to aggregate and coordinate the efficient use of thousands of small-scale battery storage systems will be needed to derive the full value of the various services they can provide.

Pumped hydro

Pumped hydro storage systems operate by pumping water from a storage reservoir at a lower elevation to a storage reservoir at a higher elevation, and later releasing it through turbines to generate electricity. They can be developed off-river using existing or purpose-built reservoirs.

Pumped hydro storage systems are the most mature electrical energy storage systems available. They are also the largest, capable of operating at hundreds of MW or even GW power levels for six hours or more.⁴⁴⁸ They are dispatchable with rapid response times, which means they are well placed to balance electricity demand and provide backup for VRE generation. This means they can help VRE generators to meet their Generator Reliability Obligation. Because pumped hydro is synchronous, it can also provide essential security services, including frequency response, voltage control and black start services.

The round-trip efficiency of pumped hydro is relatively high, typically in the range of 70 to 85 per cent.⁴⁴⁹ Evaporative losses are the main cause of reduced efficiency (the extent of this varies according to local climate).

Pumped hydro is also cost effective. Facilities can pump water to the higher reservoir when prices are low and supply it when they are high, such as in response to demand spikes. This may also moderate prices in the wholesale market.

There are already pumped hydro storage systems in Australia, including a 600 MW system at Tumut 3 Power Station in NSW and a 500 MW system at Wivenhoe Power Station in Queensland.⁴⁵⁰

ARENA has funded a project to assess the potential for additional pumped hydro storage on a large-scale, including the potential for pumped hydro to help complement VRE generators. The project will produce an atlas of prospective sites in Australia.⁴⁵¹

In March 2017, the Australian Government announced a study to assess whether it is viable for the existing Snowy Mountains Scheme to be extended to include up to 2,000 MW of large-scale pumped hydro storage capacity. It would connect two reservoirs with an underground tunnel and generation and pumping capacity. There would be little net additional use of water.⁴⁵²

Hydrogen

Hydrogen is a secondary fuel, that when produced using renewable primary energy sources or using coal or natural gas as the source and applying CCS to the associated CO₂ emissions, can provide a low emissions alternative to conventional fuels for vehicles, space heating or power generation.

While Australia’s domestic market for hydrogen in vehicles is small, the use of hydrogen is increasing in countries such as Japan, South Korea and Europe, although at a far lower rate than the uptake of battery electric vehicles. Japan has developed a roadmap for hydrogen and Japanese businesses are looking at Australian coal resources to supply that hydrogen.⁴⁵³ Projects being developed around the world for hydrogen supply to Japan include renewable-based hydrogen from solar, hydro, geothermal and wind power electrolysis of water as well as through gasification of natural gas and coal (with CCS).

Traditionally, transportation and storage of hydrogen has been a challenge as its low density at ambient temperature means it typically requires high-pressure storage and transport facilities.

Converting hydrogen into ammonia for transportation provides one solution to the transport challenge. Ammonia can be stored and transported either as a liquid under modest pressure, or as a gas at ambient temperatures. Worldwide, the shipping and distribution of ammonia is a mature industry. However, a large amount of energy is lost during the process of converting hydrogen to ammonia for transport, and then back to hydrogen at the point of use. The conversion process reduces the overall efficiency of hydrogen as an energy source. If the original source of electricity is inexpensive or excess renewable energy, this efficiency loss becomes less of a barrier, particularly if the end-use of the hydrogen is for high value purposes, such as a zero emission transportation fuel used in either fuel cell vehicles or direct combustion.

In Australia, there are technologies under development that increase the practicality of storage, transport and conversion of hydrogen from ammonia. CSIRO has recently announced a new metal membrane technology that can be used to separate ammonia into hydrogen and other components at the point of use. The technology could provide an opportunity to increase the use of hydrogen in Australia and to export Australian renewable energy to the world. Associated initiatives include the direct use of ammonia as a fuel in stationary energy systems, or potentially large scale transport applications such as ships and locomotives, using ammonia fired turbines, high temperature fuel cells, or direct combustion engines. The South Australian Government announced in March 2017 it will investigate hydrogen projects through its $150 million battery storage and renewable technology fund,⁴⁵⁴ and the Panel understands ARENA is also exploring the potential of hydrogen.

Another application for hydrogen is to replace or augment methane (natural gas) for residential, commercial and industrial space heating. The city of Leeds in the UK is investigating this possibility. If the use of hydrogen for space heating can be successfully scaled up and the hydrogen is produced from renewable primary energy sources, there would be substantial potential to reduce emissions from heating buildings.

Existing gas infrastructure can tolerate approximately 10 per cent hydrogen content without requiring pipeline or burner upgrades, which would be an effective and relatively low cost way of decarbonising the gas network, albeit only a little.

Concentrated solar power and thermal storage

Concentrated solar power uses large arrays of mirrors (heliostats) to concentrate sunlight onto a ‘receiver’ where heat energy is collected. Once collected, a range of technologies can be used to store the energy. Thermal storage is the predominant technology currently used. It operates by heating a fluid (molten salt or other heat transfer medium) with the energy from the concentrated solar power array. The energy is stored by maintaining the fluid at a high temperature, and can be released when needed to make steam to run a synchronous generator.⁴⁵⁵

There are various types of thermal storage technologies, having characteristics to suit different applications. The power storage capacity of thermal storage systems can be very large, with the biggest operating solar plant being the Ivanpah plant in California that has a peak operating capacity of 377 MW. Storage discharge rates range from hours to days.⁴⁵⁶

There are currently no commercial scale concentrated solar power plants in Australia. The Australian Government has budgeted up to $110 million for an equity investment, if required, to accelerate and secure delivery of a solar thermal project in Port Augusta, South Australia.⁴⁵⁷

In a submission to the Review, the ANU Solar Thermal Group highlighted the cost-effective integration of electricity generation and energy storage as a key benefit of concentrated solar thermal technology. Advanced turbine systems, such as those utilising supercritical CO₂ as the operating fluid, offer pathways for step change improvements in cost and efficiency for solar thermal generation. Solar thermal technology also has the advantage of being useable in a hybrid system with other types of generation, such as fossil fuels or biomass, increasing the efficiency of the system. In the future, hybrid systems with renewable energy may emerge as an option for transition of existing generation assets or solutions in their own right.

ARENA has requested information on potential solar thermal projects, recognising the technology has the potential to deliver dispatchable energy that could benefit the grid during periods of high demand.⁴⁵⁸ However, even with the value that a dispatchable steam turbine brings to the stability and reliability of the electricity system, solar thermal generation and storage is not yet economically viable.

ARENA is supporting Australian solar thermal research, technology development and demonstration through the Australian Solar Thermal Research Initiative which represents a coordinated program comprising six Australian universities and CSIRO.

Flywheels

Flywheel energy storage systems convert electricity to kinetic energy (the energy of an object in motion), in the form of a large rotating cylinder. When electricity is needed, power electronics use the flywheel’s speed of rotation to release power.⁴⁵⁹

There are different types of flywheel systems, with varying power storage capacities (from multiple kW to tens of MW). Flywheels are capable of achieving a high round-trip efficiency of more than 90 per cent.⁴⁶⁰ The power conversion electronics of a flywheel system can also provide system security services.^{461, 462, 463} A disadvantage of flywheels is that for their size and cost, they store relatively little energy.⁴⁶⁴

There have been four small flywheel energy storage systems (of up to1 MW in capacity) deployed in Australia.⁴⁶⁵

Compressed air energy systems

Compressed air energy storage systems use electricity to compress air (releasing heat in the process), to be stored in underground reservoirs or surface vessels. The energy is released when the compressed air expands and combines with another fuel, typically gas, to drive a synchronous generator.

The main advantage of compressed air energy storage is a high storage capacity (MW-scale). Additionally, it does not produce any hazardous waste, and the heat released can be used for other purposes. However, it has a relatively low round-trip efficiency, of less than 50 per cent, because the compressed air needs to be reheated prior to its expansion.⁴⁶⁶ A higher round-trip efficiency of up to 70 per cent may be achieved through an ‘adiabatic’ process (which uses heat released from the compression process to reheat the compressed air prior to its expansion), but this technology is still under development,⁴⁶⁷ with plans for a demonstration plant to be built in Germany.⁴⁶⁸ Another disadvantage is geographical limitations, including specific geological characteristics and the large footprint required for an underground storage facility.⁴⁶⁹ However, Australia has many sedimentary basins where compressed air energy storage would be technically feasible.

Only two compressed air energy facilities are currently in operation today – one each in Germany and the United States, where compressed air is used to increase the efficiency of gas turbine power plants. These facilities store the compressed air in salt caverns.⁴⁷⁰ The CSIRO notes that “a significant amount of work is required to deploy and demonstrate the technology in Australian conditions before a market can form”.⁴⁷¹