The Bottom Line

Growth in renewables long-term depends upon growth in storage.

So says this interesting presentation from AGL. Its thesis reflects a prevalent assumption amoung many energy commentators: deployment of storage will “time-shift” or “fill in the gaps” around abundant intermittent renewable generation at a national scale, and consequently render sources such as “baseload gas” and alternative, fully reliable technologies unnecessary.

  • 2050 NEM demand: 200 terawatt hours
  • Rooftop solar: 15 gigawatts
  • Grid-scale renewables: 75 gigawatts
  • Implied battery capacity: 350 gigawatt hours

By apparently examining the required solar and wind capacity addition to meet annual National Electricity Network demand in 2050, an implied battery storage requirment of 350 gigawatt hours was estimated in the presentation. Including new renewable capacity the total the price tag is around $250 billion.

But 350 gigawatt hours probably aren’t enough.

In this seperate analysis focussing just on South Australia, the annual state demand for financial year 2016-2017 was rendered as a duration curve to clearly illustrate the range and duration of levels of demand.

The area beneath this residual demand curve is equal to the period’s demand which was left un-met by solar and wind generation, despite capacity increase.

By assuming considerably more solar and wind capacity, the duration curve is then filled in to simulate demand. All demand can only be met if both the short peak of about 3 gigawatts as well as every hour of remaining residual demand is served from stored power. The result is nearly 1,000 gigawatt hours of necessary storage.

This is just for South Australia, which represented less than 6% of annual demand on the NEM in 2016. Simple extrapolation suggests that AGL’s 350 gigawatt hours are insufficient by orders of magnitude.

But do they really know about “batteries”?

There are several other vital considerations:

  • Batteries – and AGL is specific that this is battery storage – might have economical lifespans of 15 yearsLithium ion will dominate the market and expected cost declines are based on this chemistry, but improvements in performance will be only marginal. Therefore, whatever capacity is installed over the next two or more decades will require complete replacement before the specified 2050 target year. This, of course, goes for solar and wind installations too (25-30 year expected economic lifespans), necessitating that at least the full 90 gigawatts be built.
  • The quoted construction cost for battery storage corresponds to the expected $/kWh cost in 2025 under the Finkel Review modelling of lithium ion battery storage cost declines, implying a multi-year delay prior to large-scale build.
  • For rapid national decarbonisation of energy, or at least electricity, as a climate priority, battery storage-supported renewable energy is presented as the path to the low carbon future. The most recent analysis of lifecycle emissions of renewable/battery supply systems suggests intensities of 110 g for wind and 160 g for solar when supported by lithium ion technology mass produced by established suppliers like South Korea. Is this low enoughChina is expected to dominate battery supply chains and exports in the future.

from Baumann et. al, 2017, Energy Technology, 5(7), 1071-1083

  • It’s way beyond the scope of this article to “lobby” AGL to begin considering nuclear energy, but to put the cost equation in perspective:Hinkley Point C in the UK will be a twin-unit EPR nuclear plant, providing 3.26 gigawatts for an expected cost of £18 billion. It’s habitually used to signify how expensive nuclear energy is to build. Using this design at this price, it would cost $250 billion (Australian) to generate that 200 terawatt hours in 2050 with nuclear energy.The EPR has a single 1.6 gigawatt turbogenerator, and there is likely nowhere this would ever fit on the NEM (currently the largest generators are the 660 megawatt coal-fired units at Bayswater in NSW). At an anticipated $3 billion USD per 570 megawatt plant, NuScale‘s small modular reactor technology is a technically superior option now being mooted for Australia.Such SMRs would conceivably meet demand through 2050 for around $170 billion AUD.They also have a design lifetime of sixty years.

Even with Australia’s vast share of uranium reserves “100% nuclear” is a stretch and no authority is proposing it. The low carbon future will likely be a diverse mix. If you’re going to prognosticate out to mid-century, however, including an energy technology which can last till then is probably a great idea.