The key requirements for Australia’s electricity system should be affordable, reliable, and able to help meet national emissions-reduction, Prime Minister Malcolm Turnbull declared in his speech in the National Press Club last February 1. He also stressed that efforts to pursue these goals should be “technology agnostic” – that is, the best solutions should be chosen on merit, regardless of whether they are based on fossil fuels, renewable energy or other technologies.
Turnbull and his government have also correctly identified energy storage as key to supporting high system reliability. Wind and solar are intermittent sources of generation, and while we are getting better at forecasting wind and sunshine on time scales from seconds to weeks, storage is nevertheless necessary to deliver the right balance between supply and demand for high penetration of wind and PV.
Meanwhile, in South Australia renewable energy is already at around 50% – mostly wind and PV – and so this state now has a potential economic opportunity to add energy storage to the grid.
Australia’s fossil fuel fleet is ageing. A good example is the pending closure of the 49-year-old Hazelwood brown coal power station in Victoria’s Latrobe Valley. An ACIL Allen report to the Australian Government lists the technical lifetime of each power station, and shows that two-thirds of Australia’s fossil fuel generation capacity will reach the end of its technical lifetime over the next two decades.
Energy-related greenhouse gas emissions constitute about 84% of Australia’s total. Electricity generation, land transport, and heating in urban areas comprise 55% of total emissions. Conversion of these three energy functions to renewable energy is easier than for other components of the energy system.
So wind, PV and PHES together yield reliability and affordability to match the current electricity system. In addition, they facilitate deep cuts to emissions at low cost that can go far beyond Australia’s existing climate target.