From coal age to stor-age
Gordon Makryllos, Managing Director ANZ at Eaton, reflects on the shift to renewables — and the potential for the future of energy storage and microgrids in Australia.
Renewable energy has long been treated with scepticism. Industry and corporate policies can shift rapidly, seemingly without consideration on their impact to benefits such as jobs and energy independence. With the average life cycle of a power plant between 20 and 60 years — or 7 to 20 elections [1] — many investors are understandably weary of investing in directly policy-driven products.
While numerous countries around the world are reducing their climate emissions, Australia’s own emissions are currently on the rise[2] — an unsustainable approach. The time for action is now, as leaving it will only cause further damage for the future.
Getting ready to rely on renewables
Certain questions around reliability may have some basis now, but it must be remembered that a transition to a cleaner future is a gradual, not overnight, change. If the future of Australian energy is set to depend on renewables, effective storage will be vital to better connect these energy sources to the existing grid. Energy storage will also be key to making Australia’s national energy infrastructure more resilient and, importantly, enabling it to increasingly rely on clean energy sources.
We’ve already seen elements of this happening in a less sophisticated fashion in Australia. Australia is still among the world leaders for the take-up of solar panels at household level, and the popularity of solar panels has in turn led to the indirect creation of a decentralised energy model. Household solar panels have created greater generation of power, and individuals are actually able to feed their created energy back into the grid. But it comes laden with inefficiencies; energy is being generated, but it’s then being fed into the grid at times when it’s not needed, and subsequently lost. This defeats the point of using renewable energy sources in the first place.
Traditionally, the costs of large-scale energy storage have been prohibitive, but these costs are now falling. With battery storage, it’s possible to optimise the use of intermittent renewable energy on the grid — further opening up the possibility of powering Australia with clean, renewable energy while shifting further away from our reliance on fossil fuels.
Theoretically, this can also reduce the carbon footprint of Australia’s energy supply, better enabling the government to meet the deadlines it has set itself for the Renewable Energy Target. And with the ability to send this stored energy anywhere on the grid, businesses and private residences alike will be able to eliminate harmful emissions and save costs.
Creating a more resilient grid
Another interesting application of storage is in microgrids, which can efficiently and economically plan for local energy generation and distribution, while also increasing reliability and aiding in power quality standards. The implementation of local, distributed power generation and storage can be designed to allow portions of the grid and critical facilities to operate independently of the larger national grid when necessary, helping reduce the potential for unforeseen blackouts. The storage systems that are part of these microgrids of any size can also provide ancillary services to the grid, again strengthening performance and reducing the use of carbon generation.
Energy storage gives businesses and consumers the power of choice to optimise their energy costs and provide them with flexibility for the future. We are already seeing advanced aggregators working with businesses to educate and inform them on the extra money to be made while supporting the transition to a smarter, environmentally friendly energy grid.
The investment opportunity
Investment in storage still needs to increase to ensure renewable energy sources can fully step into the breach. The ever-falling price of energy storage technology today is creating an increasingly viable and attractive investment opportunity — but many Australian businesses are still not aware of this potential.
Energy storage technology can be complex to understand from a commercial perspective. Business owners tend to want to know exactly how the process can save money — and even more importantly, how much money can actually be saved once the cost of transitioning to a new system is factored in. However, the option to sell surplus energy back to the grid through ancillary services opens up new revenue streams that may help offset the cost of electricity and dramatically strengthen the business cases.
That said, it’s easy to see for many businesses how storage technology could work as part of a company’s overall power quality strategy into the future. Healthcare, telecoms and finance are three industries that need to maintain continuous, high-quality power flow at all times, and so the case for investment becomes almost self-explanatory. For other businesses, it’s about making efficient gains for the real estate they have to ensure the viability and innovation energy storage could bring to their business, particularly where their business models are looking at digital connectivity or the Internet of Things.
But businesses in other fields can still benefit from investing in power quality. No matter what field you’re in, power spikes or surges can result in damaged equipment, lost data, business downtime and ultimately lost revenue. Storage technology can help avoid these issues, and that’s something any company can get behind, irrespective of their specific attitudes towards renewable energy sources.
The long-term future of energy in Australia will be interesting to observe. Electricity prices are consistently rising, and a shift to renewable sources could potentially aid in reducing costs, while still maintaining a high standard of power. Our reliance on fossil fuels cannot last forever, and eventually a transition will need to be made to alternative sources. Energy storage can aid in accelerating this trend and help ensure a clean, stable and cost-effective supply of electricity for Australia.
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