South Australia has been notorious for extreme volatility in electricity pricing, and as the recent experience in Texas with the Epcot issues, any grid can experience this volatility in moments of unusual events.
Part of the solution to the problem the Australians face, has been to implement the Hornsdale Power Reserve (AKA Tesla Big Battery), an enormous battery project that was put in place to smooth out the grid. The 150MW/194MWh grid connected storage facility owned by Neoen, and in 2019 was directly responsible for a $116 million reduction in grid costs.
Recently deposed of its title of world’s biggest lithium ion battery by the Gateway Energy Storage project in California, it is a key piece of infrastructure and a lucrative profit centre for its owner.
Electrek, who cover EV’s and sustainable eco-system news, report that Hornsdale was able to take advantage of grid over supply recently when prices went negative to the tune of $1000/MWh for a period of a minimum of 183 minutes, sucking up the excess supply, being paid to do so and then having the ability to sell it on at a later stage.
There has been great interest globally in this project and its potential to be deployed at scale to help with other volatile market places. In addition to the Gateway project, a 100MWh project in Texas is underway, with others in planning. The value of the battery is in how they smooth the supply from renewable sources and the speed (think milliseconds) that they can respond to supply problems.
This is challenging for existing Gas Peaker Plants as whilst the digital battery service reacts in the blink of an eye, the Peakers literally have to spin up so they have zero chance of reacting as quickly. Electrek report that of the US’s 20GW of current Peaker power, 10GW of that market could be lost due to battery storage.
From a consumer perspective, this is all good, less volatility and more predictability.
The challenge in the short term is storage availability, with battery supply being fought over globally with multiple use cases fighting for what availability there is.
In the medium to longer term, for the Retail Energy Providers, opportunities present themselves to get involved in the supply of smaller consumer storage systems, the most talked about in the market being the Tesla Powerwall, itself supply constrained and currently only available to purchase with a solar installation. Battery capacity in the home allows the end user to take advantage of demand response requirements with minimal impact on comfort or energy availability.
Grid smoothing by using consumers homes presents almost a bigger opportunity than these bigger installations, and the people who own those relationships, are the retailers.