The role of energy storage in decarbonising Australia's energy mix

By Mary Hendriks*
Tuesday, 01 October, 2019

The role of energy storage in decarbonising Australia's energy mix

Decarbonising the energy mix is essential for the urgent need to lower carbon emissions globally. With vast resources of solar and wind power, Australia has the ability to not only make this transition but become a global leader and export energy-related services. The success of this change to integrating higher levels of variable renewable energy depends on how we use and value the services of energy storage systems at grid level, for managing distributed energy resources and in microgrids and remote sites.

The switch to higher penetrations of renewable energy in Australia is well underway, with over 2 million solar rooftops and installation of large-scale renewables exceeding national targets.

At grid level, decarbonising our energy supply means moving away from centralised fossil fuel thermal generation. Integration of more large-scale renewable energy requires new market rules, building additional transmission infrastructure and providing incentives to encourage uptake of energy storage to support this change.

Historically, pumped hydro energy storage systems have provided storage to the main Australian energy markets. While no projects were developed in the past 30 years, there is a renewed interest in pumped hydro, including the innovative 250 MW Kidston pumped storage hydro project in Queensland, and the proposed projects in Tasmania, alongside development of an additional undersea interconnection. Projects at this level are constructed over long timespans and require significant investments and additional transmission infrastructure.

Australia also needs more nimble options, such as utility-scale battery energy storage systems (BESS), able to be completed in time frames of months rather than years, and which can be sited alongside the growing number of solar or wind farms. BESS will play an important role in the energy transition as our ageing coal-fired power stations retire.

Over the past few years, Australia has become a global leader in the uptake of utility-scale BESS commencing with the build in South Australia’s 100 MW Tesla battery at the Hornsdale Power Reserve. This was followed in Victoria by Energy Australia/Ausnet’s 30 MW Fluence system in Ballarat and Edify’s 25 MW Tesla system in Gannawarra. While these battery systems received some financial support, the first non-subsidised utility-scale BESS system has now been developed, with more expected as the market starts to value the many services and capabilities of battery storage.

BESS is reducing use of gas peaker plants to support the grid, resulting in lower emissions and costs. BESS will play an increasingly important role in the energy transition as coal-fired power stations retire.

Distributed energy storage will help lower emissions while keeping energy costs down for businesses, farms and industry. Many sites already with installed solar will add battery storage over the next decade. Longer duration storage will be optimal for some applications, such as the VSUN vanadium redox flow battery soon to be installed on a Victorian apple farm alongside a solar array.

Australian home owners have already achieved cost savings from rooftop solar and the addition of battery storage not only increases self-consumption, but also leads to further decarbonising of the grid through participation in aggregated systems such as virtual power plants (VPPs). South Australia’s programs provide stored energy from large numbers of individual battery units when needed to support a grid with high percent of renewable energy.

Microgrids with energy storage are one of the most innovative ways of supplying energy; they can be grid-connected or standalone, enabling integration of renewable energy while providing local control and increased reliability. For remote microgrids, the main benefit of battery storage is to reduce the amount of diesel or gas generation, often with significant cost reductions.

Western Australia is among the global leaders in development of microgrids with battery storage for remote communities and mining operations, and is now looking to export Australian innovation in microgrid systems able to supply electricity for areas with limited or no grid services.

Urban grid-connected microgrids are also being implemented, such as the Monash University Clayton Campus installation, which includes one of Australia’s largest hybrid battery storage systems.

Energy storage, together with innovative energy management systems, is key to fast-tracking a lower emissions grid, enabling more distributed energy to be used and reducing consumption of gas and diesel in remote areas.

To find out more about the Australian Energy Storage Alliance (AESA), visit

*Mary Hendriks is the Industry Executive of the Australian Energy Storage Alliance (AESA), an industry-focused information hub and advocacy group for the energy storage sector.

Mary has over 10 years' experience in various roles supporting the uptake of renewable energy, most recently in the energy storage sector. She also volunteers as committee member for the Sydney branch of the Australian Institute of Energy. Mary's passion is for a well-managed transition to clean energy systems in Australia.

Image credit: © Le Moal

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