Massive benefits for electricity system in store for the future

Friday, 01 February, 2013

A report released by the Clean Energy Council has found that the market for energy storage technology in Australia will be equivalent to several coal-fired power stations by 2030, effectively transforming the way we think about electricity for our homes and businesses.

Clean Energy Council Strategic Policy Manager Tim Sonnreich said that like mobile phones and email, the transformation delivered by energy storage would create many new opportunities - but also force big changes in the ways that energy was bought and sold.

“Australia’s electricity system is only able to store very modest amounts of power, but this is already beginning to change. Electricity storage is already being used in places that are on the fringe of the electricity grid or well off the beaten trail, working in tandem with solar power to save hundreds of thousands of litres of diesel in some locations - and save on huge fuel bills,” Sonnreich said.

“As the price of storage falls, it will allow us to smooth out the supply of electricity and help us deal better with issues such as peak demand. Household energy storage systems will also be much more common in the coming years as well, meaning families might say goodbye to electricity bills altogether by relying on their solar panels and batteries to power their homes day and night.

“If this happens on a large scale it will force a change in the business model of how we fund the poles and wires network, unlock the full potential of Australia’s enormous renewable energy resources and accelerate the shift to a clean energy economy. So while there are obvious benefits to electricity storage, there will also be major challenges to integrate storage into our electricity supply.”

Key findings of the Marchment Hill Consulting report ‘Energy Storage in Australia - Commercial Opportunities, Barriers and Policy Options’ include:

  • Based on current trends and projected costs, the market for storage is expected to be approximately 3000 MW by 2030 - equivalent to the output of several large coal-fired power stations.
  • The most economic markets for storage in the short term will be remote areas and the fringes of the electricity grid, where power is often expensive and unreliable.
  • The cost of storage could drop by more than half by the end of the decade under the most optimistic scenario in this report; under the baseline scenario it is expected to fall from approximately $800 to $550 per kW during this period.

Sonnreich said storage technology could be built and operated as an add-on to a power station, installed by people in their homes as part of a large and flexible smart grid system or as standalone storage facilities like the data processing centres used by IT companies.

“But should storage be owned and operated by network businesses, retailers, generators, individuals or all of the above? Storage interacts with the market in a very different way to other technologies and it will take policymakers time to consider these and many more issues that will arise as it becomes more common in our electricity system,” he said.

Some common types of energy storage currently in use include:

  • Batteries.
  • Solar hot water systems.
  • Pumped hydro - Water is pumped to a reservoir at the top of a hill and is released to turn turbines in times of high power demand.
  • Flywheel storage - Electricity is used to spin a rotor cylinder suspended in a vacuum chamber to reduce friction. Adding electricity to the flywheel makes it spin faster, while taking electricity from the flywheel reduces its spinning speed.

The report can be downloaded from

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