Executive chairman of energy storage company 1414 Degrees, Dr Kevin Moriarty, told InDaily that more storage was urgently needed to counter the intermittency of renewable power sources, feeding increasingly into SA’s energy grid.
Moriarty said renewable energy generators such as wind and solar farms should be reimbursed by household and industrial energy consumers for the cost of installing energy storage products – such as those produced by his company – because of the extra reliability those products provided to an increasingly renewables-based energy grid.
This would, in turn, make investment in large-scale green energy generation with storage more economically viable while making that power production more efficient.
Wind and solar energy produced when demand is low would not be wasted, but rather be stored and fed into the grid as needed, he said.
Green energy production itself was becoming increasingly cheaper, he added.
Under Moriarty’s plan, householders and industrial energy users would pay a “storage use of system” charge on top of transmission and distribution charges that make up a typical power bill.
Households would pay the charge as a proportion of the energy they consume from the grid, while those with batteries large enough to feed power into the grid could potentially benefit from the payment as a proportion of their investment in storage.
Moriarty said the main benefit would be for large-scale renewable energy generators investing in storage to create economies of scale, providing cheaper power and a greener, more reliable electricity grid for consumers.
Meanwhile, he said, a less centralised grid, served by medium-sized renewable generators, would reduce the need for constant maintenance and extension of hundreds of kilometres worth of poles and wires – in turn reducing transmission and distribution charges.
On Wednesday, Premier Jay Weatherill announced a re-elected Labor Government would implement a 75 per cent renewable energy target (up from 50 per cent) and a 25 per cent renewable storage target, before heading to Flinders Street to open the new head office for 1414 Degrees.
Neither of Labor’s targets has penalties to enforce it, but the Premier said an extra $20 million paid into the Renewable Technology Fund would provide a financial incentive for green energy and storage.
Third-party analysis suggests the state is likely to hit 73 per cent renewable energy generation by 2025, without any intervention.
But Moriarty said if South Australia was to continue building its renewable energy supply, it needed hundreds of millions of dollars of investment in storage to ensure the system wasn’t vulnerable at times when the sun doesn’t shine or the wind doesn’t blow.
“Frankly, none of it (energy policy) is going to be adequate, at least not in the immediate term,” Moriarty said.
“The more renewable energy that’s brought into the system, the more storage that’s needed.
“(Without it) you’re going to be very vulnerable.”
He said South Australia would require the equivalent of two Snowy Hydro schemes to meet the storage needs implied by a 75 per cent renewable energy target.
“To have a 75 per cent target will require something in the order of 12-gigawatt hours of storage in the system,” he said.
“That’s an immense amount of storage … if you were going to meet that with hydro (energy generation) in this state you’ll probably need a couple of hydro-style schemes and we just don’t have that capacity.
“At the moment, there’s no real economic case for storage in the current (National Energy Market) regulatory framework.”
The charge, he said, would provide a stronger “economic basis” for companies to build renewable power plants with storage capacity.
He said more renewables with more storage meant lower prices in the long term.
“The sun and the wind are free,” he said.
“You have to pay your capital off … but basically, once you’ve paid those off, they’re producing electricity for nothing.
“So that should flow down the system.”
Moriarty said he was not pitching the charge simply to benefit energy generators that may invest in his company’s products.
“You might just think that I’m giving a pitch for my company, but we actually have more than we can deal with just in industry,” he said.
“It’s really a solution for society.
“If they want it to happen, there’s got to be a monetised concept.”
Energy systems consultant to 1414 Degrees Robert Riebolge told InDaily that, depending on the capital cost of rolling out energy storage across the state, consumers “probably would see a reduction in their bills … quickly”.
The company’s Thermal Energy Storage System (TESS) technology stores energy by heating and melting containers full of silicon at a cost estimated to be up to 10 times cheaper than lithium batteries.
As InDaily reported in November, 1414 Degrees is planning to launch on the Australian Stock Exchange within the early months of this year.
Moriarty said the company was developing products for a global market and that there were friendlier regulatory systems internationally than the national energy market in Australia.
“If Australia doesn’t want to do it, we don’t mind, we’ve got ample markets overseas,” he told InDaily.
“There are plenty of places in the world that would welcome our sorts of systems.
“When there’s a sufficiently economic solution available for storage at grid scale, it’s not here now, there’s nothing here now that can provide that … when that’s available, the market will adopt it.
“The end result is going to be positive for everyone.”
Yesterday, Weatherill doubled down on Labor’s renewable energy message, pledging $100 million to fund zero-interest loans for home solar battery systems.
Liberal Leader Steven Marshall said Labor was playing catchup because the Opposition had announced a similar scheme last year.
The Liberal Party’s energy policy involves a $100 million subsidy scheme for home solar batteries, a $200 million interconnector with New South Wales, a reverse-auction mechanism aimed at unlocking available South Australian energy generation during periods of exceptional demand on the grid, a ban on electricity companies charging exit fees for consumer energy contracts and a removal of the state’s renewable energy target.
Yesterday, SA Best Leader Nick Xenophon threatened to pull support from any government that doesn’t achieve power price reductions of 20 per cent by 2020, and released his party’s energy policy.
The plan includes establishing a not-for-profit community electricity retailer intended to unlock cheaper power for households with annual incomes of up to $75,000 and small businesses with power bills under $20,000.
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