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Batteries the key to more reliable, cheaper SA energy: Garnaut

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South Australia can have cheap electricity, based increasingly on renewables, without compromising reliability – if the state embraces large-scale battery technology, climate change economist Ross Garnaut says.

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Garnaut, also the chairman of SA-based solar and battery storage company ZEN Energy, says battery technology has the potential to reduce the chances of wide-spread blackouts during severe weather events.

The author of the most significant report to the Australian Government on the subject of climate change told InDaily battery storage could stabilise South Australia’s electricity grid, encourage lower energy prices and, on a smaller scale, guarantee backup power for medical services.

He said his company was exploring options to demonstrate the technology in South Australia.

“One cannot completely avert the possibility of [a blackout, however] one could reduce the chances of severe weather events causing severe blackouts [using] battery storage,” he said.

“It’s especially necessary for solar and wind because they are intermittent [power sources].

“When you have variable power, then the battery can even that out.

“Such stability of the grid is becoming quite common in America and Europe, and it could help in Australia.”

Garnaut said South Australia’s high level of renewable energy generation – 40 per cent – made it an obvious candidate for large-scale battery storage.

He said that when the wind is blowing and the sun is shining, South Australia has some of the cheapest electricity in Australia.

However: “When you have a very high proportion of intermittent electricity … you need something to balance it and the means of balancing it are more interconnection, or some form of fossil fuel-based power, or storage.”

“Gas had more advantages when gas in Australia was cheap and abundant. It’s no longer cheap.

“When we’ve got a lot of solar and wind power, prices are very low.

“If we can play our cards right with [battery power] storage … in the long term there are good prospects of having lower cost power.”

He said that, with the stability offered by battery technology, the function of the interconnector between SA and Victoria could change – from importing cheap coal-fired power from Victoria to exporting cheap, renewable energy from South Australia.

He added that the electricity price crisis that hit South Australia in July was exacerbated by the way in which the energy market is regulated.

Currently, energy generators and wholesale energy consumers make price bids in 5-minute blocks.

Every half an hour, an average of the prices from each five-minute interval is recorded, and confirmed as the “settlement price”.

Garnaut said that, in July, often power prices spiked during rare five-minute intervals within those half-hour settlement periods, but because the price is averaged out over the half hour, consumers were hit with huge costs.

“For a while in July, we have limited transmission [of electricity from Victoria],” he said.

“The interconnector was down while they expanded its capability.

“The effects of that were exacerbated [by] low wind generation.

“Gas became scarce and expensive because of huge exports from Queensland.”

He said solar batteries can respond “in nano-seconds” to electricity price fluctuations – absorbing electricity within the five-minute periods when power is abundant and cheap, and not absorbing it when it is expensive – but regulations would have to change to allow that agility to translate into savings.

“If we had had large batteries in operation at the time … we could have very significantly [mitigated] that fluctuation.”

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