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SA needs a smarter battery plan

Opinion

The State Government's investment in Australia's biggest battery would be better spent on a wider network of storage, writes Nigel Carney.

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While the Weatherill Government’s much celebrated Elon Musk-inspired battery proposal has some merit in the great South Australian energy debate, simple logic and world trends point toward a much better battery and energy plan for the state.

The South Australian Renewable Energy Report (AEMO December 2016) offers simple insights which may have been overlooked in the rush to create a new electricity plan for South Australia, which includes the nation’s biggest grid-connected battery. What is this battery after all? It’s simply an assembly of millions of units of lithium ion battery units in parallel. No magic bullet. In fact, the money to be invested in the battery could arguably be invested much more wisely.

The government should pause momentarily to examine the state’s key strengths in the renewable energy market. It could integrate the battery proposal with a more sophisticated and broadly considered approach offering benefits across the board to South Australians, industry, and the suffering job market.

SA’s strengths

Let’s take a look at the good news overlooked in the 2016 South Australian Renewable Energy Report and examine the positive opportunities that could emerge from it.

“Since 2009, South Australian total installed rooftop PV capacity has grown strongly,” it says. “This is primarily due to government incentives in the form of rebates and feed-in tariffs, the Small-scale Technology Certificate (STC) multiplier, falling system costs, and increasing electricity prices. These factors helped reduce payback periods for consumers, making rooftop PV generation an attractive option for households, particularly from 2010 to 2012. South Australia’s installed rooftop PV penetration per household is higher than in any other NEM region. More than 29% of South Australian dwellings now have rooftop PV systems installed.”

The bottom line is this: on conservative forecasts, the growth projected for SA rooftop solar will in the next six years provide the energy juice equivalent to a 700MW power station, and a robust one given that it’s essentially a “power plant” spread across the state.

The following graph from the report illustrates the scenario:


This trend offers a chance to end the tiresome debate with the Federal Government while lending support to the State Government’s energy autonomy aspirations – a timely correction and bookend to the tragic end of  Playford era energy self-sufficiency.

The state could, for example, follow well-published world trends in grid electricity management and integrate these with the state’s current competitive advantage in solar energy. Such a move could also help to stem the downward economic spiral, sadly making daily headlines.

Batteries trump gas

Revisiting the skeleton of the Weatherill plan, the state can anticipate spending $360 million on a new gas plant and $150 million on the super big battery. Add likely price escalations and blowouts, as history shows, and we are looking at another billion dollar program, hastily decided after the last round of blackouts.

As Premier Weatherill stated at the time: “A battery could be delivered quickly, we are advised,” he said, adding that it would also be economical as it would pay for itself to some degree.

‘To some degree’ is not that specific and sounds like the recipe for another infrastructure investment disaster.

Greens Senator Hanson-Young summed up the situation accurately: “The gas industry has received a huge payday today… Subsidising gas extraction in the age of climate change is reckless and will do nothing to drive down power prices.”

The 2016 SA budget shows a meagre $300 million return on petroleum and gas from state resources, primarily sourced from the Cooper Basin. The royalty return is a mere 5 per cent which is reduced further by generous post-well offsets. The household names that control the gas supplies and will determine future electricity prices are the companies anticipating a ‘pay day’ under the current plan. Compare this to the $140 million received in revenue from expiation notices and the clear winner is… the gas industry.

If a Premier of the measure of Sir Thomas Playford was still around he would be again calling the Prime Minister seeking a loan to nationalise the state’s gas to defray the current energy crisis.

Failing that, what is the alternative?

A quick examination of global energy trends may assist the state’s energy planners to make sense of the issues. The common thread is decentralisation of power.

KPMG says: “The UK market is progressing towards decentralization with the advancement in technology and increasing consumer awareness and involvement. City leaders can harness this shift towards a more consumer and community-driven market to deliver lower costs for energy users whilst achieving decarbonization targets and ensuring security of supply.”

Forbes magazine elaborates: “Distributed generation also improves the overall efficiency of the power system. Local energy generation reduces line losses and extends the lifespan of existing transmission infrastructure by minimising wear-and-tear from use. Importantly, distributed generation creates a stronger, more resilient power system in the face of extreme weather, human error or terrorist attack. Just like diversifying a financial portfolio to mitigate risk, distributed generation diversifies our power supply – in terms of location, size and fuel source.”

Jay Weatherill’s quickly announced plan does not fit with these global trends.

So how can our $500 million be invested more prudently?

The Tesla Powerwall attracts rockstar attention.

A better plan

We should support the strong trend in solar that is already evident and spread the commodity of battery power across the state. By distributing battery storage across many residents and businesses, we can reduce the risk of outages while creating an inter-network of solar-connected micro grids that will rid SA of the current risk of unreliable and wasteful transmission.

For argument’s sake, let’s say an average solar rooftop PV system in Australia costs $8000. Now let’s say the Government does a bulk $150 million battery deal with Elon Musk or another battery musketeer and these grid systems come installed with battery system plus a grid connectivity option. If we invest $500 million available to rescue SA from the darkness in this project, we would have 62,500 installations ready to roll. With an election looming, let’s say Jay and Tom offered a 50/50 deal to the public including residential and business plans, thus doubling the number of 10KW installations to more than 120,000 and leading to a surge in the solar industry. One more sum for Tom’s sake: 120,000 x 10KW represents 1200 megawatts of power. That walks all over the planned gas plant and the South Australian public is not held to ransom by the gas industry. If Opposition Leader Steve Marshall threw in some steak knives it would make for a very interesting 2018 election year indeed.

Play with the details, mix and match and negotiate, but however you look at this scenario, it begs the question of why the state would now place the public at the mercy of the gas industry?

Jenny Paradiso from South Australian owned and operated solar PV company Suntrix would like to see both options on the table: the big battery and distributed battery systems.

“Ideally we need what the 100MW storage the government has proposed, plus further battery support for the rooftop solar sector,” she said. “We also need to offer homes both self sufficiency, and smart localized connection to the grid which can minimize distribution loss. Good regulations and governance needs to be maintained and enhanced to ensure safety and standards are controlled across the industry. Management of end of life systems also needs to be addressed although the continually reducing cost of panels and battery technologies is good news in this respect.”

More rhetoric and hasty twitter decision-making may plunge South Australia back into darkness and further economic paralysis.

A comprehensive contribution to the case for a paradigm shift to distributed generation and storage is well articulated in Critical Thinking About Energy: The Case for Decentralised Generation of Electricity, highlighting these points most relevant to South Australia today:

More rhetoric and hasty twitter decision-making may plunge South Australia back into darkness and further economic paralysis.

The AEMO report is a clear reminder of the competitive advantage that already exists in South Australia.

Pandering to the gas industry is not the answer, neither is the investment only in a big battery. The answer my friends is not just blowing in the wind – it’s right above us.

Nigel Carney is the Project Manager of Playford Heritage Park, a proposal currently before the South Australian government to recycle for community, regional and state benefit, the legacy assets of the Alinta Leigh Creek Coal Field. He can be contacted at playfordheritagepark@gmail.com

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