Speed of the rise of battery storage being underestimated by market operator: Corbell

Conservative estimates on the value of battery storage from the Australian Energy Market Operator highlight the institutional barriers faced by Australia as it seeks to shift to a low-carbon grid, ACT climate and energy minister Simon Corbell has said.

Corbell says the chair of AEMO told the pivotal COAG energy ministers meeting in Canberra a fortnight ago that it may be 10-20 years until battery storage would be able to exert an influence on grid stability and support.

“I was amused,” Corbell told the Energy Disruption conference co-hosted by RenewEconomy in Sydney on Wednesday.

“It was a remarkably conservative and pessimistic view of a technology that is showing a trend of rapid cost falls …. And it highlights some of the challenges we face in the design of our energy markets when that sort of presentation is being made to decision makers at COAG level.”

Corbell pointed to the ACT’s own program, which will see 36MW of battery storage installed in 5,000 homes and businesses in Canberra, and which would avoid $200-$220 million of infrastructure costs (from grid upgrades and maintenance).

However, Corbell also said he was confident that change was afoot at the COAG level – despite what he saw as resistance from AEMO and the main policy maker, the Australian Energy Markets Commission.

“The recent meeting of COAG energy ministers was widely reported as emphasising the importance of gas distribution and competition in gas markets, to manage intermittency.

“A more significant decision was that for the first time every state and territory agreed that the NEM (National Electricity Market) has to be affordable and reliable for consumers, and it has to be sustainable.

“That sort of language would have been unheard of 18 months ago,” he said. “That was a step change in terms of the culture and environment of the COAG meeting. Whether that will be realised in terms of policy making remains to be seen, but it is clear that transition is under way.”

© 2016 Solar Choice Pty Ltd

Giles Parkinson