Utilities Unbundled 16

EY - Utilities Unbundled 16: Testing times for energy storage
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Testing times for energy storage

Australian utility SP AusNet is undertaking field trials on energy storage technology that could radically transform its electricity network business.

From late 2014, the company will test a new hybrid battery and diesel energy storage system known as GESS (Grid Energy Storage and Diesel Generation System) – the first of its kind to be used for distribution network support in Australia.

SP AusNet’s Alistair Parker and John Theunissen believe the trial could become a springboard for broader transformation of the business. Says Parker: “For us, this isn’t just about testing 1MW of storage. It’s about understanding future directions of the sector and how our business model will change.”

This isn’t just about testing 1MW of storage. It’s about understanding future directions of the sector and how our business model could change.
EY - Testing times for energy storage

Alistair Parker
General Manager
Asset Management Division, SP AusNet

Right time and place for storage

Energy storage is a hot issue for SP AusNet. More than 20% of the company’s total residential customers use solar photovoltaic and SP AusNet is already seeing network strain.

To date, batteries have only been practical for frequency regulation. But with many of the world’s leading battery manufacturers based in the Asia-Pacific, SP AusNet has been tracking the technology’s progress.

Delivering on commercial potential

The GESS solution combines a 1MW/1MWh lithium Ion (Li-ion) battery with a diesel generator. This decision to deploy hybrid technology was made primarily on cost grounds, but this hybrid approach may be the most cost-effective route to deploying storage technology in the medium term.

So far, the signs are promising. The new generation of Li-ion batteries has a 30- to 40-year life, and by the end of the SP AusNet trial in 2016, battery prices could be 20% to 30% lower than they are today.

Multiple benefits

SP AusNet’s initial goal for the GESS trial is to prove the major use case, which relates to demand management and reducing peak flows across specific parts of the network. “Spot” reinforcement of network bandwidth, through adding storage capabilities at particular points, should allow the company to defer expensive upgrades to existing wires and substations.

Overall, SP AusNet expects to deliver multiple benefits relating to code compliance: energy storage promises to be a valuable part of the company’s armory in responding to load pressures and power quality issues.

EY - Testing times for energy storage

John Theunissen
Manager Network
Modernisation, SP AusNet

Batteries go domestic

SP AusNet is already starting to revise its thinking around energy storage, which originally envisaged storage capacity installed primarily at a grid level. Once battery costs come down, storage capacity could be deployed more at the fringe of the network — working with individual customers. If so, partnering is likely to play a critical role.

Anticipating disruption

SP AusNet is keeping an eye on the future. Says Theunissen: “We are entering an age when digital technology and rich data will enable us to integrate capabilities across different technologies. Along with batteries, this could release a quantum scale of benefits which will transform energy supply.”

For more information, contact:

EY - Stuart Hartley

Stuart Hartley
Oceania Advisory Power & Utilities Leader

Melbourne, Australia
+61 3 9288 8646