Australian Battery storage held back by ignorance of regulators, ministers

Source: RenewEconomy

The developers claim that Australian energy ministers and regulators are simply unaware that the technology has been deployed at scale around the world, and simply don’t appreciate what the technology can do to support the energy transition.

The lament is not a new one, but it got a public airing last week in devastating testimony at the Senate committee inquiry into the resilience of Australia’s energy markets.

And it is a particularly hot topic given the political row over blackouts and near-misses in recent months, and the frustration from battery storage developers that regulators have been slow to change rules that favour fossil fuel generators and disadvantage their technology.

Lyon Solar, which hopes to have 350MWh of battery storage in the South Australia market by the end of next financial year, told the inquiry that Australian authorities simply did not understand the potential of battery storage.

“Australia is still quite naive about batteries,” Lyon CEO David Green said. “In the discussions we have had with regulators, they were not aware that there were batteries like this are operational in other parts of the world.”

That ignorance extended to discussions with regulators and ministers as recently as November, in which Lyon Solar and its technology partner, AES Energy Storage, sought to remove a few “myths” about battery storage – the most prominent being that it hadn’t been deployed at scale.

“That has helped,” Lyon said. “I think one of those myths is: it is not happening anywhere. Well, it is happening, and the AES guys can talk about that. It has been happening for a long time. It has not happened in this market.”

These claims have great significance in Australia’s energy markets, which despite its adoption of rooftop solar in great quantities, and the high levels of renewable energy in South Australia, has been slow out of the blocks on “smart technology” such as battery storage, demand management and energy efficiency.

Energy experts blame this on the fact that the fossil fuel industry, which has been fighting policies favouring carbon pricing, renewable energy targets, energy efficiency schemes, and more recently rule changes that could encourage battery storage, has the ear of regulators and politicians.

This advice comes from the fossil fuel lobbyists, regulators, consultants and other energy executives  locked in 20th century technologies, who were either not aware of new products, or had a vested interested in keeping it quiet.

Regulatory battles have been full of incidences of proposed rule changes being rejected or delayed on the assumption that battery storage was not competitive. There are even proposals to ban battery storage inside homes and garages, a recommendation that goes against all advice anywhere else in the world.

The head of AEMO recently claimed that battery storage was two decades from being competitive. One state regulator refused to consider battery storage because it didn’t think anyone would install the units. Up to 50,000 households are expected to install them this year, and up to a  million by 2020.

But it is at the grid level that this blind spot is posing most frustration. Lyon says there are perhaps 20 different value streams for battery storage, including providing peak power, substituting for grid upgrades, and providing the fast response services that could have kept the lights on in recent blackouts.

This article originally appeared on RenewEconomy, and is reposted here with the author's permission.