After two years of extensive trials, Neoen’s Hornsdale Power Reserve now has the capacity to provide an estimated 2,000 megawatt seconds (MWs) of equivalent inertia to South Australia’s grid through Tesla’s Virtual Machine Mode technology.
Known as virtual synchronous machines or grid forming inverters, this technology gives batteries the capacity to help stabilize the grid by providing inertia. Along with frequency control services, inertia is necessary for operating a stable grid and is especially important after major disturbances. Until now, inertia services have only been provided by gas or coal-fired generators and their rapid retirement is causing inertia shortfalls or grid instability – especially in regions like South Australia, where renewable penetration has reached 64% over the last 12 months.
The Hornsdale Power Reserve will now be capable of providing around 15% of the state’s predicted inertia shortfall – a globally significant milestone. The use of the technology at Hornsdale has been approved by the Australian Energy Market Operator (AEMO), which has been working closely with Neoen, Tesla and ElectraNet, South Australia’s network operator, to trial the Virtual Machine Mode at Hornsdale following its expansion in 2020.
The companies now completed all the necessary studies, testing and analysis to deploy the technology at scale, with that capacity available from today. “We are proving that our assets can replace fossil fuels not only in the production and storage of electricity, but also through providing all the essential services that a power system needs to function,” Neoen’s Chairman and CEO Xavier Barbaro said. “We are keen to build on this progress, continuing to innovate and to accelerate the transition to renewables in Australia and around the world.”
Realizing the full value stack of batteries
Grid-scale big batteries in Australia find themselves in a funny position today where the technology is capable of providing multiple grid services, including fast frequency response, frequency regulation and energy arbitrage, and now – with advanced inverters – inertia. The issue is there are no markets yet to reward this full value stack.
This is slowing the rollout of the much needed services because their value isn’t reflected in solid revenue streams which would drive investment. Just yesterday though, the Commonwealth government-backed ARENA provided funds for Monash University to conduct a AUD 1.18 million ($818,448) study into alternative market designs to better support energy storage technologies and drive clearer investment signals. “Improving the economics of energy storage is going to be key in our transition to high shares of renewable electricity,” ARENA’s Miller added. Last year, AEMO published a white paper outlining the importance of grid-forming inverters/virtual synchronous machines in realizing its goal to be ready for instances of 100% renewables by 2025.
There are a number of other big batteries in planning or construction which will also deploy virtual synchronous capacities, including AGL’s 250 MW/250 MWh battery project on Torrens Island in South Australia.
Hornsdale trials to deployment at scale
In the lead up to the deployment, the Australian Renewable Energy Agency (ARENA) provided AUD 8 million to trial the grid forming technology at Hornsdale, which sat alongside $15 million from the South Australian government’s Grid Scale Storage Fund.
ARENA’s CEO, Darren Miller, described Hornsdale as a “pioneering project” demonstrating “the full technical capabilities of what batteries can achieve with advanced inverter technology installed.”
Neoen’s big battery vision for Australia
Hornsdale is one of Australia’s largest lithium-ion batteries, second only to Neoen’s Victorian Big Battery which came online last year.
Neoen is also developing several other big batteries in Australia, including the 100 MW Capital battery outside Canberra and a 300MW and 800MWh battery in Blyth, north of Adelaide.
In total, the company has 576 MW of storage capacity either in operation or under construction. Neoen has previously said it plans to have at least one large-scale battery operating in each of the five states participating in Australia’s National Electricity Market (NEM).
At the end of 2021, Neoen’s global pool of storage assets sat at over 700 MW, the vast majority of which are in Australia.
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