ARENA selects 3GW “sophisticated” large battery essential for 100 percent renewable power grid

The Australian Renewable Energy Agency has received an overwhelming response to its offer of a $100 million grant for an ‘advanced’ grid-scale battery project, which is seen as critical to the transition to a 100 percent renewable energy grid.

A shortlist of 12 projects representing capacity in excess of 3GW and 7GWh storage was completed from more than 54 proposals.

ARENA said its response “far exceeded expectations,” and underlined the major development path of Australia’s large battery storage project.

Funding will be provided for at least three projects and selected projects have been asked to submit full applications for their share of the funding offer, available for new and existing projects equipped with ‘advanced’ inverters.

Selected projects totaled a combined $297 million of grant requests, for a total investment value of $3.7 billion.

The figures suggest that ARENA’s funding could eventually support the development of approximately 1,000 MW of new battery storage capacity.

ARENA is offering a maximum grant of $35 million to support the deployment of a grid-scale storage project with a ‘state-of-the-art’ inverter that will enable the project to offer network building and system support services.

“Advanced inverters that can help stabilize the grid are the missing piece of the puzzle that will support the transition to 100 percent renewable energy penetration in a short period of time,” said ARENA CEO Chris Faris,

“We were really driven by the number and quality of apps to round off; it gets very competitive, the 12 selected projects represent the strongest of the impressive fields and we are looking forward to seeing their full application.

Under the battery funding, ARENA is offering grant funds to support construction of new battery projects or retrofit of existing batteries with a capacity of at least 70MW, which will be equipped with ‘advanced’ inverters.

This will include grid-building capabilities and the ability to provide grid stability support as the market share of wind and solar projects continues to grow – enabling batteries to effectively mimic the behavior of synchronous generators such as coal, gas and hydroelectric generators.

The grant guidelines published by ARENA say that funding could be provided for existing battery storage projects, which will be used for battery retrofitting with grid-forming inverters, as well as combined retrofitting with expansion of existing battery projects.

ARENA has previously provided grant funding for the ESCRI ElectraNet battery storage project in Dalrymple, which is equipped with an inverter with grid forming capability. The project eventually repaid its $12 million grant to ARENA after receiving large unexpected revenues from its network support services.

Other projects to include “advanced inverters” include the expanded Hornsdale Power Reserve – Tesla’s massive battery – and the Wallgrove battery in New South Wales, although the latter is yet to provide service to the market.

Grant funding is required as this service has not been rewarded by market signals.

Details of the dozen selected projects have not been disclosed by ARENA, but successful grantees are expected to be announced before the end of the year.

RenewEconomy first revealed details of the battery funding round, which officially launched last December and adopts the funding model previously used by the agency when providing funding support for initial large-scale solar projects.

The Unified Systems Plan 2022, recently published by Energy Market Operators Australia, highlights the need for a major increase in Australia’s energy storage capacity as renewables are varied to meet more of Australia’s energy needs.

Under the ‘step of change’ scenario – which has emerged as an effective ‘reference’ scenario due to the current pace of change – AEMO expects renewable energy to reach an 83 percent market share in the financial year 2030-31, and reach 98 percent by 2050.

To support the growth of this renewable variable, the ISP suggests there needs to be a 30-fold increase in battery storage capacity – which currently stands at around 2GW – growing to 15GW by 2030 and 61GW by 2050.

Michael Mazengarb is a Sydney-based reporter for RenewEconomy, writing about climate change, clean energy, electric vehicles and politics. Prior to joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.

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