The global electricity market is in flux with a monumental shift from fossil fuels to renewable energy underway.1
According to data from the United Nations and Bloomberg New Energy Finance, electricity sourced from renewable capacity including wind, solar and biomass reached a record 12.1% of global electricity capacity in 2017.2 In fact, 2017 proved to be a breakout year for renewables, with 157 gigawatts (GW) of renewable power commissioned throughout the year, dwarfing the 70 GW of net fossil fuel capacity brought online.3 Solar continued to dominate renewable installations with US$279 billion invested in 2017, accounting for 98 GW (or 38%) of all net new power capacity added to the globe.4
However, while renewable energy has grown significantly in recent years, the sector faces some challenges if this rapid growth is to continue. The primary challenge in the widescale adoption of renewable energy is its variable or intermittent nature, as at times more energy is supplied than is demanded while at other times, there’s too little.5 For example, the output of renewables depends largely on diurnal or seasonal patterns, which is to say that wind-generated power depends on wind speeds and air density, while solar production depends on the amount of sunlight falling on panels at a given place and time.6 If renewable energy is to continue to supply a growing proportion of the world’s electricity needs, further integration of renewable capacity into grid networks and electricity markets will be essential, especially if renewables are to replace existing, aging and often fossil fuel baseload generation.7
When considering integrating solar capacity into the electricity grid, it is important to differentiate between intermittency and predictability. While solar may be intermittent, its generation is very predictable.8 Forecasting solar on an hour-ahead or day-ahead basis can be done with a high degree of accuracy if required, enabling market operators to further integrate solar capacity into the grid in the future if the market regulations and infrastructure exist.9
Storing excess renewable power (or buying and storing when prices are cheap) for use when electricity demand exceeds supply is one way to resolve the intermittent nature of renewable energy. While energy storage comes in many forms, including pumped hydro, hydrogen and flywheels, batteries are the most common solution to renewable intermittency. There are a range of batteries that are currently in use and many more under development that could be combined with renewable generation. Lithium ion batteries are one of the common types of rechargeable storage devices. This technology is not new and has been in commercial use for almost 30 years. Australia has been an early adopter of large-scale lithium ion technology combined with renewable generation, and a prime example is the 100 MW Tesla battery in South Australia.10 This battery will be used for a number of purposes, the most important of which is to help prevent load shedding blackouts, and Tesla estimates that at full capacity, it could be capable of powering approximately 50,000 homes for more than an hour.11 According to the Australian Energy Market Operator (AEMO), Tesla’s battery has outperformed coal and gas generators on a number of key metrics.12 On 18 December 2017, a coal generator supplying 689 MW to the South Australian market tripped without warning and within seconds, the Tesla battery was able to respond to discharge electricity to the grid.13 According to AEMO, a steam turbine or gas generator would have taken significantly longer to respond to the shortfall and provide electricity to the market.14 Tesla’s lithium battery also appears to have lowered costs borne by electricity consumers in South Australia. Due to the state’s high penetration of wind farms, AEMO is required to source “frequency control” or “back-up” power generation from gas-fired power stations.15 Sourcing electricity from gas-fired power stations can be very expensive with costs flowing down to consumers.16 However, sourcing back-up power from the battery at a lower cost has enabled the South Australian energy market to avoid the significant price spikes of the previous summer.17
Another solution to renewable intermittency is the co-location of renewable assets. Australia has pioneered co-located developments with the Gullen wind and solar project.18 Located in the southern tablelands of NSW, Gullen combines a 10 megawatt (MW) solar farm with 73 wind turbines.19 The Gullen project’s wind and solar plants complement one another, with solar producing more electricity during the summer and wind generating more in the winter.20 Furthermore, the generation profile of solar and wind are complementary, with solar peaking in the middle of the day and wind generation generally climaxing in the afternoon.21 The complementary generation profile of wind and solar enables projects to produce electricity almost continuously.22
With renewables expected to represent almost one third (32%) of all installed energy capacity by 2040,23 it is evident that innovative technological solutions are required to ensure clean energy can be delivered reliably and continuously around the world. However, storage and co-located renewable assets could provide solutions to the intermittent nature of renewable energies to help meet new demand and replace aging fossil fuel baseload generation.
Tom Kline was the inaugural CEO of New Energy Solar, having launched the business in December 2015 in his then role as Chief Operating Officer of Walsh & Company. Tom relocated to the United States in 2017 to oversee the operation of NES’ portfolio of solar power projects in California and North Carolina. Tom will also guide the business’s continued investment in North American projects.