It is not new to recognise the ongoing transition of the energy market in Australia. The increase in variable renewable generation is changing the economics of existing synchronous generation – i.e. coal and gas generators – and how AEMO operates the market.
Historically, large synchronous generators have provided essential system services – frequency control, inertia and system strength – as a natural by-product of their generation of electricity. Variable generation – i.e. wind and solar – do not provide these essential system services. However, large, grid-connected batteries are increasingly able to provide these services to the network.
In 2017, South Australia caused ripples across the world when Elon Musk promised to deliver the then world’s biggest battery (100MW/ 129MWh). TransGrid has recently announced a battery to be located in Western Sydney and Victorian Energy Minister Lily D’Ambrosio announced Victoria will develop a battery three times the size of South Australia’s at 300MW/450MWh. Even more recently, AGL has announced plans to develop a 250MW battery in SA on the site of its existing gas power station Torrens Island. These big batteries may forever change the market for essential services.