Guest blog: Australia’s burgeoning market for energy storage
With redT's 1st systems in the final stages of commissioning at a site in Melbourne and the Company exhibiting at Australia's largest renewable energy event, it's been a busy few weeks down-under coordinating meetings with interested parties and making the most of a highly successful All-Energy Australia event. redT's lead energy analyst, Alex Moor gives his take on the Australian market and its huge potential for long duration, energy storage infrastructure...
It’s been an important trip on a number of counts really, firstly, it’s great to see our machines coming to life on site at the Monash University campus and even better to show some of our key contacts around as they enter the final stages of commissioning.
Also, being in a prominent position at All-Energy Australia and talking to the hundreds of people who came to our stand over the two days has really helped to crystallise our proposition and reinforce the value of our solutions in this market. The show itself was very successful for us – as the most prominent flow machine technology company there, we certainly offered something different to the plethora of domestic and small-commercial scale battery manufacturers in attendance and I think that was reflected in the level of interest we received.
Below are my key takeaways from the conference and the various meetings I’ve had over the past few weeks:
Cheap solar continues to drive the market
I must say that even I was surprised at quite how cheap PV has now become in Australia. I had at least 2 different suppliers mention panel costs starting from $0.25 AUD / Watt (that’s the equivalent of 14p / Watt at today’s exchange rate) with full installed costs at a little over $1 AUD / Watt. This cheap cost of energy generation really drives the economic returns for storage and at this price, it makes sense to use your storage asset to allow you to oversize or extend your solar array, and store as much energy as you can, allowing you to self-consume, smooth out your peak demand charges or bid into some of the profitable Australian grid services.
Significant opportunities exist for flow machines in a lithium-dominated market
The existing installed energy storage base in Australia is almost completely dominated by sub-4 hour lithium batteries, however, this is not always the technology that’s required especially when you look at the range of peak demand charge periods across different electricity network operators which are all typically over 4-hours long. This was clear from our conversations during All-Energy and also from the level of excitement around our 1MWh hybrid system in Melbourne. With the majority of large lithium battery installations being supported by attractive bilateral contracts with state or network operators, we see a significant opportunity for flow machines behind-the-meter with secure, non-subsidised, business models driven by reducing costs for high-energy users. Building a strong commercial case around the energy usage of a C&I site means the storage asset can bid ever lower prices into ancillary services markets further helping drive down network costs for consumers.
Flexibility is essential in the Australian energy market
This is another area which was brought up time and time again. Significant uncertainty remains across the entire industry, driven primarily by the prevailing political and regulatory situation in Australia. With a changing political landscape, and energy policy high on the agenda, long-term flexibility is a highly prized commodity for those investing in distributed energy in Australia – another area where our flexible, 25 year energy storage solutions differentiate themselves from current incumbent solutions.
Overall, a very successful trip for us and a great opportunity to build our profile in what is a key market for us as a company moving forward. We’re currently looking at a number of very interesting projects in Australia, so watch this space….