AEMC suggest amendments to make the power grid more storage friendly
The Australian Energy Market Commission is calling for views on changing the National Energy Rules so large-scale batteries and other storage can take their place more efficiently in the power system.
Proposals from the Australian Energy Market Operator (AEMO), include creating new categories and classifications in the rules for ‘bi-directional resource providers’ and reviewing how obligations in the rules, including fees and charges, apply to them. They are outlined in an AEMC consultation paper released on Thursday.
In assessing those proposals, the Commission will look at how storage and hybrid* businesses are treated under the rules. We will look at whether this creates barriers to them entering the market, increases costs and workload, or affects investment certainty or clarity for businesses.
“The National Energy Rules were written when energy flowed one way: it was either supplied or consumed,” AEMC Acting Chair Merryn York said. “Now, energy flows in both directions. Batteries and other storage like hydro can both consume energy and supply energy to the grid. Eventually, this two-way flow of electricity will be the norm."
Since 2017, five large batteries have connected to the national grid. The cost of lithium ion batteries dropped by 87% between 2010 and 2019 and capital costs for grid-scale batteries are forecast to fall from $227kWh to $53kWh in the next decade.
AEMO has identified 13GW of publicly announced, maturing and committed future storage projects. While there are no grid-scale hybrid facilities live just yet, AEMO is receiving registration and connection enquiries.
The energy storage integration work intersects with work already underway by the Energy Security Board (ESB), which is looking at, among other things, small and large-scale storage as an important part of a two-sided energy market. In a truly two-sided market, energy consumers large and small both buy and supply electricity.
Submissions to the AEMC consultation paper close on 15 October.
*Hybrid businesses combine different technologies like batteries, solar and wind, behind one connection point to supply or consume electricity