Batteries uncertainty persisis

BATTERIES are on a course to compete with gas for managing peak loads by 2025, Wood Mackenzie analyst Saul Kavonic told Energy News.
Batteries uncertainty persisis Batteries uncertainty persisis Batteries uncertainty persisis Batteries uncertainty persisis Batteries uncertainty persisis

Saul Kavonic.

Helen Clark

Editor

This is supposing current battery cost downward trends continue, whereas they are currently 50% more than gas when it comes to peak load management. 
 
Battery charging costs will also come down. 
 
This is excellent news for renewables and their supporters, but long term energy security will depend on more than good will. 
 
Backup needs to be built into renewables plans "to deal with the inevitable uncertainties, mistakes and trial and error the journey will entail", Kavonic said. 
 
What matters most is energy security, and gas should have a place in that balance. 
 
Even with Wood Mackenzie's forecast that if all planned renewables projects go ahead gas demand for power generation in South Australia could drop by 70% by 2025, it will still be necessary as a backup source, and possibly diesel.  
 
That 70% figure would still only account for a small proportion of domestic gas usage on the east coast. 
 
There may be a need for gas backup until 2035. 
 
"From a policy perspective, what is key is to have a market design that still incentivises having dispatchable backup available for the unusual, yet inevitable, weather periods," Kavonic said. 
 
SA's recent low wind levels is one obvious example of an unusual weather period that may affect power. 
 
This needs to be treated with more seriousness than other disruptive, change making technologies. 
 
State- or country-wide power generation shouldn't be conflated with new cell phone developments as the two are vastly different technologies with different inputs. 
 
 "When it comes to energy security, jobs, livelihoods and lives are on the line," Kavonic said. 
 
The Australian Energy Marketplace Operator faces a patchwork of policies that don't incentivise long term investment, and backup needs to be better addressed. 
 
"We appear on a path that will see incremental investments that are economic each and of themselves, but that overall does not result in the most efficient or stable energy grid for Australians," he said.
 
Energy storage could also be better handled. 
 
Batteries are expensive, but the optimistic view assumes continuing price decline. 
 
Some states may choose to wait before adding a high amount of investment in renewables as energy storage costs may come down, meaning a wait now is more bang for buck later. 
 
Long-term efficiency is not yet known given most batteries at the early point of their lifespan and this lends uncertainty to predictions no longer found in coal and gas planning, he said.