Energy storage is becoming a prime concern in Australia. In its 2021/22 budget, the Federal Government announced it would invest AUD1.6 billion in priority technologies, including clean hydrogen and electricity storage.
Meanwhile, the cost of batteries is dropping sharply. Battery pack prices were recently reported below USD100/kWh for the first time, although the average remains higher.
“Lithium-ion battery pack prices, which were above USD1,100 per kilowatt-hour in 2010, have fallen 89% in real terms to USD137/kWh in 2020”, research company BloombergNEF (BNEF) reports.
“By 2023, average prices will be close to USD100/kWh.”
Development in this field is taking place at breakneck speed, as energy storage solutions are increasingly significant in moving toward a renewable energy future.
Utility-Scale Battery Storage Project Costs in Australia
Renewable energy developer Maoneng in Australia is working to install utility-scale batteries at costs ranging from USD80 million for the smallest to USD150 million for the largest, to power Australian homes.
Various factors aside from scale can influence capital expenditure.
One driver is the stringency of the specifications for the battery components, according to Maoneng Director of Engineering Michael Tran.
Batteries that need to operate 24/7 will have different safety specifications than batteries that only operate during certain hours.
“It requires more monitoring equipment, and a more rigorous operation and maintenance regime has to be implemented,” Mr. Tran explained. And that drives up cost.
Some risks and liabilities need to be accounted for, such as potential delays during the construction phase, issues with grid connections, or environmental clearances that need to be obtained.
Maoneng’s 480 MWh Battery Energy Storage System in Victoria
Maoneng’s current pilot project is a 480 MWh utility-scale battery energy storage system in Victoria’s Mornington Peninsula, designed to power 40,000 homes at peak hours. The project is scheduled for completion in 2022 and is expected to cost roughly USD120 million.
According to BNEF’s forecast, the cost of such large-scale solutions will continue to decline, albeit not as dramatically as the cost of batteries.
The actual battery accounts for only 50% to 60% of the total cost of a turnkey solution. The remainder includes engineering, transport, installation, connecting the battery to power control units, and testing. These costs are likely to remain stable.
However, renewable energy, combined with viable storage solutions, is already cheaper than electricity from fossil fuels.
Regional Australia Embraces Renewable Energy and Battery Storage for Reliability
Even small country towns are embracing a combination of renewable energy and battery power, with Yackandandah in northeast Victoria having recently shipped in its first battery to connect to solar. In remote communities, batteries not only provide cheaper power but also security.
“If the main electricity line does go down, we can still keep running essential services for a period of time. So, it’s about reliability, it’s about resilience,” Totally Renewable Yackandandah president Juliette Milbank told the ABC in a recent story about the take-up of renewable energy in regional Australia.
Created for the Australian Maoneng Group’s Transcendence Network for publication in May 2021.