The Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA) will work together to speed up the development of flexible capacity and large-scale storage projects that secure energy supply and better integrate renewable energy sources.
ARENA CEO, Ivor Frischknecht, said ARENA would call for Expressions of Interest (EoI) for demonstration projects under its Advancing Renewables Program (ARP). It is expected that ARENA would allocate at least $20 million to the successful projects.
Eligible projects are those which provide flexible capacity to the system such as battery storage, pumped hydro, concentrated solar thermal, biomass and demand management technology.
Mr Frischknecht said, “As ARENA and the CEFC work to accelerate Australia’s shift to an affordable and reliable renewable energy future, we know that the energy sector and the whole economy face a range of challenges in ensuring it is an orderly transition.
“Developing large-scale flexible capacity projects, such as grid scale batteries and pumped hydro, will be a crucial part of the solution.”
CEFC CEO, Oliver Yates, said the CEFC would provide successful ARENA funding recipients with the opportunity to secure long-term debt finance to support their projects.
The CEFC was also open to considering finance solutions for other projects not seeking ARENA funding. CEFC finance would be provided along similar terms to its $250 million commitment to accelerate large-scale solar.
Mr Yates said, “The cost of generating energy from wind and solar has come down fast and is continuing to decline. If we are to maximise Australia’s strategic national competitive advantage in clean energy, we need to complement this with energy storage and grid stability services.
“Working together, ARENA and the CEFC are looking forward to helping accelerate the development of flexible capacity projects that will further strengthen our electricity grid, delivering lower emissions and lower costs.”
Mr Yates said Australia was a lucky country that was blessed with diverse renewable energy resources across the nation that could produce power at different times.
“Electricity is easy and fast to move from one place to another with appropriate grid infrastructure. When we complement renewable generation with the addition of energy storage and grid support, we can develop an electricity supply that is cost-effective, reliable, clean and secure.”
Mr Frischknecht said ARENA and the CEFC were already discussing flexible capacity projects with several potential proponents.
In addition, ARENA has funded a number of projects featuring large-scale storage elements, such as:
- The AGL Virtual Power Plant (which will aggregate 1,000 household batteries in Adelaide to provide grid support)
- Lakeland Solar Farm and Kennedy Energy Park (which combine battery storage with solar and/or wind generation)
- The Kidston Pumped Hydro Storage Feasibility Study
- A national off-river pumped hydro resource mapping study being led by Professor Andrew Blakers at the ANU
“The decision to place greater focus on supporting storage and other flexible capacity projects builds on this existing work,” Mr Frischknecht said.
ARENA and the CEFC agree that demonstration projects provide knowledge and momentum, which will then allow the two organisations to develop a framework for a flexible capacity or large-scale storage funding round.
“The intention, as is always the case with ARENA and the CEFC, is to accelerate a technology’s path to commerciality as quickly as possible and then step away,” Mr Frischknecht said.
ARENA project proposals will be assessed under the existing ARP assessment framework.
Prime Minister, Malcolm Turnbull said energy storage had long been neglected in Australia and would be a priority in 2017.
Mr Turnbull said, “Large-scale storage will support variable renewables like wind and solar. It will get more value out of existing baseload generation and it will enhance grid stability. We’re going to get on with it.”
Federal Minister for the Environment and Energy, Josh Frydenberg, said ARENA and the CEFC’s future priorities would be informed by the Finkel Review into the Future Security of the National Electricity Market and the CSIRO Low Emissions Technology Roadmap.
Mr Frydenberg said ARENA and the CEFC would also look to support related innovative technologies that boost the stability of the electricity grid – such as advanced control systems, smart grids and demand response measures, which was consistent with other measures being considered by the government to enhance energy security.
Mr Frydenberg said the Australian Government’s number one energy policy priority was energy security and stability.
