Source: Institute for Energy Economics and Financial Analysis
The growth in number of big batteries in Australia’s main grid is displacing coal generation as a provider of frequency control and ancillary services (FCAS) markets, and helping reduce overall costs, according to the Australian Energy Market Operator.
In its latest Quarterly Energy Dynamics report, AEMO says batteries have increased their share of key FCAS markets from 10 per cent in the last quarter of 2018 to 17 per cent in the first quarter of 2019, thanks to the recent addition of the Dalrymple battery storage plant in South Australia and the Ballarat battery storage facility in Victoria. Another interesting development is the increased share in the FCAS market for demand response services, which has upped its share from just under 10 per cent a year ago to 15 per cent now.
That gives a 35 per cent share to “new technologies” and has in turn eaten into the share of the traditional coal generators, which have fallen from near 45 per cent to around 28 per cent.
This – along with increased supply from hydro generators, including the Wivenhoe pumped storage supply in Queensland – helped overall costs fall by around 33 per cent from the last quarter to $36.4 million. Most of the cost reductions occurred in the contingency raise section of the FCAS market.
AEMO notes that both pumped hydro and batteries have increased the amount of charging and pumping during the middle of the day, especially during the solar noon, soaking up the sponge of high solar output.
Interestingly, batteries have also found a profitable new market during the morning (meeting early morning demand around 06:00-07:00), with both pumped hydro and batteries increasing generation during the evening peak.