Large-scale battery storage is expected to grow exponentially in the coming decades. Coupling batteries with renewable energy projects is an essential part of Australia’s transition from an electricity system dominated by large, centralised synchronous thermal generators to a more distributed generation fleet with a growing proportion of variable renewable energy sources. Currently, the number of projects announced dwarfs those operational and under construction. As seen in Figure 1, the market for batteries has been buoyant in recent times. This is especially apparent following the release of Australian Energy Market Operator’s (AEMO) recent blueprint for the energy system of tomorrow, the Integrated System plan 2020 (ISP).
Using project information sourced from Energetics’ market-leading research and AEMO’s system data, there is circa 299MW of operational grid-connected battery storage projects in the NEM, with a further 20MW under construction, and circa 8,296MW announced or in planning.
Figure 1: Current battery storage projects
The outlook for the market for large-scale batteries: AEMO’s forecast
AEMO’s Integrated System Plan 2020 forecasted grid scale battery storage reaching 5GW by 2025, and 19GW by 2040 under the Central Scenario. At present the total grid-scale battery capacity in operation or under construction (i.e. committed investment) comes to 331MW. However, when you add the new battery projects announced, this pushes the total shallow battery storage capacity to 8GW. Many investors announcing new projects may therefore be overexuberant.
As seen in Figure 2, AEMO's Central Scenario appears to be on track to becoming obsolete given the number of battery storage developments that have been announced. While not all of these will get over the line, the current announced total of circa 8GW is the equivalent of where AEMO forecasts Australia to be at the end of the decade under a 'High DER' scenario. This highlights the immense interest in storage, but also emphasises that many projects announced at this stage of the market's development should be considered with a degree of caution.
Figure 2: Dispatchable battery storage forecast (based on publicly available data)
Number, size and locations of current grid-connected battery developments
As seen in Figure 3, the Hornsdale Reserve system is the market leader at 150MW. All other batteries either under construction or operational, average a capacity of circa 15MW (one tenth of Hornsdale).
Figure 3: Current operational and under development battery systems
Insights and resources
Download our insights on storage and it's role in the future of the NEM
These insight articles examine the role that storage plays in addressing shape and performance risk as well as the role of storage in the future of the NEM.
ARENA Storage Knowledge BankIssued: November 2019
Large-Scale batteries are an important technology for providing reliability and stability in a high renewable electricity system, as is being developed in Australia. While the Large-Scale Battery Storage (LSBS) industry is in its early stages, the batteries which have been developed to date represent a variety of technical and commercial cases.
The Australian Renewable Energy Agency’s (ARENA) Storage Knowledge Bank is valuable source of the latest reports on lessons and innovation opportunities for LSBS projects in Australia based on specific project insights gathered through ARENA funded projects.
Australian Energy Storage Market AnalysisIssued: September 2018
This report is a comprehensive analysis of the Australian energy storage market, covering residential, commercial, large-scale, on-grid, off-grid and micro-grid energy storage. The report assesses the current state of energy storage and makes projections for uptake from 2017 to 2020.
RMI Breakthrough Batteries - Powering the Era of Clean ElectrificationIssued: October 2019
Recent rapid improvements in lithium-ion (Li-ion) battery costs and performance, coupled with growing demand for electric vehicles (EVs) and increased renewable energy generation, have unleashed massive investments in the advanced battery technology ecosystem.
RMI’s analysis identifies the implications of these breakthrough battery technologies for investors, regulators, policymakers, and other energy industry players, and identifies risk mitigation and investment strategies that can reduce potential stranded asset risks. It outlines strategies to encourage faster adoption and globally scaled manufacturing of innovative battery and storage technology ecosystems.