Introduction
New South Wales (NSW) is on a mission to replace its coal fired power stations with battery storage and renewable generation solutions, and may have found a solution to avoid electricity supply gaps while saving taxpayers hundreds of millions of dollars.
How is this possible? And what can we learn from it?
That is what we’ll explore in this article, but for now, here are a the few factors as shared by the Clean Energy Council referencing that outlines this opportunity:
- The Federal and State Governments are supporting battery storage systems and large-scale renewable generation projects.
- There has been a lower than expected increase in year-over-year electricity demand.
- The cost to keeping coal-fired power stations open is increasing due to carbon offset requirements.
For this article we’ll look at how NSW is approaching this transition to ensure reliable energy supply and how their methodology can be applied to other regions or countries that are undergoing electrification.
Know the Region's Energy Requirements
The first step is to know how much energy the power stations are currently supplying in order to know how much needs to be replaced and what the expected demand is in future.
In the case of NSW, a significant amount of the transition has already taken place as the state prepares to replace energy produced at Eraring station - Australia’s largest power station rated at 2,880-megawatt - with renewable generation and battery storage.
Thankfully, the forecast increases in energy demand came in significantly lower than expected (0.6% instead of 2.7%), and while the energy security target is still set to increase each year, this AEMOs report outlines multiple scenarios in which great execution of the transition can lead to an energy surplus and completely avoid deficits throughout the transition.
Energy security is the critical factor and a number of projects including the Waratah Super Battery is rated at 850MW/1,680MW are being constructed which will work in conjunction with Origin’s 700MW/2,800MWh battery at the Eraring site, which will replace a portion of the energy losses when the plant goes offline. AGL also reached the final stage of investment on its 500MW/1,000MWh battery that will be built on the site of the Liddell power plant that shut down in April 2023.
In addition to some wind farms that have been recommended to be approved, the coal-fired power station output can be replaced with a mix of renewable energy and storage technologies without creating energy deficits.
Look at the life expectancy and ongoing costs for continued use of existing fossil fuel infrastructure
Timing is an important factor in this transition. There must be enough energy in the mix before taking large power plants offline and the rising operational costs of fossil fuel plans need to be carefully considered.
Extending the operation of Eraring past the 2025 closure date could cost $1.7 billion a year in economic, social and environmental damages as the plant will be required to offset the 10 million tonnes of carbon emissions - at least some of these cost would be passed on to taxpayers.
As this infrastructure ages and the cost of carbon increases, continuing to operate Eraring Power Station further into the future will lead to further increases in cost and become financially unsustainable.
Thankfully, renewables are becoming more cost-effective and efficient and now more than capable of providing the energy needed to supersede the aged coal-fired power plants.
Repurposing of old power stations
Building large scale battery storage systems at the existing sites means that the existing connections to the HV network and substations can be leveraged. This smart selection of location reduces the cost infrastructure costs, however what happens with the existing buildings are jobs must be careful considered.
Adopt and efficiently navigate financing, approval and construction processes.
Efficient processes are required by developers, consultants and governments to ensure all parties involved effectively use time and all modes of capital. The more efficient the processes are navigated, the faster and better the result.
The roadmaps proposed must be completed in specified times as there are large potential consequences for delays. AEMO’s report makes it clear that delays during critical stages could result in a deficit of energy supply and bring the state into energy insecurity leading to potential blackouts and increased costs.
It’s reasons like this that leaders of projects choose to leverage the expertise of independent consultants like Enhar, who helps streamline the projects from the planning, through to financing and approval to construction.
Conclusion
Effectively navigating the transition to renewables involves a number of factors including the timeline of shutdowns of coal-fired power stations, processes and procedures and energy requirements.
Enhar has been working on several large scale battery project opportunities in NSW which enable the region to firm its renewable generation and is currently working on several 2-4 hour lithium storage projects in addition to some longer duration flow battery projects.
Enhar is also involved in land and permits for solar farms in NSW and also Victoria, South Australia and Queensland.
Our team are seasoned veterans in the space and can analyse location opportunities, negotiate land agreements, secure development approvals and prepare engineering designs as well as providing due diligence services too.
Get in touch with Demian if you are developing or acquiring solar farm and battery projects. Enhar would be delighted to assist you in reaching financial close faster.
