Giles Parkinson, RenewEconomy
The South Australian government’s ground-breaking battery storage tender has generated a huge response from interested parties, with more than 90 proposals submitted in the first fact-finding round, indicating the massive possibilities with the technology.
The first stage of the tender closed last Friday, with several significant projects already outlined – mostly by Australia-based developers in tandem with international battery storage manufacturers, but there were also numerous other proposals that remain under the radar.
Energy minister Tom Koutsantonis told RenewEconomy that the government has received 90 Expressions of Interest from more than ten countries for the battery storage proposal.
‘Evaluation of the EOI is already underway which will lead to a shortlist being asked to participate in a Request for Proposal process,’ he said in an emailed statement.
‘As was outlined in the EOI documentation, we are looking to have a battery in place by December 2017, so the intention is to keep this procurement process moving as quickly as possible.’
One major battery storage manufacturer, which asked to remain anonymous, said it had been contacted by more than 20 interested parties seeking information on costs and installation timetables. It expected many of those queries would have led to submissions.
The storage tender, along with the one being held in Victoria, is expected to be the first in a wave of battery technology investments in Australia, in the same way that ARENA and CEFC programs have kicked off the current spree in large-scale solar.
Along with the closure of the Hazelwood brown coal generator last week, it also underpins the speed of the energy transition that is being witnessed, a fact underlined by the new head of the Australian Energy Market Operator, Audrey Zibelman who has spoken of the shift to a grid focused on distributed generation, storage and smart technologies, rather than building more fossil fuel generators.
This transition is expected to be accelerated by imminent changes in a number of energy market rules that will ‘level the playing field’, including a change from the 30 minute settlement rule to a 5 minute period.
The impact of these changes is already being witnessed in the energy market. AGL Energy, the biggest player in the South Australian market, confirmed on Monday that it would need to change its investment strategy as a result of the government’s new energy plan.
‘As we said to our investors last week, it’s true that our proposed investment blueprint now needs to change, given recent South Australian policy announcements,’ chief executive Andrew Vesey said in a statement.
Those changes are expected to include the canning of an idea to build a new gas plant – considering that the state government intends to build an emergency back-up itself.
AGL is the only major utility to confirm it is putting forward a proposal to the South Australian tender, which has mostly attracted new players to the market – a critical component of any push to encourage new technologies because new players are essential to the emerging market.
Battery majors such as Tesla and LG Chem refused to comment on the record, but are understood to have been involved in multiple proposals, as has another South Korean battery storage manufacturer, Kokam.
This article was first published in RenewEconomy and is republished with permission.