Security of power supply is one of the key issues facing the Australian energy market. The Finkel Review recommended a range of solutions, including Generator Reliability Obligations to firm up supply from variable renewables, e.g. wind farms and solar farms. While batteries may be well suited to firm up variable renewables for 1 to 2 hours, they may not be cost competitive over longer supply periods. Can pumped hydro storage and solar thermal plants coupled with heat storage provide a solution to security of power supply?
The technology works like this.
Pumped hydro energy storage utilises electricity at times of low demand to pump water to an upper reservoir and generates electricity at times of high demand by running water through the turbine to a lower reservoir.
Solar thermal plants use a field of tracking mirrors (heliostats) to concentrate sunlight onto a receiver to generate heat, which in turn is used to generate electricity. Heat can be stored in molten salt tanks and used to generate electricity at a later stage.
These are effectively dispatchable renewables, i.e. they can generate power on demand and for significant periods of time. Depending on storage capacity, pumped hydro storage and solar thermal with heat storage can provide electricity supply on demand for 8 hours and longer. They can also provide ancillary services to ensure stable operation of electricity grid.
I have recently returned from the Renewable Energy, Water and Technology Trade Mission to Israel. Often compared to Silicon Valley, Israel has an impressive culture of innovation supported by strong academic resources, government funding for research and technology commercialisation, and a whole ecosystem for start-up companies.
Israel has invested heavily in the development of pumped hydro storage and solar thermal energy to address supply security while transitioning their generation portfolio to renewable energy sources.
Two projects of note are:
Australia is starting to catch up in the deployment of these technologies. Several feasibility studies for pumped hydro are under way, including Snowy 2.0, Battery of the Nation by Hydro Tasmania, Kidston proposed by Genex, and Cultana proposed by EnergyAustralia.
The Cultana Pumped Hydro Project in South Australia is based on the use of seawater – an innovative concept, given limited suitable freshwater resources in Australia. The initial feasibility study* has found the proposed 225MW project with storage capacity of 1770MWh is technically feasible, economically viable under a range of scenarios, and can address the market need for energy supply firming to facilitate the growth of renewable energy in South Australia.
South Australia is seeking to add a solar thermal plant to its generation. The SA Government has recently entered into an agreement with SolarReserve for the development of a net 135MW solar thermal project with heat storage at an estimated cost of $650 million to be completed in 2020.
While solar thermal with heat storage has a significantly higher cost and development risk as compared to wind and solar PV, at the current high gas prices, it is already starting to compete with gas-fired generation. Similarly, feasibility studies on pumped hydro storage also suggest it can provide a cost competitive source of firming energy supply.
As costs and risks of these technologies decline with increasing worldwide deployment, pumped hydro storage and solar thermal are expected to play an important role in Australia’s transition to renewable and reliable generation mix.
* KPMG assisted EnergyAustralia with this feasibility study.