The much anticipated Finkel Review ( Independent Review into the Future Security of the Australian National Electricity Market by Dr Alan Finkel) was released on Friday 9 June 2017.
The report highlights that storage will play a significant role in reliability and security. Our thermal energy storage system (TESS) is incredibly relevant and provides an answer to many of the current challenges as highlighted below. These are Dr Kevin Moriarty’s key thoughts after reading the report.
- If adopted the Finkel recommendations would lead to renewable generation increasing from 17% to over 40% of supply by 2030, requiring a great increase of energy storage to provide reliability.
- Although battery systems providers believe it will boost their market, Finkel points out the downsides of batteries – high cost, short life and environmental issues from their components. He points out that pumped hydro could be better but there are few suitable locations. The 1414 Degrees TESS has none of these disadvantages, with long life, no toxic components, and ability to be located where needed. The 1414 Degrees device can be called “pumped thermal” storage.
- The Finkel Report emphasises that energy security needs synchronous inertia – favouring gas and coal generation. Coupled with the 1414 Degrees TESS, renewable projects can provide these and remove the need for a large proportion of coal or gas generation.
- The storage solution must be low cost to deliver the benefits of cheap renewable power to consumers. Our vision is 1414 Degrees distributed storage coupled with heat offtake by industries or urban complexes to increase efficiency. The barrier to grid solutions is the double dip by transmission providers charging for input and output, so regulation needs to change. A systems use of storage charge (SUoS) like the existing charges, TUoS and DUoS, should be implemented, but storage should be rewarded by deducting SUoS from the existing charges.
- Electricity prices should benefit from increased renewable supply because the need for high cost long distance transmission will reduce as generation is distributed through the grid. Introducing transmission storage charges will further reduce network infrastructure needs and justifications for upgrades should fall. The regulators will need to push providers as they have a disincentive under the current arrangements. The Finkel Report does not offer any clear improvements from lower transmission costs, mainly because the current battery and pumped hydro solutions are costly and limited in options.
- Commentators expect gas to be favoured under the recommendations of the Finkel Report to achieve synchronous inertia. Gas has lower emissions, but its supply in Australia has been artificially constrained by governments so that cost of electricity from gas generation in higher than coal. 1414 Degrees devices can burn gas so they can provide reliable power when renewable generation is limited. This will reduce the need to build gas fired generation plants for base load synchronous power.
- The 1414 Degrees solution is revolutionary, but it will not feature in market assessment like the Finkel Report until the first commercial sized modules are built. 1414 Degrees estimates that its engineers can build the first commercial sized 10MWh and 200MWh modules for only $20m with rebates. And production models will cost less. This work is underway at Tonsley Park in SA, with the first 10MWh ready early in 2018, followed by the first cell of the 200MWh in mid 2018.
The report was released Friday 9 June 2017 and can be viewed here: http://www.environment.gov.au/energy/publications/electricity-market-final-report