Alan Kohler: Long-duration energy storage systems are writing coal’s death certificate
We may be sitting on the green energy missing link – don’t tell the Coalition. Photo: TND
Australia is sprinting towards 100 per cent renewable energy, 24/7, 365 days a year, but very few are ready for it, least of all the coal industry and its subsidiary, the Morrison government.
Once the “dispatchable power” work of coal and gas-fired power stations is lost they will all promptly close, since they can’t compete on cost with renewables, even without a price on carbon.
It could happen as early as 2030, but by 2040 at the latest, thanks to the creation of the Long Duration Energy Storage Council at the Glasgow climate change conference, which was the most important – but least known – result of COP26.
The Glasgow headlines were about the failure of 2030 targets, but the formation of the LDES Council and a report it commissioned from McKinsey & Co are accelerating the rush towards building storage that will enable 24-hour dispatchable renewable power.
And Australia is turning out to be a quiet global laboratory for a variety of long-duration storage solutions because of an abundance of holes in the ground, as well as our sunshine and wind.
The holes – that is old mines, both underground and open pit – are useful for holding air and water, which are two of the main methods of creating LDES.
Air is compressed into an old mineshaft using renewable energy and drives a turbine when it’s released; with pumped hydro, water is pumped uphill to an old open-cut mine and drives a turbine when it’s released to flow downhill to another one.
Scott Morrison’s love for coal has blinded him to revolutionary advances in the long-term storage of green energy. Photo: AAP
Change is in the air
In its report for the LDES Council, McKinsey said that in 2030, LDES can be cost competitive against lithium-ion batteries for durations above six hours, with a distinctive advantage above nine hours.
But it also says “market support mechanisms and regulatory incentives” are needed in the short term to “unlock the competitiveness of certain business cases and attract the necessary private capital”.
And indeed, the Australian Renewable Energy Agency has supported six grid-scale batteries, including several pumped hydro and compressed air efforts, and has just announced a $100 million competitive funding round focused on large scale 50+MW batteries with the ability to stabilise the grid (without coal).
Perhaps no one has told the government it is funding projects that will hasten the demise of coal even as it tells the coal industry all is well. In which case we’d better keep this column to ourselves.
The problem with lithium batteries is that they only go for about four hours, which is fine for shifting power from the middle of the day to the evening, when households are running stoves, TVs and air-conditioners, but it doesn’t work for industries such as smelting that run all night and need continuous, reliable electricity – dispatchable power, as they say.
The coal industry is pinning its hopes on that job to keep the belching generators going for a few more decades, but the LDES Council and its members have other ideas.
A Canadian firm named Hydrostor, backed by Goldman Sachs, is the global leader in compressed air storage, and is planning to use a disused mine in Broken Hill as the first in Australia, in partnership with local renewable energy developer Energy Estate.
They expect to reach financial close on the project soon and be up and running after that.
Simon Currie, one of the principals of Energy Estate, says there are plenty of old mines around Australia that can be used to store compressed air.
The best place to locate them, he says, will be where high-voltage transmission lines already exist, such as the Latrobe Valley and the Hunter Valley, where the NSW government is setting up a renewable energy precinct.
Mirror arrays’ bright future
Elsewhere, two quite different projects are under way in Mildura and Mount Isa using concentrated solar – that is, mirrors that focus the sun’s rays to generate heat.
In Mildura, a Melbourne firm called RayGen, backed by ARENA, is going to heat water to 90 degrees, which is stored in an insulated pit.
A second pit will store water chilled to near freezing using excess power from solar panels. That temperature difference allows electricity to be generated using something called an Organic Rankine Cycle (ORC) turbine, which transforms thermal energy into electricity.
In Mount Isa, another local company, Vast Solar, is using molten salt to store the energy from the mirrors that concentrate the sun’s heat.
And an Adelaide-based ASX listed company called 1414 Degrees is developing a system that uses molten silicon to store energy for long duration storage.
In Gladstone, Queensland, Sunshine Hydro has spent seven years developing algorithms and artificial intelligence that will run an integrated pumped hydro and hydrogen system.
Managing director Rick McIlhenny says they’re building three projects that will replace the two Callide coal-fired power stations and a gas-fired generator.
“Our algorithms mean we can guarantee 24/7, 365 days a year power to industrial users,” he says.
“Our purpose is to decarbonise the world.”
These are just a few of the long duration storage projects under way in Australia, most of them supported by ARENA.
Just don’t tell the government.
Alan Kohler writes twice a week for The New Daily. He is also editor in chief of Eureka Report and finance presenter on ABC news