Energy storage is a tricky issue.
It is fundamental to management of the grid as the proportion of “variable” renewable energy increases.
Its economics are sensitive to the gap between high and low prices, its “round trip” efficiency, and its capacity to capture income from value adding services that stabilise the grid during transient events.
But more investment in storage means less revenue for each storage operator. Developers of large pumped hydro schemes and advocates for renewable hydrogen recognise that it will be difficult to compete with batteries, smaller pumped hydro and demand response to capture value from short-duration peaks and troughs in demand.
Accordingly, they are focusing increasingly on supporting seasonal variation as their core role. Hydro operators and hydrogen producers want to capture excess low-priced seasonal renewable electricity, then generate during supply shortages when prices are higher.
In light of all this, the above graph from the AEMO’s recently published Integrated System Plan is significant. It maps out how a seasonal storage plant might operate.
However, it also highlights—again—that Australian energy policy makers and investors lack focus on the demand side of the energy equation.
It is mainly demand side factors that drive the need for autumn top-up, along with heavy drawdown in winter due to limited solar generation, and the need for storage to build up during the summer.
We must therefore ask what activities are contributing to high demand. What potential is there for energy efficiency to reduce the seasonal variation in demand, not just the short-term peaks?
AEMO’s graph highlights a number of possibilities. The major factors underlying seasonal variation are poorly performing buildings, and inefficient heating and cooling equipment.
These include thermally disastrous buildings (both residential and commercial), widespread use of resistive electric heating and inefficient air conditioners, inefficient lighting, open shop doors, heat loss from poorly insulated hot water tanks and pipes, unnecessary use of pool filter pumps, inefficient industrial processes and so on.
Addressing these would reduce seasonal variation, along with the need for the seasonal storage and seasonal hydrogen-sourced generation shown in AEMO’s graph.
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