The declining cost of utility, or large-scale, renewables has spurred its rapid development. This new development, combined with the rapid uptake of rooftop solar, has led to energy demand that is ‘peakier’.
This is where there can be a surplus of energy supply in the day when there is lots of wind and solar energy to carry load, followed by a sudden drop in supply when the sun goes down, and demand increases as everyone arrives home, puts the heater on and starts cooking dinner.
This change in the traditional supply/demand dynamic has prompted the need for capacity that firms renewables, otherwise known as ‘firming capacity’. Firming capacity is flexible energy supply that can be activated to top-up supply when the sun isn’t shining or the wind isn’t blowing, or even if there is a sudden concentration in demand.
We perceive this adaptable and flexible energy to be a priority for new energy supply and that is reflected in the projects we’re investing in.
How are we investing in ‘firm supply’?
AGL has about $1.9b of new energy supply projects completed or in construction, with a further $2b in the pipeline. Of these projects, close to 1,000 MW of supply, will provide some of the firming support that our market needs.
- Barker Inlet Power Station: the $295m peaking gas plant in SA can be activated to full capacity in 5 minutes, providing 210 MW of fast-response power when it is complete later in 2019.
- Kanmantoo Pumped Hydro: taking advantage of the Kanmantoo copper mine pit in the Adelaide Hills, this proposed project, currently undergoing feasibility is for a 250-megawatt pumped hydro energy storage project.
- Bells Mountain Pumped Hydro: AGL and Idemitsu have signed an agreement to undertake an engineering feasibility for AGL’s proposed 250MW pumped hydro project at Bells Mountain, near Muswellbrook.
- Newcastle Power Station: Construction of the proposed 252 MW power station is expected to begin after a Final Investment Decision is made by the end of 2020, aiming to deliver the power station by the end of 2022.
- Dalrymple Battery: the 30 MW ESCRI battery on SA’s Yorke Peninsula offers millisecond-response to stabilise and support the power grid – especially in times of crisis.
We have a proud heritage as Australia’s largest private developer of renewable energy assets, and we are well placed to be the biggest developer of the firming capacity we need to support that energy. This will help us meet community expectations and deliver reliable and affordable energy as we transition away from coal-fired generation over the next few decades.
Update: in February 2020, AGL and Hillgrove Resources Limited, which owns the Kanmantoo site, mutually agreed to not continue with the proposed pumped hydro project. However, AGL remains committed to continuing the development of energy storage projects such as batteries and pumped hydro to providing firming capacity to the market.
These projects include a 100 MW battery in Wandoan, Queensland, a 30 MW battery in South Australia, and four 50 MW batteries to be built in NSW. We are also investigating the feasibility of a 250 MW pumped hydro plant at Bells Mountain in NSW, and a 50 MW battery at Broken Hill.