Australian Opportunities in Energy Storage

WEBINAR
22 March 2018
DAVID URRY
SENIOR INVESTMENT MANAGER
AUSTRALIAN TRADE & INVESTMENT COMMISSION, BERLIN

E: david.urry@austrade.gov.au
AUSTRALIAN OPPORTUNITIES IN ENERGY STORAGE

THE PANEL

Mary Hendriks Josh Carmichael

Investment Director
Industry Executive
Dept. Premier and Cabinet South
Australian Energy Storage Alliance
Australian Government
Dan Sturrock Oliver Koch
Investment Director
COO
Australian Renewable Energy
sonnen Group
Agency

Alison Dodd David Urry

Senior Investment Manager
Executive Counsel
Australian Trade & Investment
Herbert Smith Freehills
Commission

WEBINAR: Australian Opportunities in Energy Storage 3

SETTING THE SCENE
THE AUSTRALIAN TRADE AND INVESTMENT COMMISSION
ENERGY STORAGE IN AUSTRALIA
HELPING COMPANIES ESTABLISH OR EXPAND IN AUSTRALIA

The Australian Trade & Investment Commission provides

international investors with the support needed to create a business
case to invest in Australia

Services for investors include:

 Complimentary, confidential assistance,
 Initial coordination of investment enquiries and assistance,
 Information on the Australian business and regulatory environment,
 Market intelligence and investment opportunities,
 Identification of suitable investment locations and partners in Australia,
 Advice on Australian government programmes and approval processes.

An introduction to the Australian Trade and Investment Commission 6

AUSTRADE’S NETWORK

An introduction to the Australian Trade and Investment Commission 7

ENERGY STORAGE PROJECTS TRIPLED BETWEEN 2015 - 2017

The amount of
energy storage
projects
announced/ sold
globally has almost
tripled between
2015 - 2017

WEBINAR: Australian Opportunities in Energy Storage 8

MARY HENDRIKS
INDUSTRY EXECUTIVE
AUSTRALIAN ENERGY STORAGE ALLIANCE (AESA)
Australian Energy Storage Alliance (AESA)

• Industry member based group

EnergyStorageAlliance.com.au

Twitter @AESAlliance

• AESA Mission:
…to advance the uptake of safe, clean and cost-
effective energy storage in Australia and New Zealand.
 Among Leaders in Energy Storage Uptake
Bloomberg NEF ‘Energy Storage Forecast 2017-30’ lists Australia as “one of 8
countries expected to lead massive boom in global energy storage uptake” to 2030

Bloomberg NEF ‘Energy Storage Forecast 2017-30’

Via RenewEconomy
WHERE are the Opportunities?

• Residential

• Utility / Grid Scale

• C&I Projects & Microgrids

 WHERE are the Opportunities?

Residential
Australians have installed solar PV on 1.7 million rooftops
(approx 30% penetration in SA and QLD)
Battery Storage, SA & ACT incentives, DER pilot project ARENA $12.5M

OPPORTUNITY: ES combined with Energy Management

Virtual Power Plant (VPP’s) innovative software ( trials in SA & QLD)
Proposed solar + storage community housing VPP in South Australia
Demand management via locally generated/stored renewable energy
Sample battery setup at SA
Power Networks Innovation
Centre
 WHERE are the Opportunities?

Utility / Grid Scale

Mainly distributed large scale Energy Storage
To avoid infrastructure upgrades + manage peak demand
At fringe-of-grid, in conjunction with local NSP

OPPORTUNITY: ES with Renewable Energy, Guarantee of Supply

Drivers are Power Purchase Agreements, FCAS
• Largest Lithium Battery Site – Hornsdale Power Reserve, SA
• First Solar plus Pumped Hydro Site – Kidston, QLD
The Australian Energy Market • SolarReserve’s Aurora Solar CSP plant, SA (under construction)
Commission (AEMC) makes
& amends the National
Electricity Rules that underpin
the NEM
 WHERE are the Opportunities?
Mackerel Islands Tourist
Resort in (WA) built 325 kW
solar system with 640 kWh
lithium ion storage
C&I Projects & Microgrids
Mining sites, remote communities, islands
Urban microgrids for energy security
Built environment and heavy industry
OPPORTUNITY: ES for Local Power, Energy Security
Horizon Power, WA, developing regional microgrids, eg ONSLOW
Remote towns and mining sites for diesel reduction, cost saving
Resorts or island communities, eg King Island
C&I, eg agriculture, Whyalla Steelworks
WHERE are the Opportunities?

Other Opportunities
Storage of Hydrogen / Refueling (State Projects)
Centralized energy storage eg Snowy Hydro 2.0
Electric vehicle charging infrastructure

OPPORTUNITY: ES for unique opportunities

Driven by government or industry
• Proposed Hydrogen SuperHub in SA, to produce for export
• Centralized ES subject to federal policy decisions
• EV’s depends on uptake, public transport, heavy vehicles
 WHAT ARE THE CHALLENGES?

Federal Policy Review- States setting targets

Reviews by CSIRO, Energy Transition Road Map
Report on the NEM by Dr Alan Finkel, Chief Scientist
National Energy Guarantee (NEG) policy under Review

OPPORTUNITIES for Investment, Securing Partnerships

Drivers of Policy
• Energy prices rises in past six years
• Energy security issues resulting from blackouts
• Need for certainty for investment
Alan Finkel - Wikipedia
Australia is a Diverse Market for Energy Storage
Offering investment opportunities in many areas, especially for
distributed energy storage

Drivers are uptake of solar PV, phase out of coal fired generation, high
cost of power, development of smart systems, power purchase
agreements and issues relating to security of supply.

To Find out More:

Australian Energy Storage Alliance

http://energystoragealliance.com.au

Australian Energy Storage Conference & Exhibition

ADELAIDE, S.A 23&24 May 2108
http://www.australianenergystorage.com.au/

Details supplied in this presentation are not an endorsement of any product or service
 DAN STURROCK
INVESTMENT DIRECTOR
AUSTRALIAN RENEWABLE ENERGY AGENCY (ARENA)

WEBINAR: Australian Opportunities in Energy Storage 19

Accelerating Australia’s Shift to
an Affordable and Reliable
Renewable Energy Future
March 2018
Introduction to ARENA
Australia’s Transition to VRE
● Changing mix of generation
Increase in VRE
penetration ● Variable and non-synchronous
generation expected to increase
overtime

● Retirement of coal-fired power

stations

● Distributed resources to drive

significant growth

● Storage will be key in transition

 Policy Update - National Energy Guarantee (NEG)
“By 2030, 28-36% of electricity
generation will be renewable energy,
with 24% VRE (wind/solar) and the
remainder dispatchable hydro.”
● Finkel’s recommendation of a Clean Energy Target
(CET) was not accepted by the Government
● National Energy Guarantee (NEG) contains two new
obligations on electricity retailers:
● The NEG is similar to Finkel’s GRO/ESO whereby new
generators required to bring forward dispatchable
capacity to the market in certain regions and to develop
and implement frequency control, system strength and
technical performance capabilities.
Importance of Storage
 Selected ARENA energy storage projects

1 Pumped Hydro

2 On-grid batteries
Victorian Batteries ESCRI

3 CST

4 VPPs
 ALISON DODD
EXECUTIVE COUNSEL
INFRASTRUCTURE PROJECTS AND RENEWABLE ENERGY LAW
HERBERT SMITH FREEHILLS

WEBINAR: Australian Opportunities in Energy Storage 26

Commercial drivers

FREQUENCY
CONTROL
NETWORK
ARBITRAGE ANCILLARY FIRMING
SUPPORT
SERVICES
(FCAS)

// 28
Tesla Battery:
Contingency FCAS Response

Source: http://reneweconomy.com.au/tesla-says-energy-security-board-needs-to-catch-up-with-battery-technology-25939/

// 29
Licensing requirements –
Jurisdictional
QLD –
Department of
Natural
Resources,
Mines and
Energy

TAS –
VIC –
Tasmanian
Essential
Economic
Services
Regulator
Commission

WHO
REGULATES
LICENSING OF
ELECTRICITY
GENERATORS
RETAILERS?

SA – Essential
NT – Utilities
Services
Commission
Commission

WA –
Economic
Regulation
Authority

// 30
Licensing requirements –
NEM and NER

NEM REGISTRATION:
NEM REGISTRATION:
Market Customer
Ancillary Service Provider
NEM REGISTRATION: Allows for purchase of
Generator Allows the owner to offer
electricity from other
and provide market ancillary
generators to charge the
services
battery when required

// 31
Upcoming Changes to the Regulatory Framework
in Australia

5 minute settlement National Energy

periods Guarantee
• Settlement period for electricity • Retailers contract with
spot prices decreased to 5 generators/demand response
minutes (from 30 minutes) providers must meet:
• Change to commence in 2021 • Reliability targets
• Provides better price signal for • Emission targets
investment in fast response • Clear investment signal to build
technologies, such as batteries the cleanest, cheapest and
most reliable energy generation

// 32
 JOSHUA CARMICHAEL
DIRECTOR LOW CARBON ECONOMY UNIT
DEPARTMENT OF THE PREMIER AND CABINET SOUTH AUSTRALIAN
GOVERNMENT

WEBINAR: Australian Opportunities in Energy Storage 35

SA Market Characteristics

National Electricity Market

(NEM)
Declining share of local, scheduled SA generation…

Red Dolphin Systems 100% 100%

90% 90%

80% 80%

$61.18 70% 70%

Share of SA electricity demand

60% 60%

50% 50%
$78.69 89
40% 40%
742
30% 30%

20% 20%
57
$68.47 10% 10%

9 709 0% 0%

Financial year end

213
Brown Coal Gas Wind Imports Local dispatchable
$78.94
$75.28 Installed Generation Capacity: 4358 (2613 Gas, 1595 Wind, 800
Rooftop Solar)
Demand (approximate): Minimum 500, Maximum 2800, Average 1400

Source: AEMO (June 2017), Red Dolphin,

Electranet
Event Timeline
Energy Plan March 2017
Project Timeline
 Key Considerations

Government objectives: Result:

• Customer focus • Reserved and Market Capacities
(power and energy)
• Security
– 70 MW Government Reserved
• Reliability
Capacity
• Affordability
– 30 MW Market Capacity
• Achieve all at the same time?

Balancing Priorities:
• What’s possible, ideal,
problematic: Must vs. Nice to have

Slide 41
Opportunities and Challenges

December 1 Timeline and 100 MW size

• Deadline brought challenges and risk but also helped decision making
• Worlds largest (Lithium Ion) battery, global competitive Interest
• Real direct immediate impact on SA system security and ancillary services
markets
Lessons Learnt

Key elements to successful outcomes

• Robust procurement processes

• Dedicated team with key expertise
• Stakeholder engagement

Looking forward

• Batteries have arrived as part of the

energy mix
• Markets need to evolve to meet the
transition
• Significant economic advantages for
early movers
 OLIVER KOCH
COO
SONNEN GROUP

WEBINAR: Australian Opportunities in Energy Storage 44

sonnen Introduction
Global leader for residential storage and pioneer in the field of innovative energy products

• Global market leader for residential

battery storage systems
London, UK
• One of the fastest growing Berlin, DE (DACH Sales & Marketing)
Wildpoldsried, DE (Global HQ)
technology companies in Germany Los Angeles, Bergamo, IT
CA Atlanta,GA
• Over 35,000 installed battery
storage units around the world
• Pioneer in providing innovative
power offers to end customers with Sydney,
over 7.000 subscriber to date AUS
Global headcount: approx. 450 employees
Office location Active geography

46

sonnenbatterie.de
The sonnenBatterie at a glance
Fully integrated residential energy storage system
Power Electronic

Battery

Energy
Manager
(Touch
Disyplay) • Capacity: 2 – 16 kWh
• Easy and cheap to install: Plug & Play • Power: 2,5 – 10 kW
• Service-friendly (manufacturer should know if something goes
• Size (H/W/D) in cm: 184/67/23
wrong before the customer does)
• Customer have the possibility to adapt capacity to changing needs

sonnenbatterie.de
 Application potential
Only storages "Behind the Meter" can exploit the entire storage potential

PV Self- Renewables
Consumption Trading

Customer services Backup Energy services

Power

Service not Energy

possible
Arbitrage
Service not
Demand possible

Charge
Reduction

Time-of- Demand
Use Response
Shifting

Ancillary Transmission &

Services Distribution,
Deferral & Relief

Source: Rocky Mountain Institute (October 2015)

Grid services 48

sonnenbatterie.de
Case study: sonnenFlat
Additional revenues through grid stabilization enables storage companies to offer game changing
energy products like 0 € electricity costs

• Largest distributed network of energy storage systems in the world

• sonnen is the first player that intelligently aggregates residential storage systems for grid services (Virtual Power
Plant)
• Grid services enable sonnen to offer 0 € electricity cost power products
49
• Long-term customer lock-in through hardware-sales + service contract
sonnenbatterie.de
Australia as an attractive market for sonnen
Attractive for batteries:
• High power prices
• Good framework for renewables
• 1.8MM+ rooftop solar installations

Attractive for Virtual Power Plants:

• Regulatory landscape favourable for
attractive for VPP
new players in the energy markets
• Good framework for renewables
• Attractive markets for grid and energy
services

 Due to the market opportunity sonnen set up a company in

Australia in 2016
50

sonnenbatterie.de
CONCLUSION
ENERGY STORAGE

 The energy storage opportunity in Australia is real and growing

 The regulatory space is innovative and evolving
 There is space for diverse technologies, business models and players
 Supportive programs exist around the country at different scales
 Foreign investors are participating actively in this market

The Australian Trade & Investment Commission is here to

continue the conversation with foreign investors and to assist in
creating a business case to invest in Australia.

An introduction to the Australian Trade and Investment Commission 53

CONTACT US FOR FURTHER INFORMATION AND SUPPORT

Jennifer Mackinlay Elena Laburu

Senior Trade & Investment Commissioner, Paris Senior Investment Manager, Madrid
E: Jennifer.Mackinlay@austrade.gov.au E: Elena.Laburu@austrade.gov.au

Carolyn Abela Deborah Ponzio

Investment Director, Paris Senior Investment Manager, Milan
E: Carolyn.Abela@austrade.gov.au E: Deborah.Ponzio@austrade.gov.au

Kathleen Devereaux Ozgur Tuna

Senior Investment Manager, London Senior Investment Manager, Frankfurt
E: Kathleen.Devereaux@austrade.gov.au E: Ozgur.Tuna@austrade.gov.au