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The Australian Renewable Energy Agency (ARENA), has given utility company AGL Energy (AGL) the task of examining the business case for grid-connected energy storage in South Australia, with AGL to receive AUS$445,000 (US$390,000) of funding.

ARENA made the announcement on Thursday of last week. The agency’s chief executive officer Ivor Frischknecht said the move to incorporate more storage on the area’s electricity networks could allow for greater integration of renewable energy.

As part of a wider, AUS$1 million (US$870,000) project involving AGL in partnership with South Australia’s transmission network service provider Electranet and project delivery company WorleyParsons, the latest round of support will look in particular at storing the night time output of wind farms owned by AGL in South Australia, for use during the day.

Ivor Frischknecht said that not only could deploying storage potentially allow for greater integration of renewable energy, it could also allow renewable energy to be used to manage demand and supply imbalances in an economically viable way.

“Commercial-scale storage is especially important for enabling higher penetrations of renewables where less base load energy is provided by fossil fuels.

“The larger storage devices being explored may allow AGL to get more value from its renewable generators by delivering energy at times when demand is high,” Frischknecht said.

South Australia utility explores grid storage potential

ARENA's head Ivor Frischknecht said that adding storage could "become the norm for new renewable energy installations" in Australia. Image: AGL Energy.

Electranet will examine how energy storage would fit into Australia’s existing infrastructure and regulatory framework, while WorleyParsons will concentrate on the technical aspects, including the development of technical specifications, cost estimates and a projected timeline for the implementation of storage capacity.

The move could create a significant shift in the energy industry in Australia, creating a clear pathway for the establishment of grid-connected energy storage at commercial scale, according to ARENA.

In related news, two industry bodies, the Australian Energy Storage Council, led by the country’s solar council chief executive John Grimes, and the Australian Energy Storage Alliance, were launched in September and October respectively.

The announcement follows similar recent moves from around the world to fund and support energy storage. Many of the recent announcements, like this one, have not been huge in financial terms but have shown the willingness of national and regional governments to look at energy storage for the purpose of integrating renewable energy and protecting grids from instability.

South Australia utility explores grid storage potential

John Grimes, head of the Australian Energy Storage Council, also leads the country's national solar council. Image: Australian Solar Council facebook page.

Renewable energy has become a political hot topic in Australia, with prime minister Tony Abbott gunning to abolish the national Renewable Energy Target (RET). ARENA itself may well be disbanded, with the government intending to repeal the Australian Renewable Energy Agency Act 2011 that created the agency, with a bill in June to that effect. Funds already committed, such as the latest announcement, are expected to be safe, however.

ARENA head Frischknecht talked up the commercial aspects of the funding to AGL, saying it could boost the competitiveness of renewable energy.

“The results will be shared with the Industry, providing the groundwork for other players to consider their own business case for commercial storage.

“In the long term it could potentially become the norm for new renewable energy installations, increasing their competitiveness and leading to more renewables in Australia.”

Tags: tony abbot, arena, australian renewable energy agency, agl energy, worleyparsons, electranet, australian energy storage council, australian energy storage alliance, south australia, grid-connected, renewable energy target