Plans to provide the remote New South Wales mining town with the world’s smallest, renewable energy grid have been revived after transport company Transgrid found a way to weed out a diesel option it had been forced to adopt by Australia’s outdated energy rules and regulations.
The renewable microgrid proposal is based on the use – for the first time ever at this scale – of a 200-megawatt, 1,500-megawatt-hour storage facility using compressed air technology developed by Canadian company Hydrostor.
These plans, first announced in 2020, were due to be scrapped last year when Transgrid was forced instead to opt to install new diesel turbines because Australian national electricity market rules allow no consideration of environmental benefits.
In a stark definition of economic benefits, highly polluting diesel generators have beaten the cleaner energy storage option, but Transgrid, Hydrostor and its venture partner Energy Estate have now reconsidered the plan and – with the help of an expected grant from the Australian Renewable Energy Agency (ARENA) – I believe they are winning over the option. Dirty diesel.
It’s a daring play for Transgrid. Historically, networks are unknown [gambling] on new technologies over traditional poles, wires, and other traditional options – in part because of outdated rules that govern the market and discourage innovation.
But Transgrid insists there are minimal risks to it or consumers because the nature of the deal with Hydrostor means the Canadian company and its partner won’t get paid if they can’t deliver the project. Hydrostor has demonstrated this technology on an experimental scale but has not yet been released on a commercial scale.
“We love offline solutions,” Transgrid’s head of delivery, Craig Stallan, told RenewEconomy, adding that Transgrid would nevertheless “upgrade” two of its Broken Hill diesel generators, at minimal cost, just in case.
“We only pay if it works, we only pay [Hydrostor] Marie Jordan, newly appointed Head of Network, Transgrid added.
The decision to go with Hydrostor – if approved by the Australian energy regulator – will turn Broken Hill into a hotbed of innovation on the edge of the grid, blending compressed air storage with a 200 MW Silverton Wind Farm, 50 MW Broken Hill solar farm, and a Broken Hill battery capacity 50 megawatts / 50 megawatts per hour.
The region has more wind and solar power generation than it knows what to do with, and has often struggled to export the full production of these facilities to the rest of the grid, leading to a significant downsizing of local wind and solar farms.
The addition of short-term battery and long-term compressed air storage will maximize renewable energy production, provide more flexibility to the local grid and provide a ready supply of clean, reliable and affordable green energy to the mining and mineral processing industries. Expected to revive the local economy.
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The latest project evaluation estimates $268 million in economic benefits from the Hydrostor option, which Transgrid says is 5% better than installing two new 25-megawatt diesel generators, and Transgrid notes that the new investment in fossil fuels is less desirable because a green energy transition is taking place elsewhere. .
However, the “economic advantage” is dependent on ARENA’s approval of the grant. The size of the grant requested was not disclosed, as it was not agreed upon, but the document states that at least $13.2 million is needed to maintain the storage option in the future. If the grant is not forthcoming, it will go back to diesel engines.
Hydrostor plans to install a compressed air storage facility in an old mining operation, using abandoned caverns to store compressed air, which is released when needed to spin turbines and generate power.
Hydrostor describes its technology as a “giant air battery.” It uses off-peak renewable electricity to run a compressor that produces hot compressed air that is then stored in underground caves. When needed, the compressed air is expanded through a turbine to generate electricity.
“Transgrid recognizes the value that our A-CAES solution offers, and we are very pleased that we have been selected as a preferred alternative over competing offerings,” said Curtis Van Wallegim, CEO of Hydrostor.
“New South Wales is a world leader with a clean energy policy and net-zero ambitions, and we look forward to starting our first A-CAES project in Australia.”
TransGrid Jordan says the decision is in the long-term interest of consumers.
“Hydrostor is proposing an exciting technology that would create a micro-grid using compressed air storage in an abandoned mine, in conjunction with local solar and wind power generation,” she said in a statement. This initiative will be an Australian first and its scale is impressive. As one of the largest renewable microgrids being created worldwide, we expect it to secure supplies for Broken Hill and create at least 260 construction jobs and another 70 continuing jobs after project completion.”