Image of Elizabeth Quay Perth Western Australia Cityscape
Perth, Western Australia.

In recent months, transmission companies around the world have been increasingly considering energy storage as the means to supplement a fundamental part of our electric power infrastructure: the poles and wires that carry high-voltage current from power plant to end-users.

Battery-based energy storage offers a solution for adding needed capacity – “virtual transmission” – on Australia’s transmission corridors, increasing system reliability and the NEM’s ability to move power between states, on far faster timelines and at less cost than traditional infrastructure.

Congestion on Australia’s transmission network is not an issue on most people’s minds but has significant impacts across the economy. Network congestion continues to make headlines in Sydney and Melbourne during the heat of summer, when temperatures often hit 50 degrees C.

Transmission lines are running at full capacity but still are not able to serve all the load during the hottest day.

A single transmission line outage across the state boundary can create power price surges of $14,000/MWh or brownouts – as happened in New South Wales during August 2018, when the QLD-NSW interconnector tripped due to a lightning strike.

While several initiatives being pursued at the state and national levels aim to increase critical transmission capacity and reduce network congestion, energy storage can play – and should be considered – in helping address this specific issue.

Transmission: a road system with some highways packed, others barely used

In many markets across the world, changes in where electricity is being generated and where it needs to be sent are redrawing the network map.

Networks are shifting from the model of moving power from large clusters of centralized generation to loads – like communities being powered by the coal-fired plants in Victoria’s Latrobe Valley – to where new generation is now being spread out across the network, frequently further from load centers.

Intermittent solar and wind projects are being sited where the resources are most abundant, but frequently in areas where the lines weren’t designed to accommodate those power flows.

The flood of new decentralized generation – in particular solar, which follows similar generation curves – is putting the equivalent of heavy highway traffic onto smaller country roads.

Meanwhile, if a coal plant is retired for economic reasons or when it reaches the end of its life, existing transmission lines can be left with capacity to spare.

Bloomberg New Energy Finance found that nearly 50 percent of Australia’s coal plants will reach their end of life between 2030 and 2040, if not taken offline beforehand.

This redrawing of the map is leading to two key trends:

First, additional transmission capacity is needed on a few key transmission lines on specific areas of the grid;

And second, excess transmission capacity (e.g., underutilized lines) elsewhere on the grid may become stranded assets – which won’t be needed but still have to be paid for – especially in areas where renewables in one area continue to supplant traditional large power generation sources in another.

Both of these are problematic for network companies. While the first issue means they should find ways to address transmission shortages quickly – as on the interstate transmission lines – stranded assets are a more complicated problem.

If existing assets are shown to be underutilized and aren’t providing as much value as originally expected, network companies will come under greater pressure to spend capital diligently as they work to address network capacity shortage issues.

Changes in generation patterns (i.e., from coal to renewables, hydro and gas) are becoming more sustained, which is increasing the risk of some transmission or distribution assets becoming stranded.

In the meantime, building a traditional poles-and-wires solution to add capacity is a long and onerous process, with timelines typically ranging from two to six years, depending on the project.

Virtual transmission: like instantly adding lanes on a highway to ease traffic

Many people, even those familiar with energy storage, see it being dispatched as a form of generation – firming renewable energy or taking the place of natural gas power plants for peaking – or as a resource for managing frequency or voltage, services provided by thermal plants prior to energy storage entering the market.

However, we are seeing utilities in a variety of other markets all looking at energy storage as a source of providing transmission capacity or “virtual transmission.”

The virtual transmission concept is a little-known and deceptively simple use of storage – placing energy storage on a transmission line and operating it to inject or absorb real power, mimicking transmission line flows – essentially replacing the need for a line upgrade or new line to be built.

However, using energy storage to add transmission capacity represents a completely new way to solve congestion that can enable hundreds of megawatts of capacity to be added to lines in one-half or less deployment time compared to traditional assets…

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This article was written by Kiran Kumaraswamy and previously published on reneweconomy.com.au
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