Transgrid, Australia’s largest grid operator, plans to launch a competitive bidding process to procure grid support services from third-party battery operators. It aims to maintain reliable power generation in two growth areas in New South Wales by looking beyond traditional grid infrastructure.
Transgrid, the transmission network operator for Australia’s New South Wales state, said services provided by grid-wide battery energy storage systems have been identified as part of a priority option to address new grid constraints in the Bathurst, Orange and Parkes region.
Transgrid, the operator and manager of the New South Wales-Australian Capital Region high-voltage electricity transmission network, said a thorough assessment of options had identified large batteries as the best way forward as it would offer the greatest benefits to two grid growth areas.
“Our network is changing, which is why we go beyond traditional poles and wires and introduce new technologies and business models to meet consumer needs and keep the system reliable,” said Transgrid’s network manager Marie Jordan. “We are looking to buy services from service providers who own and maintain battery storage. This approach will help meet growing demand in both areas faster than upgrading the existing network.”
Transgrid is seeking services from two separate battery energy storage systems to be installed at substations near Panorama and Parkes, and another large battery to be installed near Narrabri or Gunnedah in the North West Slopes.
Jordan said the grid-wide batteries will provide dynamic reactive support to manage voltage fluctuations on Transgrid’s grid during periods of high demand, starting in 2025 or soon after.
“These services will help free up additional capacity in the transmission network and make better use of the existing network and avoid supply interruptions to consumers,” he said. “Service providers can also use the batteries to trade in the energy market when they are not needed to support Transgrid’s network, so it is a win-win for the power system.”
Transgrid modeling shows that electricity demand will increase significantly in the near future in the Bathurst, Orange and Parkes areas and in the North West Slopes area due to the connection of new industrial loads and general load growth.
According to the network operator, several options have been studied in both areas to solve the load restrictions that have arisen, and in each case the best option has been the services provided by third-party battery energy storage facilities.
Jordan said the project is among the first in the national electricity market where a solution with large batteries has outperformed other alternatives in the entire Regulatory Investment Test for Transmission (RIT-T).
“It’s another sign of how quickly our energy system is changing and how we need to adapt and embrace new technology as we begin the energy transition,” he said.
Figures provided by Transgrid show proposals from third-party battery operators had yielded pole and wire solutions, promising up to A$2,550 million ($1,717 million) in net benefits for Orange and Parkes and $459 million for North West Slopes.
Transgrid will now begin the competitive procurement process and begin commercial negotiations with non-network supporters to conclude contracts. On August 10, the network operator will host a market forum where potential service providers are invited to register.
Depending on approval, the batteries can be manufactured by 2024-25.