Australia’s future energy market – Tasmania’s competitive advantage 

Australia’s energy sector is undergoing significant transformation, with a rapid acceleration of retiring coal plant expected in the late 2020s.

More interconnection across Bass Strait would unlock Tasmania's full renewable energy potential, providing clean, reliable and affordable energy to support a resilient future energy market. 

Hydro Tasmania has hundreds of megawatts of latent capacity and ample opportunities to optimise our existing asset base and build highly cost competitive pumped hydro development. In particular, our existing and potential long duration (deep) storages allow us flexibility in optimising our assets and operations to best meet future market requirements.

Additional interconnection would support expansion of Tasmania’s existing hydropower system, through development of pumped hydro, providing the firming capacity that will be needed to support a future Australian energy market characterised by decreasing coal plant and increasing wind and solar.

The Tasmanian opportunity represents one of the most reliable and cost-competitive solutions for meeting Australia’s future energy needs. It would put Tasmania’s energy needs beyond doubt, and ensure that Tasmanians enjoyed the lowest possible power prices.

The Australian Renewable Energy Agency has committed up to $5.0 million for Battery of the Nation studies, as part of its Advancing Renewables Program.

Latest news

April 2020

Deep storage and its role in a reliable, resilient future energy market

As Australia’s transition to a greater penetration of renewables ramps up, new analysis from Hydro Tasmania examines the role of storage in supporting a reliable, resilient future energy market and further validates the case for an expansion of Tasmania’s hydropower system.

We’ve produced a series of white papers (links below), jointly funded with the Australian Renewable Energy Agency (ARENA), that take a detailed look at Australia’s future energy market and how to plan for an uncertain future.

We examine modelling and design of the future energy market (and the challenges that presents), unlocking investment in much-needed storage and how deep storage (duration of 12+ hours) is the optimal, least-cost choice to manage future uncertainty during the country’s energy transition.


The case for deep storage

Pumped hydro

We bring together key insights to show that energy storages that can operate over many hours (12+ hours) are an optimal, least-cost choice able to manage realistic uncertainty in the power system.

Our analysis demonstrates that Tasmania has an ideal opportunity to develop the cost-effective deep storage pumped hydro that Australia needs to manage these uncertainties and support a reliable future NEM.

Download the insights paper >


Challenges in modelling a transforming NEM

There is a significant challenge ahead to plan for, and implement, a timely and orderly transition for Australia’s electricity market. Substantial effort and investment into modelling will be required to try to understand the potential development options of the future NEM.

Our white paper Challenges in modelling the transforming NEM takes a close look at the challenges driving future uncertainty and how modelling must adapt to create robust options that work across a range of potential futures.

Download the White Paper >

A connected national electricity market

Perfect foresight in an imperfect world

Battery of the Nation

Understanding how storage might realistically operate in the future is critical to understanding the potential reliability of Australia’s energy system.

The white paper Operation of storages without perfect foresight shows that using more realistic forecasts, we will need more and longer duration storages than currently predicted.

The analysis demonstrates that longer storages are better able to manage forecast uncertainty and more likely to have energy in storage at times when it will be needed. This will better support the reliability and security of the future NEM.

Download the White Paper >


Unlocking investment in storage

Current energy market uncertainty makes it difficult to make investment decisions, especially for long lead time projects. But investment decisions are needed now to ensure these solutions are available in advance of a market shortfall – particularly if generator retirements occur earlier than expected.

Our white paper Unlocking investment in storage for a reliable future NEM examines how de-risking of strategic opportunities can give investors confidence to bring forward necessary investments and how Tasmania’s future developments could contribute strongly to a cost-effective, reliable electricity system.

Download the White Paper >
Battery of the Nation

October 2019

Working together to achieve a clean energy future

New analysis from Hydro Tasmania shows the Battery of the Nation initiative offers significant potential for Tasmania and Victoria to work together to achieve an affordable, reliable clean energy future.

The white paper, How Battery of the Nation can contribute to Victoria’s energy needs and objectives, outlines the challenges facing Victoria as it transitions away from fossil fuels to renewable energy.

The analysis shows Tasmania can help Victoria mitigate the risks of early or unexpected coal plan retirement, including high costs and unreliable supply, while supporting its renewable energy ambitions.


December 2018

Unlocking Tasmania's energy capacity through interconnection

SmHYD Battery of a Nation Icons RGB-HYDRO

Analysis released by Hydro Tasmania demonstrates that additional Bass Strait interconnection would immediately unlock many hundreds of megawatts of latent dispatchable capacity in the Tasmanian hydropower system, and make it available to a transforming National Electricity Market (NEM). 

The White Paper The potential of Tasmania’s renewable generation assets with more interconnection has been developed as part of Hydro Tasmania’s work to support Tasmania’s ambition to become the renewable energy Battery of the Nation.

Download the White Paper >


Future market analysis

The need for energy market change

The need for market change

It’s expected that in coming decades the National Electricity Market (NEM) will rely less on coal and more on renewable energy sources like wind and solar.  These changes are already starting to happen, and the late 2020s is expected to be the start of rapid change. The graph shows the rapid decline of coal from 2028 and the impact on overall generation capacity.

Wind and solar are what’s called ‘variable’ energy sources (as the sun doesn’t always shine and the wind doesn’t always blow). If we rely more on these sources, there’ll be a much greater requirement for ‘firming’ capacity, to ensure energy security and support variable generation sources.

How will Tasmania deliver on this opportunity?

The Battery of the Nation opportunity offers economies of scale, diversity and flexible, reliable renewable energy resources. This is combined with cost-competitive, large-scale storage that can be built in stages, aligned to market drivers. 

This opportunity can bring significant benefits to both Tasmania and the rest of the NEM.

The advantages of the Tasmanian solution are summarised below. You can read more detail on these outcomes in our full report – Battery of the Nation: Analysis of the future National Electricity Market.

Significant Tasmanian hydropower potential

Tasmania has an extensive hydropower system that can be repurposed for the needs of a future market, to quickly and reliably support variable generation. 

The state also has significant pumped hydro potential which is very cost competitive compared to other storage options. The options can offer a diversity of storage lengths ranging from hours to several days.

Significant Tasmanian wind potential

Tasmania is often talked about as having the best wind resource in the world, lying directly in the path of the Roaring Forties. 

This wind resource is relatively untapped and plentiful. Tasmania’s other clear advantage is the different wind pattern to other states.

Learn more >

 

Cost competitive coordinated solution

Tasmania’s renewable energy solutions are lower cost than other credible options.

Our wind power, pumped hydro potential and further interconnection create a credible and cost-competitive solution to address the energy trilemma.

Learn more >

 

Addressing the energy trilemma

Affordability, security and sustainability make up the energy trilemma. The Battery of the Nation opportunity addresses all parts of this equation, in a coordinated system solution.
 
Importantly, our analysis shows that flexible hydropower can reduce reliance on gas for firming services and will reduce energy resource costs by as much as 20%, putting downward pressure on prices to customers.

Learn more >

 

National planning alignment

Future energy solutions must fit with national energy market strategies and planning.

Since the release of our report in June, Hydro Tasmania welcomes the first release of the Australian Energy Market Operator’s Integrated System Plan (ISP) and its support for developing the Battery of the Nation initiative.

Battery of the Nation is one of two major existing energy storage proposals (along with the Snowy 2.0 project), identified in the ISP released by AEMO.


Learn more >

 

What does this mean for Tasmania?+

The Battery of the Nation opportunity could:

  1. Ensure the lowest possible power prices for Tasmanians
  2. The renewable energy developments proposed under Battery of the Nation are extremely cost effective compared to other realistic options. This will put significant downward pressure on Tasmanian power prices.

  3. Ensure long term energy supply security for Tasmania
  4. Thousands of megawatts of new wind generation on island and more interconnection to the mainland would mean secure long-term energy supply for Tasmania.

  5. Provide a long term economic stimulus to regional areas of Tasmania
  6. The investment in pumped hydro, wind generation and transmission will be incremental over decades and focused on areas outside major city centres. This will generate significant, ongoing economic stimulus in regional areas of Tasmania.

The benefits for mainland Australia...+

Australia is going to need huge-scale renewable development in coming years and the Battery of the Nation plan is one of the most achievable and competitive solutions to Australia's looming energy challenge. Australia now has a clear and viable solution to invest in, for building the renewable storage and wind farms our nation needs.

This will bring national benefits including:

  1. Ensure the lowest possible power prices for the NEM
  2. Compared with credible alternatives, the renewable energy developments modelled under Battery of the Nation would put downward pressure on prices to customers across the NEM.

  3. Provide stable, secure and reliable energy supply
  4. The ability to leverage existing assets and storages will enable Tasmania to provide critical system balancing and firming services to ensure reliable energy provision in the NEM.

  5. Meet Australia’s energy sustainability targets
  6. Investing in Tasmania’s world class wind resources will help deliver Australia’s energy sustainability targets and international carbon reduction commitments.

The next steps…

This report's conclusions confirm Battery of the Nation is a cost-competitive solution, and further strengthens the case for more interconnection across Bass Strait.

TasNetworks is undertaking a formal assessment of further Bass Strait interconnection, which would unlock Tasmania’s untapped wind energy potential.

To better understand the case for a larger Tasmanian role in a future NEM,
modelling and analysis will continue to be developed. Hydro Tasmania will work
closely with TasNetworks, AEMO and other key stakeholders on the
next stage of analysis.



© Hydro-Electric Corporation 2019