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Becoming a renewable energy Battery of the Nation

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.

Our stage 1 analysis of the future energy market details Tasmania’s clear advantages and how it can make a significant contribution to the NEM’s transformation over the next two decades.

The advantages of the Tasmanian solution are summarised below.

You can read the report to learn more:

Future State NEM analysis-Executive Summary  
Future State NEM analysis-Full Report

-Significant Tasmanian hydropower potential

With the expected rapid retirement of coal fired power plants in the next 10-15 years, variable renewable energy sources like wind and solar will start to increase in the NEM. Storage will be the key to future reliability of energy supply, and this is where proven storage technology like pumped hydro comes in.

Tasmania has significant advantages because of our existing hydropower system. Being able to use these existing assets to develop pumped hydro brings advantages in practicality, cost and speed of construction.

Our analysis also shows huge potential for pumped hydro. These opportunities are very cost competitive compared with alternative energy storage options and provide deep storage duration.

Pumped hydro will also bring flexibility (providing both energy generation and storage) and increase our ability to control water in the system, which brings greater value.

-Significant Tasmanian wind potential

Tasmania is in an enviable position for future wind farm expansion. There is significant undeveloped wind potential, and wind in Tasmania often blows at different times to that on mainland Australia. This means wind farms in Tasmania generate at times when others are producing very little energy.  As more variable sources come into the market, having variation in the timing of supply will be critical.

Our analysis demonstrates the advantage of Tasmania wind. The graph shows the higher generation capacity in Tasmania and also illustrates the different wind patterns that will benefit the NEM. 

The proximity of strong wind resources in Tasmania to long-term storage options (pumped hydro development) increases the value of each.

-Cost competitive coordinated solution

Our wind power, pumped hydro potential and further interconnection create a credible and cost competitive solution for supporting Australia’s future energy needs. As a whole, Battery of the Nation is cost-competitive against all other realistic options for meeting Australia’s future energy needs, including when the cost of interconnection is taken into account.
Our cost analysis compared a number of different energy sources (and combinations of energy sources) that could deliver reliable renewable energy into the NEM.

Tasmanian options (a combination of wind, pumped hydro and repurposing the existing hydro system) are shown to be extremely cost-competitive with other realistic options for Australia’s energy future. More detail can be found in the Future State NEM analysis-Executive Summary and Future State NEM analysis-Full Report.

Tasmania’s advantage is the ability to repurpose the existing hydropower system for new firming services (ensuring continuity of energy supply) as variable energy sources such as wind and solar increase. The mainland relies heavily on open cycle gas (the next most cost-effective option) for the same function. Mainland hydropower stations already provide a capacity/firming service to the market and so there is limited opportunity to repurpose.

-Addressing the energy trilemma

Tasmanian development options represent a sustainable, reliable and affordable solution for both Tasmanians and the mainland. The Battery of the Nation opportunity strongly supports all three requirements of the energy trilemma - sustainability, reliability and affordability - in one coordinated system solution. BotN4

Early modelling shows Tasmania can displace the next most cost-effective source of firming in the market (open cycle gas generation), reducing market reliance on this source by half by 2040.

By using flexible hydropower for system capacity support instead of relying on gas, this could translate to a 20% reduction in NEM-wide resource cost of energy (similar to the energy spot price in the wholesale market). This will place downward pressure on Tasmanian and mainland retail prices – what you pay for your electricity.

-National planning alignment

Future energy solutions must fit with national energy market strategies and planning. Hydro Tasmania welcomes the release of the Australian Energy Market Operator’s Integrated System Plan (ISP) and its support for developing the Battery of the Nation initiative.

BotN5Importantly, the Tasmanian opportunity can introduce more generation diversity and optionality for market investment. 

Battery of the Nation also presents a staged infrastructure pathway. Tasmanian development can be adapted to fit with market planning. Investment decisions on new interconnection can be timed to align with the retirement of coal-fired generation.