Battery of the Nation is the latest proposed Tasmanian mega-project.
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For a project that looks like costing in excess of 4 billion dollars, there is significant uncertainty about what BOTN will actually include, or indeed what its primary function will be.
Being discussed is a doubling or tripling of Tasmania's electricity interconnection with Victoria in addition to one or more pumped hydroelectric schemes being built in Tasmania.
Taking a critical look at the role of a PHES in Tasmania's electricity network, here are some things that PHES's do not achieve:
- PHES's are not net producers of energy - they are net consumers of energy. The more they are used the more energy they consume.
- PHES's are not free to operate once they are built. Their fuel costs are the cost of the electricity they buy to pump the water uphill. Depending on their round-trip efficiency they need to sell their energy for 25-50 per cent more than they buy it for just to break even on fuel costs.
- PHES's do not necessarily even promote renewable energy. If Snowy 2.0 was in operation today it would be of great benefit to Australia's fleet of coal-fired power stations as it would allow them to generate more energy at a more constant rate, potentially crowding out new renewable generation coming online.
So what do PHES's actually achieve?
- PHES's act as new "peaking" generators. They increase an electricity grid's peak power generation capacity. Of course, they can only do this as long as there is water in the "high storage".
- PHES's also act as new flexible demand. They provide a market for generators to sell their energy to if the grid is generating more power than required. This excess power may come from wind or solar or may come from coal. Of course, a PHES can only do this as long as the "high storage" is not full and the "low storage" is not empty.
Mainland Australia does not have an energy problem - they have a power problem.
They have plenty of potential energy in the form of coal and gas waiting to be burned, but sometimes they can't convert it into power fast enough.
A PHES would indeed be a useful addition to the mainland's grid (although it is not the only option, and to declare a conflict of interest I have a financial interest in 14D).
So how does this help Tasmania? Put simply, it doesn't.
Tasmania has never had a power problem - we can near-instantly generate more power than our grid has ever demanded, but only if we have energy in storage.
Tasmania has an energy problem - we can't generate as many kWh of energy as we consume without either importing energy from Victoria or running our hydroelectric storages lower. Adding a PHES - a new large net consumer of energy would make our energy problem worse.
Tasmania has an energy problem - we can't generate as many kWh of energy as we consume without either importing energy from Victoria or running our hydroelectric storages lower. Adding a PHES - a new large net consumer of energy would make our energy problem worse.
Would BOTN enhance Tasmania's energy security? New interconnectors would, but there are much cheaper options.
A new PHES would not.
Is BOTN needed to increase Tasmania's investment in renewable energy?
Not until we have many times more wind and solar installed than we have today.
Until then we can simply store our wind and solar energy by "substitution".
Is BOTN needed to smooth the mainland's power supply and demand?
Yes, it could, but if the primary function was to manage power fluctuations in Victoria then it would be cheaper and more efficient if it was built in Victoria.
Victoria has some excellent potential sites for a PHES. Tasmania's energy problems are firstly that we have a deficiency in annual on-island energy generation, and that our energy security is at risk in the case of a drought. Thankfully the solutions to both problems are simple:
- The solution to our generation shortfall is to build more wind and solar. Never in the history of humankind have we been able to generate electricity as cheaply as we can from wind and solar today.
- The solution to our energy security problem is to allow our hydroelectric storages to fill to higher levels, just as we did in the lead-up to the carbon tax.
Battery of the Nation is a very expensive solution to the wrong problem.
And this is why it's never going to happen.
