Hybrid assets and grid-forming BESS: Fluence on the trends in Australia’s NEM

This growing interest from the international community has given rise to several trends in the NEM, particularly the rise of hybrid assets and the grid-forming capabilities of BESS.

In this blog, ESN Premium speaks with Fluence’s Rob Hills, APAC vice-president of engineering and commissioning, and Sam Markham, growth manager, Australia and New Zealand, about the rise of hybrid assets and some trends being witnessed across Australia’s NEM.

Australia and the broader global energy landscape have seen a steady rise in the number of hybrid power plants being developed. These often see BESS combined with solar or wind to create either solar-plus-storage or wind-plus-storage.

For Hills, the hybrid system concept is becoming more prominent in optimising a power plant.

“It [hybrid projects] is definitely something we are seeing more in the market. For me, there are a few natural drivers around that,” Hills begins.

“The growth of the industry, people becoming more experienced, and technology becoming more mature enable hybrid systems to be developed. All those things come together and drive the growth of the hybrids we’re seeing.”

In addition, Markham believes a rule change introduced by the Australian Electricity Market Operator (AEMO) in 2021 has helped spur growth in hybrid projects in Australia. This code change allows multiple assets to share a core connection point to the grid.

“One of the benefits of that is reduced curtailment risk of existing assets that might have an abundant amount of resources, but it cannot get out of the gate at certain times,” Markham says.

“Having it located behind the same connection point means that you can take advantage of that abundant resource when it may not be able to be dispatched into the market.”

Despite the positives of having these hybrid assets, Hills admits that this does make the grid connection process, which ESN Premium has already heard described as rigorous recently, that extra bit harder. However, in a lighter spin on the situation, Markham adds that this rigorous process means that potential challenges an asset could face once it comes online can be avoided.

“I’d say it’s a lot of challenge, but there’s probably a good reason for it,” Markham says.

Developing hybrid assets, particularly in Australia, can be challenging. However, Hills and Markham believe companies can adopt specific measures to increase the likelihood of success and mitigate issues on the way to completion.

For Hills, leveraging international expertise can significantly impact the success of a hybrid project, incorporating understandings from other markets, such as the US and Europe, and vice versa.

“For me, the real success factor is having experienced people operating on the network and taking systems through those processes. It definitely helps. When I look at our organisation, we draw on global experience,” Hills says.

“As much as Australia is one of the most rigorous processes you have to work through, I think the experience out of Europe, particularly around grid-forming capability, does help. We work as a global team, and having access to that global experience helps meet similar requirements in Australia.”

In addition, Markham believes that a unified approach to “developing the asset and how that asset will be operated” from the outset can help simplify some of the decision-making and maximise the trading approach for the asset.

“There are some decisions you can make now in developing a hybrid asset that can maximise or take advantage of a trading approach,” Markham says.

“It’s important to consider whether you’re selecting AC versus DC coupling and what the engineering risk of taking those two approaches is: that’s really in the development phase. But then, also, how are you planning on operating those assets?

“Choosing between those two decisions might take you down a particular path. In the past, you might have been able to build an asset and then develop a trading strategy, but now we’re starting to see a bit more of it coming together, particularly in hybrids.”

Fluence has also identified several key trends across Australia’s NEM over the past few years. This has coincided with significant growth in the energy storage space and the utility-scale renewable energy generation sector.

Markham notes that one of the primary changes in the NEM she has witnessed stems from a shift in the “money-making period” of the summer months, which is now stretching into other parts of the year, specifically the shoulder seasons of spring and autumn.

“From a market’s perspective, we have gone from summer being the money-making period to now, which is not necessarily just summer, but also the shoulder season. We have seen this in the last couple of years across different times of the year,” Markham says.

“This kind of concentration risk and trying to ensure that your BESS is there when it needs to be are becoming increasingly critical because you cannot just rely on the summer period. That’s an exciting trend highlighting the increasing need for high-performance BESS that can be quite flexible to market and system needs.”

Alongside a shift in money-making periods, Markham states that there is an increase in projects leveraging existing infrastructure to develop utility-scale projects, particularly BESS.

Indeed, with Australia’s shift away from coal-fired power, which is anticipated to be achieved in 2038, although Cornwall Insight debates this, believing some coal plants will continue operating well into the 2050s, these decommissioned power stations are well suited to hosting energy storage assets.

One of the most notable of these projects is Australian utility major Origin Energy’s 2.8GWh Eraring BESS, which, when completed, will be one of the largest systems in Australia. The project is being developed on the site of New South Wales’s largest black coal-fired power plant, with a generation capacity of 2.8GW.

Fluence has also been involved in several other utility-scale BESS on the site of decommissioned and soon-to-be-decommissioned coal-fired power plants. Markham believes locating BESS at these power plants could become more prevalent as more are scheduled for decommissioning.

“From a locational perspective, one of the trends we’re seeing is that batteries are also starting to locate at historic coal power stations. We’ve got two projects that we’re working on or have worked on: the Hazelwood BESS (150MW/150MWh) at the old Hazelwood Power Station and the Liddell BESS (500MW/1,000MWh) at the old Liddell Power Station.

“It’s cool because it’s taking advantage of this existing transmission infrastructure. I think we’ll see more of that in the future.”

Another trend that Fluence has witnessed in Australia’s NEM is grid-forming BESS assets. This refers to the ability of an inverter-based resource to maintain voltage and frequency stability on the grid.

These often operate independently or in conjunction with the grid to provide crucial services such as inertia and system strength, which could prove crucial in increasing the penetration and integration of renewables on the grid and aiding the decommissioning of coal-fired power plants.

According to Hills, the steady rise of hybrid assets has brought with it several technological advancements, including grid-forming abilities. Hills tells ESN Premium that grid-forming BESS are becoming “normal” in the NEM, which will likely lead to the maturity of this technology.

“Grid-forming is becoming more normal in the market now. But I think we’ll see a further iteration of that, and more maturity around what needs to be grid following and what needs to be grid forming,” Hills says.

Hills also mentions the increasing need to boost energy density, with battery prices continuing to fall rapidly. Research and development efforts to increase energy density could bear fruit and help drive product development in the international market.

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