Australia Sees Key Role for Batteries as Coal-Fired Plants Close

(Bloomberg) -- Australia’s biggest grid sees a major role for household batteries as it calls for A$122 billion ($81 billion) in annual investments to offset the closing of aging coal-fired power stations and meet surging demand.

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The last coal plant will retire in 2038 under the most likely scenario, the Australian Energy Market Operator said in its biennial Integrated System Plan for the National Electricity Market, confirming a draft released in December. Grid-scale wind and solar generation capacity will increase six-fold by 2050, and rooftop panels will quadruple, while the installation of home batteries could lead to multibillion-dollar savings, it said.

Australia’s world-beating uptake of solar has helped cause increased volatility and made the nation a test case for the global energy transition as aging coal plants struggle to compete.

The report comes in the same month Australia’s main opposition parties announced a strategy to build nuclear plants should they win back power. Opponents have criticized the plans, partly because of the relatively long time frames to build them.

“New generation, storage and firming must be in place before coal power stations retire, and to meet Australia’s growing demand for electricity,” AEMO Chief Executive Officer Daniel Westerman said. “But risks to the transition are emerging and must be carefully managed.”

The report reiterated that renewable energy firmed with storage and backed up by natural gas will be the cheapest way to supply electricity. It didn’t model nuclear power as it isn’t permitted under the nation’s current laws.

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