Victoria to Introduce Largest Energy Storage Targets in Australia
Victoria’s new targets are to reach 2.6 gigawatts (GW) of renewable energy storage capacity by 2030 and to increase this to 6.3 GW by 2035.
The missing piece of the puzzle for the energy transition has certainly not been production. Australia is one of the sunniest and windiest places in the world, making it an excellent candidate for renewable energy production. A large part of the problem is the storage of this electricity.
Therefore, it is incredibly exciting that the Victorian Government have announced the State’s newest renewable energy storage targets – set to be the largest in Australia!
The State Government says by 2035 it wants enough storage capacity to power half the homes in the state.
The pledge to legislate Australia’s largest renewable energy storage targets will accelerate Victoria’s transition to renewable energy and drive down the cost of electricity.
This is a significant step in the right direction, recognising the role energy storage will play in the energy transition. This will undoubtedly reinforce both investors and consumers’ confidence in energy storage, particularly innovative battery technologies that are able to store excess renewable energy and release it when needed.
These targets will help support a more reliable grid as Victoria makes its transition from expensive, polluting (and failing) coal powered generation to cheaper, clean renewable energy.
YEF is incredibly excited by this announcement and are keen to see the effect it will have on community battery projects across inner Melbourne and beyond.
You can read the whole media release here: https://www.premier.vic.gov.au/australias-biggest-renewable-energy-storage-targets.
You can also read more about community batteries here: https://www.yef.org.au/community-batteries/.
What are the benefits of the new energy storage targets?
The new targets will bring on a cascade of benefits across the state which will hopefully incentivise the federal government to introduce national storage targets. Unfortunately, emissions don’t respect state borders (or national borders for that matter), so while it is excellent that Victoria is leading the charge in terms of renewable energy storage, hopefully we can pave the way and be an excellent case study for the rest of Australia, and the world.
1. Reduced energy prices
An increase in energy storage will allow Victoria to capitalise on all the excess renewable energy (mainly wind and solar) that we produce, storing it in numerous batteries across the state. By charging up using cheap, clean energy during the day/windy periods, this energy can then be released back into the grid when demand is high and energy is usually expensive (in the evening or still, cloudy days).
This expanded access to cheap, clean, and renewable energy will put downward pressure on household power bills.
Furthermore, by supporting this low-cost renewable energy generation, Victoria should see a drastic decline in its electrical wholesale price volatility and a reduced reliance for expensive thermal generation.
2. Reduced emissions, faster decarbonisation, and stability within the electricity sector
The reduced reliance on coal or gas-powered generation will assist in the reduction of greenhouse gas emissions across Victoria, helping mitigate global heating.
Energy storage also offers a dispatchable energy capacity, facilitates efficient renewable generation, and ensures network reliability and limited price instability within the energy market.
“We’ve cut emissions by more than any other state, tripled the amount of renewable energy, and created thousands of jobs. We’re not just talking about climate action – we’re getting on with it.”
– Daniel Andrews, Premier of Victoria.
The reduction in costs, emissions, and fossil fuel reliance should ultimately cause the demand for renewable energy to skyrocket.
Fortunately, increased storage capacity allows for more renewable energy generation, which calls for more renewable energy storage, which allows for more renewable generation, which calls for… You get the idea.
3. Thousands of new jobs
The new energy storage targets will create an abundance of new jobs across a variety of disciplines within Victoria. This will be supported by up to $1.7 billion in funding over 2023 to 2035.
“Our new energy storage targets will deliver up to 12,700 jobs for Victorians”
– Lily D’Ambrosio, Minister for Energy.
4. Clear market signals and greater certainty to accelerate investment in storage
These targets have confirmed the governments recognition of energy storage and the overarching role it will play in the clean energy transition. Investment and further funding will be expected to follow in the next decade as energy storage capacity is ramped up across the state.
Hopefully, we will not only be able to reach these targets, but exceed them. As more energy storage is installed and the benefits become ever clearer, the rate of uptake will increase, leading to an accelerated transition to 100% renewable energy usage.
How will Victoria’s reach its Energy Storage Targets?
Victoria’s energy storage targets will be reached through a variety of innovative technologies, such as:
- Aggregated household battery storage
- Neighbourhood / Community battery storage
- Utility-scale battery storage
- Pumped hydroelectricity storage
- Hydrogen based generation
Yarra Energy Foundation installed the first inner-urban community battery in Victoria. The project has helped demonstrate the operational and commercial viability of a community battery within an inner-urban setting. We are incredibly hopefully that these targets will create an influx of similar projects and we are prepared to lead the charge in this space.
Challenges & Solutions
There are challenges that impact energy storage implementation, such as:
- Complex and expensive approval and connection processes.
- Supply chain issues.
- Fluctuating and uncertainty of technology prices.
- Regulatory frameworks not effectively defining and valuing energy storage services and benefits.
- Confusion around virtual power plants (VPPs).
However, the State Government has acknowledged this and there are answers to these challenges:
- Improving on the network pricing rules.
- Guaranteeing a reward system for energy storage technologies and their system and network services.
- Addressing and alleviating consumer confusion surrounding VPPs.
Fortunately, they have also expressed interest in working with energy storage stakeholders, like the Yarra Energy Foundation, to help them iron out the creases and ensure the storage targets’ success.
The Yarra Energy Foundation is committed to assisting Victoria’s transition to net-zero emissions. We are hopeful that Victoria’s new energy storage targets will play a vital role in this transition by providing an increase in funding, research, and overall understanding of renewable energy storage.
You can read more about the importance of community batteries here.