January 30th 2023
The Australian Renewable Energy Agency says it will offer $45 million in grant funding for a ground-breaking compressed air energy storage facility to be built in a disused mine in Broken Hill.
As RenewEconomy has reported, the 200MW/1600MWh Silver City project proposed by Canadian technology developer Hydrostor has been the preferred solution for network company Transgrid to replace two ageing diesel generators in Broken Hill and create a major new renewable micro-grid around the famous mining town.
The proposal has been the catalyst for a rethink of the regulations governing Australia’s energy markets, which had been deliberately designed by the former Howard government to exclude environmental considerations, and which threatened to force Transgrid to replace the diesel generators with yet more diesel.
Those rules are now to be changed now that the Coalition has lost power, and Transgrid has found a way around the regulatory hurdle. But the $652 million project – which will be one of the biggest compressed air storage facilities in the world – is still dependent on funding support.
Darren Miller, the CEO of ARENA, says the agency funding is contingent on the project reaching financial close – i.e. gaining funding from other sources – and it has until the end of next year to do so.
Compressed air storage works on a similar principal to pumped hydro, but uses renewables to compress air rather than pump water and store it in caverns, such as the disused mine that will be the location for this project. In dry arid regions like Broken Hill, this makes more sense than hydro options.
It is one of a number of medium to long term storage technologies that are being tested and supported by ARENA – these include thermal batteries in old fossil fuel turbines, an solar thermal technologies, including those using water.
These medium and long duration storage solutions will be vital to supplying power during the evening and morning peak-demand periods as Australia looks towards achieving 82 per cent renewable energy by 2030.
“Hydrostor’s innovative solution provides us with another option to add to the mix,” Miller said in a statement.
“As a fuel-free storage technology, compressed air storage technology has similar applications to pumped hydro, such as providing dispatchability required to ensure reliability of the power system as more solar and wind power is installed.
“In Australia’s regional towns at the fringe of the grid such as Broken Hill, new large scale storage technologies can provide back-up power to communities that will improve the reliability of electricity supply. Having more grid scale storage will also support more solar and wind in regional areas.”
Hydrostor in early 2019 was promised ARENA funding support for a 5MW/10MWh pilot and demonstration project of compressed air storage at the mothballed Angas zinc mine in South Australia.
But it was been unable to access the $6 million in ARENA funding, and much of the $3 million state funding, because it could not raise the rest of the $30 million needed for the project. It blamed Covid and the lack of scale for that failure.
At the time of its proposal, the Silver City project at Broken Hill was the biggest compressed air storage proposal in the world, but that has been superseded by another Hydrostor project in California, where it plans to build a 500MW, eight hour facility at Willow Grove.
Broken Hill currently hosts a 200MW wind farm at Silverton and the 50MW Broken Hill solar farm, while AGL has also received $15 million in funding support from ARENA for a 50MW, one hour battery to support those facilities, and the local grid, which is linked by a single line to the rest of the grid.
The announcement comes on the same day as ARENA provide another grant to help AGL test out new “thermal battery” storage technologies that could be used to retrofit its ageing coal and gas turbines.