‘We store wheat; we don’t harvest wheat every day of the year. We store water in dams, reservoirs and tanks. So it is strange that we have only recently started thinking seriously about storing electricity.’

That observation framed Turnbull’s discussion with Energy Institute members last month. In the edited extracts that follow, organised around key themes from the conversation, the former Australian Prime Minister reflects on Australia’s experience with renewable energy, storage, electrification and energy security, and explains why the next phase of the transition will depend increasingly on supporting infrastructure.

Storage has changed the renewables debate 
‘I had a real epiphany on energy storage in 2016 when South Australia experienced a major blackout that lasted for several days and affected hospitals and other essential services. At the time, South Australia had rapidly expanded wind and solar generation under Australia’s renewable energy target. The state has some of the country’s strongest renewable resources, with excellent wind conditions and abundant sunshine. However, much of its coal-fired generation had closed and reliability depended heavily on transmission links with neighbouring Victoria. When severe storms damaged those connections, the system failed.’

‘The lesson for me was that although we were rolling out large amounts of renewable generation, nobody was paying enough attention to storage. That experience helped drive support for Snowy Hydro 2.0, which is now around three-quarters complete. The project will provide around 350GWh of storage and 2,200MW of generating capacity.’

Solar power’s extraordinary rise 
‘Australia has some of the highest levels of rooftop solar adoption in the world. More than a third of Australian households now have rooftop solar and we are also seeing strong growth in home battery installations.’

‘One reason is cost. Australia does not manufacture solar panels at scale, but imported panels are inexpensive. Costs have continued to fall, both because equipment has become cheaper and because installers have become more efficient through experience. In cities such as Adelaide and Perth, rooftop solar can meet much of daytime electricity demand during favourable conditions.’

Batteries and the changing electricity market 
‘The energy transition creates new challenges as well as new opportunities. In the National Electricity Market, which covers most of Australia, average wholesale electricity prices fell 12% year-on-year in the most recent quarter. Batteries are now the most frequent price-setting technology in the market, replacing gas. They absorb low-cost solar generation during the day and discharge electricity during peak demand periods. Renewables supplied 46.5% of National Electricity Market generation during the first quarter of this year, the highest first-quarter share on record.’

Energy security and electrification 
‘Australia exports large quantities of coal and gas, yet imports most of its liquid fuels. Much of that supply chain remains exposed to global events. The disruption in the Strait of Hormuz has demonstrated how vulnerable energy markets remain to geopolitical shocks. It is creating economic hardship, but it is also accelerating the transition towards electrification.’

‘Fatih Birol [Executive Director] of the International Energy Agency has described the current disruption as a larger shock than the oil crises of the 1970s. Those earlier crises transformed energy policy around the world. I believe today’s shock will accelerate the adoption of technologies such as electric vehicles, batteries, solar and pumped hydro.’

What is the real challenge facing the transition? 
‘The real challenge is not whether renewables can provide low-cost energy. They clearly can. The challenge is building enough transmission, storage and firming capacity quickly enough to maintain reliability and affordability throughout the transition. The technologies exist. The question now is whether we can deploy the supporting infrastructure at the pace required.’

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘Australia orders 7.8GW of renewables and 7.9GWh of storage in latest auction’. Discover more about the 19 projects awarded under Tender 7 of the Australian government’s Capacity Investment Scheme.
• ‘Australia scales up battery storage nationwide as states race to replace retiring coal’. With three-quarters of Australia’s coal-fired power plant fleet set to retire by 2030, Australia’s state governments and investors are increasingly deploying grid-scale battery projects to deliver firm capacity, integrate renewables and help stabilise electricity prices.