South Australia's power sector: renewables, batteries and the future role of gas
The South Australia experience is noteworthy in a global power mix set to increasingly shift to renewable energy. The rapid growth of renewables raises intermittency challenges and has already changed the power mix with coal phased out and gas utilisation reduced. However, despite this reduction, gas still remains the most important way to ensure uninterrupted power supply. Meanwhile, South Australia is experimenting with numerous new technologies, in addition to reintroducing diesel generation, in an attempt to ensure security of power supply. Currently, these technologies are not economic compared to gas. Looking ahead South Australia is projected to have installed renewable energy capacity exceed its peak demand by 2020. This paper asks what needs to be considered given the increasing role of renewables in the energy mix? Can battery technology combined with renewables offer a commercial solution for replacing either base load or peak load gas plants? What is required for system security to 2035? If renewables and batteries are proven commercial then what are the implications for gas? To answer these questions, this paper will assess the extent to which renewable and battery technology costs will fall in South Australia. We will compare renewable and gas cost projections for 2018, 2025 and 2035. Using proprietary dispatch modelling we will then assess what the growth in renewables means for annually, monthly and daily gas demand. Demand will undoubtedly decline and become more volatile. This poses challenges. We will assess whether and how current gas contracting terms need to change to ensure that gas has a continued role in ensuring system security in South Australia.