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Australian Grid Simulation Demonstrates Near 100% Renewable Feasibility with Current Storage Technology

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Australia's NEM Simulates Near 100% Renewable Future by Decade's End

A four-year simulation of Australia's National Electricity Market (NEM), initiated on August 25, 2021, indicates that achieving near 100% renewable electricity is feasible with 24 GW / 120 GWh of energy storage. This level of storage, equivalent to approximately five hours of average demand, is considered attainable with current battery technology and existing pumped hydro assets by the end of the decade.

Achieving near 100% renewable electricity is feasible with 24 GW / 120 GWh of energy storage, considered attainable with current technology by the end of the decade.

Simulation Methodology

The simulation utilized actual weekly demand data without modification. Wind and solar generation data were rescaled to account for over 60% and 45% of annual demand, respectively. A combination of the 120 GWh of storage and existing hydro assets was used to balance supply and demand. Any shortfalls were met by 'Other' generation sources, which are currently gas or diesel peaking generators, but are anticipated to transition to clean options long-term.

Key Findings

  • Renewable Percentage: The simulation averaged 98.5% renewable electricity, with the remaining 1.5% supplied by 'Other' sources.
  • Seasonal Variability: The grid achieved 100% renewable supply from September to March annually. However, 'Other' generation was consistently required from April to August.
  • Challenging Periods: The week of June 12, 2024, was identified as the most challenging, requiring 18.6% of demand from 'Other' due to a prolonged wind drought. Similarly, challenging days were often marked by a combination of above-average demand and below-average wind and solar generation.
  • Cost Estimates: The estimated cost of electricity supply, including generation, storage, curtailment, transmission, and system security, was $126/MWh, comparable to wholesale electricity costs over the last five years.
  • Emission Intensity: The grid's emission intensity was estimated at 9 kg CO2-e/MWh (Scope 1) and 37 kg CO2-e/MWh (full lifecycle), positioning it among the cleanest grids globally.
  • Storage Utilization: Only 10% of demand was met by storage discharge. Wind and solar directly supplied 82% of demand, and hydro directly supplied 7%, without passing through storage or being curtailed.
  • Curtailment: 16% of wind and solar generation was curtailed due to excess supply.

Detailed Observations

Wind generation targets averaged 60%, but weekly values varied from 27% to 105%. Utility solar targets averaged 20%, with weekly values ranging from 10% in winter to 34% in summer. The mix of wind and solar demonstrated reduced overall variability compared to either source in isolation, highlighting the importance of diversification.

During periods of extreme demand, such as the record-breaking peak of 39.3 GW on December 16, 2024, wind and solar generation performed above average, allowing for 100% renewable supply on that day. This suggests that a highly renewable NEM with five hours of storage is capable of managing extreme demand events.

The estimated cost of electricity supply was $126/MWh, comparable to wholesale electricity costs over the last five years, positioning it among the cleanest grids globally.

Costs and Emissions Breakdown

The total annual cost for this near 100% renewable supply was estimated at $26.5 billion. The majority of this cost (73%) came from wind, solar, and hydro generation, followed by storage (13%), 'Other' (7%), and additional transmission (6%).

Full lifecycle emissions calculations reveal that while wind, solar, and batteries have lower per-MWh emissions than 'Other' sources, their overall annual embodied emissions can be substantial due to the scale of their deployment.

This suggests that fully eliminating 'Other' sources through excessive over-generation or storage may not be the most carbon-efficient or cost-effective approach.

Future Considerations and Sensitivity Analysis

  • Zero-Carbon 'Other' Options: Long-term solutions for 'Other' include transitioning to renewable gases/liquids, expanding demand response mechanisms, and deploying additional long-duration storage (e.g., Snowy 2.0). Hydrogen production from curtailed generation could also cover 'Other' requirements.
  • Optimal Storage: The simulation indicated that approximately 120 GWh of storage represents the least-cost option, with diminishing returns for increased storage capacity.
  • Optimal Generation Mix: The current mix of 60% wind and 45% solar proved to be near optimal. While increasing solar could reduce generation costs, this would be offset by higher storage costs, particularly if wind generation falls below 40% of annual demand, leading to increased winter shortfalls and summer curtailment.
  • Demand Response Impact: If flexible demand could utilize 50% of curtailed generation, average electricity costs could decrease to $114/MWh, and the optimal amount of wind and solar generation would exceed 120% of demand.