Research Article

Can high levels of renewable energy be cost effective using battery storage? Cost of renewable energy scenarios for an isolated electric grid in Western Australia

School of Engineering and Information Technology, Murdoch University, South Street, Murdoch, WA 6150, Australia

^* e-mail: gaiaquark@gmail.com

Received: 23 June 2018
Accepted: 13 February 2020

Abstract

Many simulations of very high or 100% renewable energy electricity systems rely on existing or expanded capacity of utility scale power technologies with long construction lead times, such as hydro power or pumped hydro power. However, globally, the shorter lead time and more distributed technologies of wind power, solar PV, and batteries are expanding rapidly, and costs are falling. Can a grid get to high levels of renewable energy with these technologies alone, along with energy efficiency improvements, at reasonable cost? To address this question, scenarios of partial (<100%) renewable electricity supply were simulated for the South-West Interconnected System (SWIS) in the southwest of Western Australia. The SWIS is isolated from other grids, so power balance between supply and demand must be maintained completely within the grid, and there is no significant hydropower capacity to fall back on. Even with no improvement in cost and no carbon price, the partial renewable energy scenarios were found to be less expensive than a fossil fuel “business as usual” scenario up to about 70% renewable generation. With carbon prices of $24/tonne and $70/tonne, the same scenarios were less expensive up to around 80% and 96% renewable generation respectively. Hence at current costs, using solar PV, wind, energy efficiency and battery storage technologies are cost effective up to very high levels of renewable energy, but not 100%. However the cost of these technologies are falling rapidly. A simple way to include these continuous cost improvements into the levelised cost of energy calculation was developed, and it was found that if the costs of solar, wind and battery technologies continue to improve at current global rates, then the break even level with conventional generation increases significantly, up to 99% or above with a carbon price of $70/tonne and current Australian installed capacity growth rates. Hence a battery based system operating at almost 100% renewable energy which is no more expensive than a conventional fossil system is foreseeable for the SWIS grid, and perhaps other grids as well.