We catch up with renewable energy storage expert Andy Tang of Wärtsilä to chat about the optimisation of renewables.
What does your role at Wärtsilä involve?
I work with utilities and power producers to facilitate the shift towards a 100 per cent renewable energy future. Storage is still relatively new for the energy sector; I’m working with stakeholders to help them realise its full potential, which occurs when paired with smart energy management tools.
Storage plus smart energy management is essential for integrating renewable energy onto the grid, making renewable power stable and reliable, and filling in other key grid supporting roles. At the same time this is a standalone energy source that can provide continuous renewable power. It’s a whole new way of looking at and managing the grid from a highly technical but also uniquely innovative revenue generation standpoint.
Can you tell us a bit about Wärtsilä’s current projects in Australia?
Wärtsilä is employing its innovative technology in Australia to help foster the energy transition here. In 2018 we worked with AGL Energy on the Barker Inlet Power Station, chosen to provide our fast-starting and flexible engines that function as the backup to renewable power, ensuring critical backup when needed, and day-to-day stability and reliability of the grid.
We’ve also been building our team in Australia for the past several years. We’ve invested that time into iterating our GEMS energy management platform and piloting new services designed to stay ahead of the challenges the region is encountering as it makes progress on the transition. The recent 1GW AGL announcement is our first large storage framework deal in the Australian market.
What trends are you seeing in the energy storage sector?
Storage is now being seen for what we in the industry have known all along, that it is one of the key components of the energy transition.
Now that the case for storage has been proven, the size of new projects is in the hundreds of MW in contrast to the tens of MW we were seeing last year. Demand overall has increased. Utilities and IPP’s that are thinking about adding storage to their mix in the next year or two will avoid delays if they finalise their decisions within the first half of this year.
What does 2021 have in store for Wärtsilä?
Delivering for our customers. We ended the year with a large pipeline of projects which will be commissioned throughout 2021. We have spent the past three months gearing up for this execution challenge. In addition, we will continue to invest in GEMS to connect energy assets to energy markets and help our customers maximise monetisation of their storage assets.
What do you think of the current state of the energy industry in Australia?
The Australian energy market is really exciting. The energy transition is moving so fast that you can actually see it and as a result identify and quickly start working to solve the associated challenges.
I think one of the reasons that the transition has so much momentum here is because it’s placing a lot of attention and resources on the country’s existing energy challenges which cause a lot of volatility. Some of the country’s energy infrastructure will also need to be replaced in the next decade. These are opportunities to improve Australia’s grid by integrating advanced technology and renewable energy systems, which are better suited for Australia’s geography and the energy issues it causes. The country has an isolated, reasonably weak grid and doesn’t have the ideal interconnection among its states. Part of this is because the power system is stretched over vast unpopulated distances in contrast to its peers which have densely populated cities that act as energy hubs.
Storage is a big part of the solution for Australia. Wärtsilä’s GEMS IntelliBidder makes it possible to monitor all of the energy markets in the country and handle arbitrage; dispatching energy to markets to maintain the frequency and thus stability of the grid as the need for supplemental power and transmission challenges arise. There really isn’t a way to do that right now. IntelliBidder is just one of the tools in our GEMS smart software platform which monitors, controls and optimises energy assets whether standalone or integrating and managing an entire hybrid energy plant or fleet.
What do you think the Australian energy landscape will look like in five and 10 years?
In five years’ time, the Australian grid will be one of the most renewables rich energy grids in the world.
Wind and solar penetration will be fully unlocked by the addition of GWs of storage. It will be the poster child for how to manage the energy transition to a carbon free portfolio.
Do you have a message you’d like to share with your energy industry peers?
We are heading to an energy transition where renewables will become the dominant power source. The advent of renewables is creating the need for flexibility. This is the ability to somewhat instantly offer backup in case something happens and the renewable system can’t generate power: clouds for days, a major storm, no wind, etc.
From an energy storage standpoint—they are the obvious gap filler to perform that service. But they have their own limitations. If whatever is causing the inability to produce renewable power is an issue for an extended period and long duration storage is needed beyond a few days, then the battery will run out of power too.
It makes more sense financially and to ensure we can guarantee grid stability and reliability at all times. Thermal assets such as flexible power plants solve this challenge. Right now, Wärtsilä has flexible engines that run on gaseous, liquid, and biofuels, providing backup power for renewables; and they are in operation for an average for 400 hours per year for systems where renewables are the default power source. This is what we provided AGL for the Barker Inlet Power Station.
Eventually, these engines can run on anything that doesn’t create emissions: biofuels or hydrogen, renewable generated gas, when these fuels are available at scale. It’s easy to get to 80 per cent renewable power, the last 20 per cent will be technologically and financially challenging otherwise.
Islands were actually the first to realise the benefit of renewable power and work to achieve ambitious renewable energy goals and are a test case for what it will take to get there. Wärtsilä has been brought in on several occasions to help overcome the hurdles to getting to those higher rates of renewable integration and optimisation. From this work we’ve found that triple hybrids are the answer—they incorporate some amount of storage paired with thermal generation and some form of pure renewable generation such as wind or solar.
One of our projects is in the Azores off the coast of Portugal. We were able to reduce their LCOE from 26 cents a kwh to 16 cents a kwh with the addition of energy storage. With our GEMS energy management platform that we’ve continued to evolve over the last decade, we are able to forecast the wind and solar and its load demand. GEMS then optimizes how and when the system draws directly on wind or solar power generation or sends it storage, and then it optimises the fuel consumption of the engines by only drawing on them when renewables are not available. The system is able to maximise the amount of renewable penetration up to as high as 60 per cent as a result.
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