Monash Univ. to explore energy storage market design
The Australian Renewable Energy Agency (ARENA) on Monday announced $495,000 in funding to the Grid Innovation Hub at the Monash Energy Institute, Monash University to conduct a study exploring the integration of storage into the energy markets.
The desktop study funded by ARENA, on behalf of the Australian Government is aimed at exploring alternative market design that could support energy storage technologies and design efficient incentives for storage operators to enable cleaner investment signals for storage. This will include assessing how day-ahead markets combined with balancing markets, similar to parts of the US and European markets, could be more suitable for a market transitioning towards more bulk storage. In addition, the study will investigate market structures for new system services such as inertia, and study the risk of market manipulation by owners of storage assets.
Studying different energy market designs for storage would help to lead to the changes required to achieve an efficient transformation of Australia's electricity system towards our net zero goals, said Darren Miler, CEO of ARENA.
"Further investment in storage solutions such as pumped hydro, large and small-scale batteries is vital to continue Australia's uptake of variable renewable energy into the grid," he added.
As the traditional generation retires Australia will need storage to play a bigger role in firming up and balancing its electricity system. Furthermore, the current market rules for storage technologies have not proved to be helpful in promoting the efficient allocation of energy storage resources.
The latest study is intended to inform policymakers and market participants rather than formulating prescriptive policy recommendations.
ARENA noted the project aligns with the findings from the Energy Security Board's Post-2025 Electricity Market Design, which recommended further investigation of the longer-term need for ahead markets and the development of an inertia spot market.
"For a successful transition to a low carbon energy future, energy markets must reflect the full value of all the services modern technology offers," said Professor and Chairman of the Monash Grid Innovation Hub.
"Services from battery storage are not valued clearly at present, and this exciting research will reveal ways in which markets can better reflect their value to guide investment."