CHAIR: Senator Roberts. 

Senator ROBERTS: Thank you for being here again. My questions go to the cost, capacity and suitability of large-scale battery storage. I’m going to reference the Large Scale Battery Storage Funding Round from 2022. ARENA put $176 million of taxpayers’ funds into eight batteries, with a total of two gigawatts of dispatchable power. That was in the media release from Chris Bowen on 17 December 2022. For how long could those batteries dispatch that full two gigawatts of power? 

Mr Miller : On average, across that portfolio of eight batteries it’s approximately just over two hours at full power. 

Senator ROBERTS: Two hours at— 

Mr Miller : Full power. 

Senator ROBERTS: What’s the total of gigawatt hours that those batteries represent? 

Mr Miller : I think that 4.4 gigawatt hours is the total. 

Senator ROBERTS: Okay. Have all eight of the batteries been constructed? 

Mr Miller : Not yet. They’re under construction—at least half of them are under construction. Some of them might have been completed—a couple of the earlier ones. We announced quite recently that the AGL battery has actually doubled in capacity since we announced the funding. They’ve chosen to increase the capacity by two times. And there are another three or four that are still to be announced as reaching financial close and construction. 

Senator ROBERTS: How many have been built? 

Mr Miller : Do you have that? 

Mr Kay : Yes. Two are currently in advanced construction— 

Senator ROBERTS: So none have been built? 

Mr Kay : None are operational at this stage, but there are two that are in advanced construction and others that are at various stages of planning and preconstruction. 

Senator ROBERTS: So there are two at advanced stages of construction and no others under construction? 

Mr Kay : Yes, that’s right. 

Senator ROBERTS: What was the total cost of those projects—well, they’re still underway. What is the total cost now envisaged to be? 

Mr Miller : As you suggested, correctly, ARENA’s commitment was $176 million. Mr Kay might have the precise number for the capital costs of those batteries, but I recall that our grant sizing was about seven per cent of the cost of the batteries—a substantial cost, in the billions of dollars, for those eight batteries. 

Senator ROBERTS: So we’ll just have to work out the total cost by dividing by seven or eight and multiplying by 100. Something on that media release intrigued me in preparing for today—that media release from 17 December 2022. It talks repeatedly—at least three times—of ‘grid forming inverter’ technology. What is ‘grid forming’? Or is that just a mistake from ‘grid firming’? 

Mr Miller : No. It’s correct language. Grid forming means that those batteries have the capability to provide very high frequency support to the energy system. So you would know that the energy system operates at 50 hertz, so 50 cycles a second. That ability to keep the grid operating at 50 cycles a second is traditionally provided by spinning generators from coal and gas plants. 

Senator ROBERTS: Hydro, nuclear— 

Mr Miller : Not nuclear; we don’t have that in Australia. 

Senator ROBERTS: No. But nuclear can provide it. 

Mr Miller : In theory, yes. If we had that, it would provide it. But, in Australia, that’s provided by coal, gas and hydro. And, in the absence of coal and gas, what we need is resources to do the job of keeping the grid at that 50 hertz frequency, keeping the system stable, providing the right voltage waveform, and also being able to what’s called ‘black start’—have the grid commence operation from nothing—and that is not a service that traditional batteries without grid forming inverters can provide. What the grid forming inverters provide is the ability to form the wave signal of the grid and stand up the grid without any other support. 

Senator ROBERTS: So, correct me if I’m wrong, I’ll just put it into simple language, coal, nuclear, hydro and gas are all synchronous power generation sources, and they’re stable. Whereas, solar and wind are asynchronous and need something added to make sure they’re stable and produce 50 hertz. 

Mr Miller : That’s a fair lay representation of the scenario. Correct. 

Senator ROBERTS: Thank you. I also was intrigued to notice that Minister Bowen’s press release on 17 September 2022 said: 

Over the past decade, we saw policy chaos cause a reduction of 3GW of dispatchable power in the grid, enough to power over two million homes. 

What was the cause of that loss of 3 gigawatts? He’s saying that it’s policy. But was that specifically coal fired or gas fired exiting? 

Mr Miller : I haven’t delved into those numbers. I’m sure they are correct; but I wouldn’t be best placed to comment on generators entering and exiting the market. I’d refer that question to Minister Bowen if he [inaudible] it. 

Senator ROBERTS: Okay. Who do I refer it to now to take on notice? 

Senator McAllister: Senator, over the period in question it is the case that 4 gigawatts of dispatchable generation capacity left the system and only one was constructed to replace it, or commissioned to replace it. I do not have the source document for that fact, but I have examined it before and I can assure you that it’s possible to obtain it, so I’ll take that on notice and get back to you. 

Senator ROBERTS: Thank you. Last question, Chair. Mr Miller, in your opening statement you say in financial year 2022-2023 ARENA approved $544.1 million—that’s over half a billion dollars—60 projects valued at over $3.5 billion, representing the agency’s largest value of funds approved in a single year. How many of those funds were deployed on investments that were needed because of solar and wind? In other words, are they additional costs to solar and wind? 

Mr Miller : As a general statement, ARENA hasn’t supported to any material degree wind projects. Wind has been commercial since the agency [inaudible] 

Senator ROBERTS: Sorry, I wasn’t clear in my question. I didn’t mean that you’re investing in solar and wind; I meant that you’re investing in technology or equipment that is needed because solar and wind, for example, is unstable. Or are they to supplement solar and wind? 

Mr Miller : If you take those battery projects, for example, which would have fed into that number of $544 million, absolutely, clearly one of the things we were trying to do in that program is provide supporting technology to allow further penetration of solar and wind. So that kind of work, plus the work we do on grid integration—one of our key priorities—would be to support increasing shares of solar and wind energy. Ultimately, all of the technologies we support are in the furtherance of increasing the renewable energy penetration and competitiveness in Australia. So even the hydrogen work that we do—while I couldn’t characterise it as being needed to support solar and wind; it is a technology set that relies on increased penetrations of cheap solar and wind to provide the energy source to make the hydrogen. So it’s ultimately all related to renewable energy supply and competitiveness. All of that funding would be [inaudible] 

Senator ROBERTS: Thank you for a very clear answer. So these are additional costs that are needed for solar and wind. I wonder if gen costs from CSIRO incorporates them—that’s not for you; that’s just a wonder.