- Article
As the global push to cut carbon emissions accelerates, ensuring a reliable and affordable supply of energy has become essential. A study by Mimi Mokka from Sumitomo SHI FW highlights the critical need for long-duration energy storage solutions, like Liquid Air Energy Storage (LAES), in Western Australia’s South West Interconnected System. Read on to find out how these technologies mitigate the challenges posed by the intermittent nature of renewable energy sources.
As countries aim to reduce carbon emissions and move away from fossil fuels, they face the complex task of ensuring energy security, affordability, and sustainability – often referred to as the energy trilemma. This trilemma encompasses the need to provide reliable energy, keep costs manageable for consumers, and minimize environmental impacts.
As the penetration of wind and solar power into the grid increases, their intermittent nature presents new challenges to grid operators responsible for maintaining a stable and reliable supply of electricity.
Decarbonizing power systems often requires a mix of renewable energy sources, complemented by various energy storage technologies. These storage systems can effectively fill the gaps when the sun is not shining, or the wind is not blowing, thereby helping to ensure a consistent and reliable energy supply.
To explore the challenges associated with integrating renewables and energy storage into power systems, Mimi Mokka, Power System Analyst at Sumitomo SHI FW, conducted a research study modeling future energy scenarios for the South West Interconnected System (SWIS) – the largest electricity grid in Western Australia. Her study provides insights into the least-cost pathways for decarbonizing the SWIS. It also explores the potential role of liquid air energy storage in facilitating this transition, particularly in managing the challenges associated with increasing variable renewable energy integration and meeting Australia’s emissions reduction targets.
While Mokka’s study focused on Western Australia, similar market challenges exist in other regions, including India, the US, and the UK, as these countries move away from fossil fuels in the generation mix.
Finding the Least-Cost Mix of Generation and Storage Technologies for Decarbonizing the SWIS
Mokka’s in-depth power system modeling study examined the challenges of the SWIS and evaluated its energy storage requirements from 2025 to 2050.
“The study evaluated the future contributions of utility-scale technologies to the SWIS while considering their specific properties, climate targets, and the political landscape in Western Australia,” Mokka explains.
“A least-cost pathway model was formulated to determine the optimal capacity mix for a decarbonized SWIS. The model was executed using SAInt, a commercial power system modelling software developed by encoord. It included considerations of capital expenditure, operational costs, and the viability of different technologies, among other things.”
The modeling results demonstrated that installing new renewable energy (RE) capacity is more cost-effective than keeping existing fossil fuel-based facilities operational in the short term.
“The first emissions reduction target in Australia is set for 2030. Therefore, there was no policy-related urgency to expand RE capacity or retire fossil fuel-based facilities before that year. However, the model still opted to significantly expand RE capacity prior to 2030, indicating that it was more cost-effective to do so,” Mokka says.
The Critical Role of Liquid Air Energy Storage in the SWIS
Mokka’s study demonstrated that long-duration energy storage technologies, such as liquid air energy storage will become essential over time – a conclusion reinforced by modeling from Energy Policy Western Australia (EPWA).
“Long-duration energy storage is needed because short-duration storage solutions are insufficient to address the challenges posed by fluctuations in renewable energy generation,” Mokka explains.
“The model showed a significant uptake of long-duration storage like LAES especially in scenarios where battery costs reflected recent investments in WA and their expected lifetime was assumed to be 10 years.”
Liquid air energy storage technology uses readily available air, cooling it into a liquid for storage and later converting it back to pressurized gas to drive turbines and generate electricity, thus enabling energy shifting from day to night. It is a location-agnostic solution that can be deployed anywhere in the grid and has a small footprint. What is more, LAES supports grid stability through the provision of services such as synchronous inertia, voltage regulation and short circuit power.
“LAES can provide grid stability services traditionally offered by fossil fuel-based or nuclear power plants,” explains Ashok Krishnan, Market Development Manager at Sumitomo SHI FW.
“This includes services such as inertia, voltage regulation, and short circuit capacity. Combining these grid services with the long-duration storage capabilities of liquid air energy storage makes it an attractive technology for the energy transition.”
Urgent policy reforms needed to make the energy transition successful
Mokka’s modeling, along with the SWIS Demand Assessment by EPWA, indicates that long-duration energy storage will be needed in the SWIS by the 2030s. However, there is a significant mismatch between the grid's requirements for long-duration energy storage and the existing policies.
“The current market mechanisms and policies largely favor shorter-duration (mainly 4-hour) storage projects and do not incentivize investments in longer-duration projects,” Krishnan says.
“Without policy changes, investors lack confidence in making returns on long-duration storage.”
According to Krishnan, urgent policy reforms are needed, or the SWIS will not have the necessary long-duration energy storage capacity to replace state-owned coal-fired power plants by 2030.
To bypass slow, extensive market reforms, Krishnan suggests that the government could directly procure the long-duration storage capacity required by the grid through need-based, targeted procurement tenders offering long-term offtake contracts. This would provide certainty for investors without requiring complex regulatory changes.
“New South Wales, for instance, has a legislated long-duration energy storage capacity target of 28 GWh by 2034, and issues annual procurement tenders to guarantee investment,” Krishnan explains.
“What they have essentially done is enshrined into law a requirement to procure a certain capacity of long duration energy storage capacity.”
Regardless of the approach the government decides to take, action must be taken within the next 12 to 18 months to ensure that long-duration storage projects are developed in time to meet the 2030 deadline for replacing coal-fired power plants.
“Otherwise, the grid may not have enough RE and long-duration energy storage capacity when coal plants shut down owing to the long lead times for developing large projects,” Krishnan concludes.