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Exclusive interview: Inside South Australia’s world-leading energy transition

Graphic: Sean Creighton/The Progress Playbook
Graphic: Sean Creighton/The Progress Playbook

Home to 1.9 million people and the city of Adelaide, South Australia is playing an outsized role in the energy transition.

Aside from getting 72% of its electricity from wind and solar over the past 12 months, the state has pioneered new technologies — including grid-scale batteries and ‘synthetic inertia’ — and set the benchmark for what’s possible with rooftop solar.

And it’s not done yet. Among other projects, the state is adding a green hydrogen-fuelled power plant to its energy mix as part of its plans to get to 100% net renewables by 2030. It should reach that milestone by 2027, according to the transmission network operator.

We spoke to Nick Smith, executive director of the department of energy and mining’s growth and low-carbon unit, about how South Australia established itself as a world leader in the energy transition — and what comes next.

How it started: Smith credits the state’s efforts to “create a streamlined pathway for wind developers” as a key driver of the transition to date.

To attract renewable energy developers, South Australia simplified the permitting process and set out to create a more certain policy environment, he said.

It worked. An analysis by researchers at the Australian National University found that the average lead time for project approvals is 15-26 months shorter in South Australia than in other states.

The local government also offered generous feed-in tariffs and subsidies to homes and businesses that installed rooftop solar panels. The state now has 2GW of installed rooftop solar capacity.

And it made a bet on big batteries before they were in vogue — installing the world’s first sizeable lithium-ion battery facility six years ago (the Hornsdale Power Reserve, or ‘Tesla big battery’).

Here’s what those efforts have yielded:

  • The amount of carbon emitted per unit of electricity generated has fallen 62% since 2016, when the state shut its last coal-fired power plant.
  • Wind met 45% of the state’s electricity needs in the 12 months to end-September 2023. Rooftop solar contributed another 20%, and large solar farms 6%.
  • At times, rooftop solar output alone exceeds the state’s power demand.
  • The share of renewables in the mix has surged from zero prior to 2007, to 36% in 2015, and above 70% today.
  • The state now uses five big batteries, plus synchronous condensers (spinning machines), to provide critical grid services such as inertia and voltage control, and to store energy, placing it on track to eliminate the need for gas turbines.
  • It also operates 11 virtual power plants (VPPs), where household solar and battery systems can be aggregated and deployed as a single unit to assist in balancing the grid. Tesla’s VPP scheme, which is focused on social housing units, has significantly cut energy bills in low-income communities.

The road ahead: To get to 100% renewables by the end of the decade — a goal shared by Denmark, Portugal, New Zealand, and Kenya — South Australia is adding more synchronous condensers and big batteries to maintain the strength of the grid and store power for when it’s needed most.

By 2030, it’ll have 1.4GW of installed grid-scale batteries, according to the grid operator.

It’s also banking on green hydrogen, which it will use to store renewable energy, for exports to Europe, and to supply manufacturers of low-carbon steel and other goods.

The state is building a 250MW hydrogen electrolyser — which will split water into hydrogen and oxygen using wind and solar energy — along with a storage facility and a 200MW hydrogen-fuelled power plant that’s set to open in early 2026.

“Green hydrogen will be key to net zero,” says Smith, who is leaving the state government in November to start his own decarbonisation-focused company.

So, too, will demand management initiatives, which encourage electricity use to shift away from periods of high demand, typically early evenings.

Smith says South Australia is “on track” to get to 100% net renewables by 2030, and some modelling suggests it could get there as soon as 2027. But the last stretch will be the toughest — “the challenge increases as we get closer to that target”.

Meanwhile, the state’s green ambitions have led it to become a testbed for new technologies, including ‘solar hydro’ storage and molten silicon storage.

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