Securing a Renewable Grid
How batteries stop blackouts and enable a renewable powered future of abundant energy
In 2016 a once in 50-year storm caused a cascading failure in the South Australian grid that led to most of the state losing power for several hours. Lightning and tornadoes damaged pylons tripping transmission lines and decreasing the network voltage. This caused wind farms to automatically reduce their output to protect the network, overloading the interconnector between South Australia (SA) and the rest of the National Energy Market (NEM) causing it to trip too.
The collapse of the Spanish grid earlier this year bore many similarities to the South Australian experience nine years ago including the fear-mongering around the role of renewable energy in these disasters. The South Australians however did not give in to the anti-renewable scare campaign of the Murdoch Media and the liberal party, instead doubling down on the state’s renewable energy ambitions. Nine years later and the SA grid regularly runs entirely on variable renewable energy (VRE) and has averaged over 70% VRE in the past year. By 2027 this is expected to be 100%. Despite this, grid reliability is better than in coal dependent states in Australia like Queensland and Victoria with 0 major outages since 2017. Queensland and Victoria have both experienced at least one blackout due to failures at coal plants, which are increasingly unreliable during high temperature peak demand periods. Australia's coal fleet broke down 128 times over the 2024-2025 summer period.
The Spanish grid collapse was caused by poor demand planning by the grid operator and a failure of power plants to provide reactive power to manage a voltage surge. Combined Cycle Gas Turbines were unable to start in time to manage the voltage anomaly and as a result an oscillation in grid frequency was able to cause a catastrophic cascading failure. As in Spain, renewables were ultimately shown to not have caused the system blackout in South Australia.
Entirely renewable grids powered by solar, wind, geothermal, nuclear and hydro supported by batteries could be built anywhere in the world. It’s incredible that SA has managed to do this with just wind and solar alone. They have demonstrated the model and now it's up to the rest of the world to catch up. Abundant and cheap renewable energy will be upon us if we can find the political will and fix the broken permitting systems hamstringing the renewable rollout across the West.
So how did they do it? The simple answer - batteries, lots and lots of batteries. Following additional blackouts caused by more storms and load shedding in December 2016 and February 2017 the South Australian government put out a request for tender to build a grid connected battery to improve the reliability of the system. The winning bid was submitted by Tesla and French renewable developer Neoen to backup Neoen’s Hornsdale wind farm.
This was to be the largest battery in the world at the time with 100 megawatt peak output and 129 megawatt hours of storage, enough to power 100,000 homes for 1.29 hours or power 13,000 homes for one day. Enough to power a single house for over 35 years!
Elon Musk bet the South Australian government he could deliver the project in under 100 days and if not the battery would be free. From grid contract signing to grid connection took just 55 days. This is far faster than any other storage technology like pumped hydro or experimental thermal or gravity storage. The rapid pace of installation and connection to the grid was enabled by the modular construction of systems like the Tesla Megapack used in the Hornsdale battery. The bottleneck in delivering these projects is permitting, grid connection and political will - not construction.
By building the large battery modules in a factory battery manufacturers can decrease costs and increase speed. This is something that bespoke projects like pumped hydro cannot do. Australia is currently building pumped hydro to complement batteries for long duration storage. Snowy Hydro 2, which will be the largest pumped hydro project in the world by storage capacity when complete, is already 4 years delayed and more than 6 billion AUD over budget. Pumped hydro does has advantages over batteries in long duration storage but due to their rapid pace of construction batteries make a lot more sense for most use cases worldwide.
In 2020 Neoen expanded the Hornsdale Battery to 150 megawatts of peak output and 193.5 megawatt hours of storage financed by a combination of state government contracts and federal government grants and loans. Six more big batteries are now operational in South Australia constructed by private power companies like AGL as well as renewable developers Neoen and mining company BHP. Seven more are under construction and a further eight have been announced. These batteries are now significant profit drivers for their owners following the development of the market by the state’s procurement of the Hornsdale battery. Initial investment by the state government has now catalysed billions of dollars of private investment Australia wide. This is a lesson we should take forward for other new grid technologies like small modular nuclear reactors and advanced geothermal. Total storage capacity is now over 1.2 gigawatt hours, enough to power over 150,000 homes for 24 hours.
Load Shifting
The purpose of batteries however isn’t to provide power to homes 24 hours a day. By charging during the day when solar energy is cheap and plentiful and releasing energy during the evening peaks when solar generation is low and demand is high, batteries are able to smooth the ‘duck curve’. This enables the midday sun to power your induction hob in the evening and your air-conditioning through the night (unless you live in Europe and you just suffer through the heat instead - which actually disincentivises solar investment due to oversupply).
High solar generation during the middle of the day often drives negative prices during which grid scale battery operators get paid to charge their batteries. Discharging this power during periods of high peak prices in the evenings means batteries can perform energy arbitrage, enabling operators to profit on price variability. Power providers like Flow Power and Amber Electric are already enabling Australian households and small businesses to use their own small scale batteries and solar panels to profit off this price variability now. By accessing the wholesale power market directly, consumers can also profit from arbitrage, reducing power bills further.
Grid Security
Beyond smoothing demand and holding reserve power for those periods of Dunkelflaute when the wind doesn't blow and sun doesn't shine, batteries provide a range of services to the grid that boost stability and give system operators flexibility. It’s exactly these sorts of services that could have helped in Spain’s recent blackout.
Spain’s grid collapse occurred after a substation in Grenada failed, triggering two more substations to fail and tripping the interconnector with France ,which had been exporting 0.87 gigawatts of power. This led to the frequency of the grid becoming unstable and outside its normal range, triggering cascading failures.
Grids must maintain frequency within a set range in order to avoid damaging systems connected to the network which are designed to operate at a specific frequency. In order to prevent this damage transmission lines and generators automatically switch off or ‘trip’ when frequency deviates too much. Traditionally the kinetic energy of the spinning turbines in generators like coal, gas and nuclear plants have been able to provide inertia that maintains system frequency. These turbines want to keep rotating at their current speed, 3000 rpm in 50 Hz grid, due to inertia. If one generator trips and frequency drops, they resist the drop. This resistance causes a release of some of their stored kinetic energy into the grid as electrical power, helping to slow down the rate at which the frequency falls. This can buy time for other assets like gas peakers to increase their output to restore frequency.
Batteries are even better than traditional generators at providing rapid response to frequency deviations and outages in generation by providing a range of services to help support grid security. Synthetic inertia, in which power electronics rapidly detect frequency variations and change a batteries output, mimics inertia provided by synchronous generation. This helps decrease the rate at which frequency is falling because power injection is proportional to the rate of change of frequency. Batteries also provide Fast Frequency Response by adjusting their output if frequency falls outside a preset range, typically within 0.2 Hz of the grid frequency. By increasing or decreasing output batteries can prevent the frequency from changing too much. Batteries can do this in milliseconds whereas traditional generators can take minutes to change their output. If generators trip and outages do occur a gas peaker plant can take 10 minutes to spin up and start providing full power, while batteries can respond in milliseconds preventing cascading failures. Due to this the majority of profit from grid scale batteries has initially come from providing these ancillary grid stability services rather than price arbitrage, although this balance is shifting.
It's this sort of fast reactive change in output that could have helped in Spain when the gas turbines could not start up fast enough. Not only are batteries more capable, they are cheaper and faster to deploy too. Managing all these complex services and revenue streams has become a very competitive market and one where AI driven platforms like those provided by UK startup Habitat Energy can give battery asset managers a competitive edge.
Batteries give grid operators flexibility as they try to protect the network. Spain was reliant on slower-acting gas plants, hydro, and imports which were not able to respond in time leading to a full system blackout. If Spain had more grid scale battery storage installed this could have been prevented. In the unfortunate situation where a full system blackout does occur batteries also enable utility operators to restart power generation faster. Large batteries provide ‘Black Start’ capability by providing the power needed to restart large power generators like coal or gas power plants which can otherwise take hours or even days to restart generation.
Solving Transmission Problems
Batteries can also help manage grid congestion, an increasing problem in modern grids. Energy grids are large distributed systems where the generation and demand are not always closely located. This means that the transmission lines that carry the electricity can become congested if there is too much generation in a local area. In 2022 the UK wasted enough energy to power a million homes costing consumers over £800 million due to grid congestion. By absorbing power when its in local oversupply and discharging at lower power batteries can help manage this congestion and reduce bills.
Building out grid connected battery storage and renewables will require significant investment in transmission infrastructure but this could be mitigated by increasing integration of distributed energy resources. This includes solar panels on rooftops, household batteries, EVs, heat pumps and other smart systems like hot water heaters. By connecting these systems together over the internet they can function much like large scale batteries. Network operators can intelligently control demand and supply through the use of household capacity providing many of the same services that grid connected big batteries provide. Except instead of all the batteries being co-located in a single site they are distributed around cities in homes and small businesses negating the need for large new transmission lines.
This sort of aggregation of distributed energy resources is referred to as a virtual power plant. Virtual power plants are an opportunity not only for network operators to ensure the stability of an increasingly renewable grid but also for households to make a return on their investment in clean technologies through participation in the energy market. Tesla has been trialling virtual power plants with their Powerwall customers in the UK, South Australia and California. Customer batteries are controlled remotely to provide services to the grid and in return households are compensated financially. In South Australia this has been running since 2018 and has so far been shown to be performing strongly in controlling network frequency and voltage with high customer satisfaction.
Household batteries are still too expensive
Uptake of household battery storage will be critical to reaching net-zero by 2050. The Australian Energy Market Operator (AEMO) forecasts that up to 75 percent of storage needs could be met by behind the meter uptake of household batteries. But subsidies or zero interest loans for these technologies for households are needed while upfront capital costs of these systems remain high. The Tesla Powerwall for example costs almost $12,000 USD upfront before installation costs.
To incentivise the uptake of behind the meter storage the Australian government recently funded a AUD 2.3 billion program to subsidise up to 30% of the cost of home batteries. This is already driving faster adoption of larger and larger home batteries with capacity equivalent to the original Hornsdale battery in South Australia being installed every two weeks. Italy, Germany, the UK, Japan, California and Hawaii all have existing subsidy schemes that have driven greater adoption. This adoption of batteries will enable 100% renewable grids by managing demand and providing critical grid stability services.
Where state subsidy does not exist startups like Texas based Base Power are reducing the cost for consumers. Texas is set to overtake California as the state with the largest amount of battery capacity, at 17.26 GW in 2026. Texas has seen one of the fastest roll outs of battery storage worldwide and has an incredibly dynamic energy market. To take advantage of this dynamic market and give households back up power Base Power gives households large 25 kilowatt hour batteries, almost two times the capacity of Telsa’s household battery the Powerwall, for just an installation fee. Consumers get back up power during increasingly common blackouts and cheaper electricity. In return Base Power owns the batteries and aggregates them in a VPP that is able to bid into the Texas power market. Base Power can then make money through arbitrage and grid security services.
Building out a fully renewable grid
Since the commissioning of the Hornsdale battery other states across Australia have started building out significant battery capacity with 25 projects constructed across the country and many more under construction. Some projects are as large as 8GWh. The Australian Energy Market Operator (AEMO) forecasts that 49GW/646GWh of storage will need to be commissioned in total to achieve net-zero by 2050. Discharging at this peak capacity of 49GW storage would last for just over 13 hours. Currently Australia has just over 3 GW of storage.
A 100% variable renewable, 100% reliable grid is a complex challenge and one that can’t be met by batteries alone. While batteries might get us to 99% reliability, increasing reliability comes with exponentially increasing costs as longer and longer duration storage or under-utilised dispatchable generation is needed to hedge against potential renewable energy droughts. This will most likely be provided by pumped hydro or gas peaker plants.
Expanding the number of high voltage interconnectors that connect geographically distant generation and demand like the one between Spain and France that failed are also important in combating renewable droughts, which are usually geographically localised. Interconnectors enable power to be moved from areas with more wind or more sun or excess nuclear generation into those regions where demand exceeds supply. In this way they can help prevent load-shedding or ‘brown outs’.
However, gas or hydrogen peaker plants will still be needed to meet extreme peaks in demand or during renewable droughts. Using green hydrogen, if it is ever commercially viable, or even green methane like that being developed by Terraform Industries means that these plants will still be compatible with a net-zero world.
Investment in grid and consumer battery storage across the world can enable the transition to a 100% clean energy grid. South Australia has led the way in creating a clean grid powered solely by wind and solar which will be showcased to world leaders if Australia wins the bid to host COP31 next year. With nuclear, hydro and geothermal also available in many other places there is no reason why we can't build a clean energy future while providing abundant reliable cheap power to people everywhere, enabling human and planetary flourishing.
Those interested in how Australia is transitioning to renewable energy without nuclear should check out Reneweconomy.com.au