In this edition of New Energy Expert Insights, we sat down with Joanna Leigh, Country Manager of Quintas Australia, to discuss Retrofitting BESS on solar PV projects.
| Joanna Leigh is the Country Manager of Quintas Energy Australia, with a focus on Asset Management, 24/7 control room activities spanning operations, bidding, and trading, as well as development, construction management, and advisory services. |
Quintas Energy Australia, part of the global Quintas Group, manages over 8GW of assets across the country. The team delivers specialised asset management, technical advisory, financial, analytics, and development services for solar PV and Battery Energy Storage System (BESS) installations. With offerings like 24/7 control room services, technical assessments, and comprehensive revenue reporting, Quintas Energy Australia works closely with contractors, developers and investors to optimise asset performance and maximise returns for stakeholders.
What does retrofitting BESS on solar PV projects practically involve?
Retrofitting an existing solar photovoltaic (PV) project to include a battery energy storage system (BESS) is a complicated process, which generally involves the following steps:
- Initial Assessment
While some solar PV projects are designed to be “BESS-ready,” it is crucial to undertake a red flag due diligence to identify potential barriers. This due diligence will, for example, identify if amendments are required to land tenure agreements or authorisations to enable the envisaged retrofitting. It will also comment on the technical and financial feasibility, which is often impacted by whether an AC or DC connection is pursued.
- Grid Connection Considerations
The optimal size of the BESS will be determined considering grid connection limitations. For instance, a solar PV project with a 100 AC generation capacity may only allow for 20 to 25 MW of load capacity for a BESS. This discrepancy necessitates careful consideration of how the battery will be operated, impacting the project’s overall efficiency and profitability.
- Compliance and Testing
AEMO undertakes Dynamic Model Acceptance Testing to assess whether the BESS integration complies with current grid performance standards. This process can be lengthy and costly, depending on how old the existing PV plant is and what generating performance standards it was approved on.
- Upgrading Equipment
Existing inverters, including firmware and the power plant controller, may need to be modified or replaced to maximise the project performance after BESS integration. Depending on the PV design, hybrid controllers may also have to be installed to enable DC connections.
Why are market participants pursuing this retrofitting? What are the benefits and why is it required?
Many solar projects in the National Electricity Market (NEM) are not generating the anticipated returns due to prevalent economic curtailment, especially during shoulder seasons, which can last several months. BESS offers a solution by storing excess energy generated during peak sunlight hours for discharge when needed, helping optimise output and improve financial performance. Regions like Queensland and South Australia have been particularly affected, prompting operators to consider retrofitting with BESS.
Why is Quintas different to its competitors in the retrofitting process? What makes your approach more comprehensive than competitors?
Quintas leverages its extensive relationships with Original Equipment Manufacturers and its operational expertise on successful BESS integration. Unlike many standalone PV systems, adding BESS requires a robust 24/7 control room, which we provide, ensuring continuous support from development through construction to operational management. While some investors attempt the integration themselves, they often lack detailed knowledge of their site and the nuances of PV operations, which often leads to mistakes.
Furthermore, Quintas excels in analysing previous projects, understanding the intricacies of existing installations, and identifying potential challenges. This holistic support model ensures that our clients are well-equipped to manage their systems effectively, setting us apart in the retrofitting landscape.
Should there be any government intervention/support in this space?
The Australian Government should reduce the requirements for upgrading the grid and provide incentives for adding BESS to established solar PV projects. The integration leverages existing infrastructure, which is more cost-effective and quicker than adding new generators or substations.
Moreover, effective government regulation should be implemented to prevent the overdevelopment of projects in this free market and to efficiently allocate resources where they are truly needed. In doing so, this ensures better outcomes and more strategic use of capital.
What are the barriers/challenges to successful BESS retrofitting?
Investors prefer fully wrapped solutions that minimise their risk exposure and are reluctant to take on additional responsibilities associated with BESS integration. However, the nature of BESS requires a more hands-on approach, shifting a greater share of risk to the investors.
Also, as margins continue to tighten in the energy market, many investors attempt to add BESS without hiring an expert to assess and analyse the technical feasibility. Unfortunately, this can lead to costly mistakes, as some companies that attempted to manage risks independently have struggled or failed. Underestimating the challenges of BESS integration can lead to significant operational and financial pitfalls, highlighting the need for a more informed and cautious approach.
What is happening in other jurisdictions with regard to BESS integration?
One key difference between Australia and other regions like Europe and the U.S. is the base load energy. Both Europe and the U.S. maintain a substantial amount of nuclear energy, which provides a stable base load that cannot be easily turned off. This contrasts with Australia’s grid, which is less stable and more reliant on variable renewable sources. Consequently, the integration of batteries is uniquely suited to Australia’s needs.
AEMO’s 2024 Integrated System Plan forecasts that by 2050, more than half of homes in the NEM are likely to have distributed energy resources (DER), such as rooftop solar, with the capacity of 86 GW. While tapping into this DER market would be crucial in the future in Australia, the challenges associated with DER, such as unstable grid operation, should be managed first.
Ultimately, there’s a pressing need for all energy participants to engage with the grid. As more individuals choose to go off-grid (often only accessible to wealthier households), the burden of maintaining the grid falls increasingly on those who remain connected. This creates a vicious cycle where the costs of grid maintenance rise, further straining the system and jeopardising its sustainability.
What else can / should be done to promote BESS integration?
Investors do not need extensive background knowledge before approaching Quintas, as a preliminary red flag due diligence can be completed quickly to evaluate feasibility. Prioritising this due diligence within the processes of network service providers and AEMO could significantly expedite the integration process. With optimal timing, projects could go from zero to fully commissioned in just over a year, representing the fastest way of enhancing energy storage capacity using the least resources.
Moreover, leveraging existing infrastructure through BESS can provide substantial benefits without the environmental impacts associated with constructing new facilities. This approach not only maximises the efficiency of current assets but also minimises land use, as adding batteries typically requires only minimal modifications to existing solar sites.
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
