Aurecon managing director - energy, resources and manufacturing Dr Alex Wonhas told the 2017 Clean Energy Summit in Sydney on Tuesday that Australia had reached a tipping point where renewables are now the lowest cost new-build energy.
However, he said continued innovation was required to improve the grid integration and dispatchability.
"The race is now on for renewable energy to become the lowest cost dispatchable power - power that is always available when users need it," Dr Wonhas told the conference.
The cost of green energy has particularly dropped to competitive levels compared to coal, he said.
Aurecon's review of energy generation assets around the country indicates that in today's market wind power can now be built for as little as $60 per megawatt hour and solar for about $75/MWh, which is well below the estimated $80/MWh for new coal without carbon capture and storage or $90-100/MWh for new combined cycle gas, he said.
"The 114 MW Sun Metals plant in Townsville that will provide power to a zinc smelter from next year onwards is a case in point that renewable energy has become a viable cost competitive solution even for power intensive industrial applications," Dr Wonhas said.
"As the penetration of renewables increases, the challenge for the coming decade will be to find cost effective ways to make renewable power dispatchable.
"At current battery costs of [about] $750/kWh, building a dispatchable energy system is still significantly more expensive than gas. For dispatchable renewable energy to become competitive with gas, further cost reduction of batteries by two-thirds and renewable generation by one third are required."
Aurecon just announced its involvement in the ground-breaking NT 5MW/3.3MWh battery energy storage system, one of Australia's largest grid-connected storage solutions in Australia.
Subsidies question
Asked whether battery storage paired with a renewable generator such as the Tesla-Neoen joint venture would be commercially viable without any form of subsidies, Aurecon energy leader, east coast Australia Paul Gleeson told Energy News that "very much" depended on the application, and the country of application.
"At the moment, if we take Australia as an example, the commercial viability of a battery connected to the grid has marginal commercial viability but this is likely to change fairly quickly, as each new project helps to bring the production and deployment costs down for subsequent projects," he said.
"Commercial viability may also change depending on rule changes and the way the market is operated.
"What we see are recommendations that may require some level of storage to be added to renewable energy projects, such as wind and solar.
"We may see new projects forced to deploy some level of storage or firming. This will impact on the viability of projects which will have to be assessed on a project by project basis."
Batteries can also be used to augment network assets and defer upgrades of lines and substations.
Gleeson said that while the savings associated with each of these were unique, the fact that multiple network service providers had started implementing batteries on their networks suggested they are commercially viable in some locations.
"In addition, when you connect a battery to a remote grid, in the NT or small communities for example, the economics of these projects are very different to connecting to the national grid and again, viability must be assessed on a project by project basis," Gleeson said.
"This is evident at Alice Springs - which is a unique, small grid but still viable."
Both the Bungala Solar One and Bungala Solar Two projects near Port Augusta, South Australia which reached financial close in May will be delivered without financial support from government.
