Harley Mackenzie

Managing Director, HARD Software

Lessons from the implementation of market systems for utility scale batteries in the NEM

Dr. Harley Mackenzie has been the Managing Director for over 20 years of HARD Software that develops technical tools and solutions for trading, generation and retail operations in the Australian NEM and International energy markets as well as providing consulting services in energy, risk management and aviation. Recently HARD software has developed and delivered the market and operating software for a number of small and large utility battery projects in the Australian NEM. His current passions are focused on reducing the costs of FCAS regulation and contingency services for intermittent generators, developing effective wind and solar software tools and optimizations and developing short term wind and solar forecasting solutions.

Abstract Outline:

Many existing and proposed wind and solar plant generators in Australia and internationally are considering the integration of Battery Energy Storage Systems (BESS) along with their generation assets to provide a means of arbitraging energy spot prices and potentially participating in market ancillary services or capturing energy that might be lost due to curtailment. The presentation will discuss in practical detail some of the recent experiences gained during the system implementation of both small and large BESS projects in the Australian National Electricity Market (NEM). Whilst the market regulator and system operator have been supportive of recent developments in battery technology and new projects, a number of challenges exist with many of the existing specifications and requirements that were initially designed during the market development 20 to 25 years ago, such as:

* The NEM Dispatch Engine (NEMDE) requiring the battery to be registered in the market, bid and operated as a separate load and generator, as a storage model had not been implemented,

* The NEM half hour trading interval settlements producing economic trading incentives that do not matching the system security requirements, which in turn lead to very challenging system implementation challenges.

Given that storage devices as low as 5MW are registered in the NEM as dispatched generators, many of the inherent control and trading controls required by large scale fossil fuel or hydro generators are now necessary for renewable generators. The considerable costs of running 24/7 operations and trading centers are not well suited to the prevailing economic thinking of small-scale operations that have to date been the predominant vehicle for developing and constructing renewable generation in Australia.

HARD software has designed and developed the market and operating software for Hornsdale Power Reserve 100 MW project and other smaller battery installations that use both market optimization and simpler deterministic solutions. The presentation will conclude by identifying the key trading software issues and make specific recommendations that need to be carefully considered for any proposed BESS project in the NEM.