The Renewable Energy Hub of South Australia - Dean Cooper, Head of APAC (excl Japan)

Amp Australia's landmark Renewable Energy Hub is poised to accelerate the world’s fastest energy transition and drive South Australia to net-zero and beyond with Amp’s Spencer Gulf Hydrogen Energy Ecoplex.

Australia is famous for its plentiful sunshine, exceptional wind conditions, and vast open land areas, qualities that have always primed the land down under to become a leader in the clean energy revolution. And while most of the country’s electricity has traditionally come from coal and natural gas, the last ten years have seen Australians embrace rooftop PV to such a degree that they now boast the world’s highest solar capacity per capita.

According to Dean Cooper, Amp’s Executive Vice President and Head of APAC operations outside of Japan, Australia is undergoing one of the world’s most rapid energy transitions. “A comprehensive energy transition from coal dependence to renewables and flexible generation is underway in Australia,” he said. “Subsidy-free renewable energy growth in Australia is due to superior unit cost economics and is being supported by the Australian states as they pursue decarbonization, job creation, and economic growth.”

Announced in May 2021, the Renewable Energy Hub of South Australia (“REHSA”) is a strategic portfolio of integrated solar PV and Battery Energy Storage (“BESS”) assets located at three key sites. Total investment in the REHSA is expected to exceed AUD $2 billion, and the hub will generate enough clean electricity to power the equivalent of up to 350,000 homes while creating up to 750 construction jobs, many of which will provide much-needed employment in the regional workforce.

“In many ways, South Australia is a postcard from the future, and an example of the pace and scope of the energy transition with the economic benefits of green jobs growth.”

A Renewable Energy Project of Significant Scale

The REHSA portfolio consists of three utility-scale solar PV installations totaling 1.36GW of generation, located in Robertstown (636MW), Bungama (336MW), and Yoorndoo Ilga (388MW). Having already secured land and development approvals, the Robertstown and Bungama projects are expected to begin staged energization in 2023.

Each site location will be hybridized to include behind-the-meter BESS, with a total output capacity of up to 540MW and two hours of storage duration. With the growing necessity to deliver on-demand dispatchable power, Dean said the addition of BESS was essential to reduce asset and portfolio-level risk in a market environment of increasing price volatility.

“Every site will be hybridized. With the growing benefits and falling costs of BESS, the days of standalone generation are numbered, particularly in jurisdictions with high renewables penetration,” he said.

With the announcement of the REHSA, Amp Australia now owns eight solar or BESS projects that are operational, under construction, or in development, including the Hillston Solar Farm (120MW) and Molong Solar Farm (39MW) in New South Wales, the latter of which achieved 100% generation in December 2020, just two months after its initial energization.

“With the scope and pace of its energy transition, Australia is now the market with the greatest MW volume of renewable assets under ownership in the Amp portfolio.”

Dean sees the hub concept as the future of renewable development, as it addresses many of the financial risks associated with traditional standalone solar or wind installations. “The energy hub concept is how we think renewable energy development should work going forward. Developers used to be rewarded through the early acquisition of site locations offering the best irradiation or wind conditions, but that’s been trumped by the criticality of site selection with strategic grid access and system strength,” he said.

Accelerating the World’s Fastest Energy Transition

South Australia is in the midst of an unprecedented shift towards clean energy, with the aim of achieving net 100% renewables by 2030 and net 500% by 2050, the latter of which will be largely driven by the production and export of green hydrogen.

“Australia’s energy transition is probably the fastest in the world, with South Australia’s being the most advanced state in the country,” Dean said. “Every market around the world is going through the same transition, but at varying rates of adoption due to the key determinants of government support, energy resource, and grid adequacy. With projects such as the REHSA, Australia is definitely at the forefront of this energy transition.”

This trend was on full display during a sunny afternoon in October 2021, when South Australia met 106% of its energy demand from solar PV, a feat that’s expected to increase in both frequency and duration going forward.

“As all global energy markets address their own renewable transitions, the lessons learned and the business models deployed in South Australia will put Amp in good stead for other energy markets in which we’re active.”

But while Australia has quickly become a leader in solar energy deployments, it’s now also facing the challenges of modernizing its electricity network for the renewable era. Aside from balancing the intermittency of solar and wind generation, there’s a growing need to strengthen the transmission lines between its major population centers, which are often hundreds or even thousands of kilometers apart.

“Grid augmentation is a critical factor in Australia. At the outset, the grid was designed as a ‘hub and spoke’ system, with generation set up near the coal fields of the Hunter Valley in New South Wales and the Latrobe Valley in Victoria, with radial lines running out to the population bases on the east coast,” Dean said. “Now, you’ve got an abundance of lowest marginal cost renewable energy supply which, based on pure economics, is forcing coal generators out of the system. But to harness these abundant, low-cost renewables, the transmission and network grid capacity must expand to keep pace with clean energy supply.”

Robertstown, which will host up to 636 MW of solar generation, was strategically chosen to benefit from the grid augmentation of Project Energy Connect (“PEC”), a 900km, 800MW transmission line that will link the South Australian, Victorian, and New South Wales electricity grids for the first time. When completed, the interconnector is expected to accelerate investment in large-scale renewable energy projects while lowering electricity bills for Australian consumers.

“Having site locations that are on the cusp of, or have pre-approved large-scale interconnectors is a critical part of Amp’s renewable development in Australia,” Dean said. “A key foundation for the REHSA was PEC, which enables the transfer of energy from small population states such as South Australia into the higher-load eastern states of Australia.”

Enhancing Renewables with Utility-Scale Batteries

Dean says the incorporation of over 500MW of BESS assets is a critical factor in the portfolio’s long-term success.

“For any renewable energy deployment in Australia, particularly as Australia is going through such a rapid energy transition, you need to have BESS integrated with generation,” he said. “It’s critical to deploy integrated generation and BESS to reduce asset and portfolio level risk while increasing the upside from widening intraday price spreads.”

“For renewable generators, we believe BESS is no longer an option, but a necessity, especially in markets with such high price volatility.”

Battery storage has become increasingly critical for renewable energy projects in South Australia, with the state’s high rooftop solar penetration often triggering negative price events due to the need to curtail excess supply and keep the grid in balance. “By integrating BESS with each PV asset, we can also optimize the price spread between peak and low-price events while avoiding network constraints,” Dean said. “For Amp Australia, BESS is both a critical risk-mitigation measure and one that optimizes returns.”

BESS assets in the Australian electricity market will benefit further from the recent switch to five-minute settlements announced by the Australian Energy Market Operator. Previously, coal and gas generators would receive payments based on the average auction prices over 30-minute periods, whereas the switch to five-minute settlements allows new inverter-based technologies - such as fast-response battery storage - to compete and ultimately deliver lower market prices for consumers. Established in October 2021, the new rules give BESS owners a more even playing field to stimulate investment in utility-scale batteries.

Pushing Beyond Net-Zero with Green Hydrogen

In addition to significantly bolstering South Australia’s renewable energy capacity, the REHSA will also incorporate green hydrogen and ammonia production as part of the state’s long-term goal of becoming a net exporter of clean energy. One of Amp’s major developments is the siting of the Spencer Gulf Hydrogen Energy Ecoplex, a critical pillar in the South Australian Government’s Hydrogen Action Plan.

“Two of our sites are strategically located near deep-water ports that will leverage existing infrastructure to produce green hydrogen and ammonia from low-cost renewables. Once operational, their production could supply both the domestic market and exports to Asia where Amp has existing operations,” Dean said.

Green hydrogen production uses renewable energy to power large electrolyzers and can help to decarbonize industries in the form of either hydrogen or processed ammonia. But while the green hydrogen industry is still in its early stages, Dean says South Australia has all of the key qualities needed to become a global player.

“South Australia has a very ambitious state renewable energy target of net 500% by 2050, so it’s looking to produce and export significant volumes of green hydrogen,” he said. “The state already has the right export credentials with its deep-water ports and water availability, combined with a very high renewable energy penetration which leads to daytime periods with very low or even negative energy prices.”

“For reliable, low-cost hydrogen production, you need reliable, low-cost energy, and batteries play a critical role in that.”

The integration of battery storage is also a pivotal factor in Amp’s green hydrogen development, helping to normalize the intermittency of solar and wind generation needed to power hydrogen electrolysis. “Batteries would be one technology to help smooth out the supply of wind at night and solar during the day into a reliable and continuous supply of electricity for downstream hydrogen production,” Dean said. “In addition, we can source nighttime wind through contracts or via the spot market to take advantage of the state’s diurnal wind patterns.”

With plans for ongoing investment in South Australia’s green hydrogen infrastructure and production, the Australian Renewable Energy Agency projects that hydrogen exports could contribute $1.7 billion and 2,800 jobs nationally by 2030.

Optimizing Renewable Assets Through Digitalization

Another unique feature of the REHSA is the incorporation of Amp Energy’s proprietary digital energy platform, Amp X, which leverages AI and machine learning expertise to deliver real-time autonomous energy management and grid services.

Dean says the energy hub concept provides an ideal opportunity for Amp to demonstrate the benefits of renewable digitalization and hopes to deploy the Amp X platform across the entire portfolio at some point in the future.

“Amp X’s dispatch algorithms can autonomously orchestrate the grid assets that we have, optimizing the solar generation, BESS, and green hydrogen production using algorithms powered by artificial intelligence,” he said. “The capability for assets to autonomously respond to price signals and network constraints will be the next advancement in the energy hub concept. We believe we are in great shape with our Amp X solution to stay at the forefront of this innovation.”

Amp Australia’s Roadmap for a Greener Future

With the announcement of the REHSA, Dean believes Amp will have a template it can use in other energy markets where the company has existing operations. “We’ve proven we can develop assets at scale. Developing the REHSA concept will be something we can replicate in other fast-growth energy transition markets Amp is active in around the world.”

And in the midst of Australia’s world-leading shift from fossil fuels to renewable energy, Dean thinks Amp’s pedigree of innovation makes the company well-positioned to contribute to advancing Australia’s energy market to net-zero and beyond. “That’s the heritage of Amp as a company. It’s about taking on complex scenarios and challenging problems in the energy markets and structuring risk-adjusted solutions for these opportunities. I think we’ve proven over the life of the company that we do this very well. Providing structured risk solutions in a fast-changing industry is very much a part of our DNA.”

With the REHSA now formally announced and development work underway, it’s clear that Dean and his team see the portfolio as a key contributor to Australia’s renewable energy future. “Energy markets are dynamic systems, rather than isolated components of generation, network, and transmission. The energy hub concept with integrated generation and BESS, combined with load from downstream hydrogen and ammonia, is a large-scale energy system solution. We believe these energy hubs are an appropriate strategy for markets undergoing the greatest energy transitions, such as South Australia.”

Since establishing Amp Australia in 2017, Dean has rapidly expanded his team and believes Amp has all the unique qualities needed to become the country’s leading renewable energy developer and asset owner.

“At our core, Amp excels at structuring commodity risk at large scale, which positions us extremely well to deploy the energy hub concept,” he said. “We’re known as a company of innovators that continually pioneer new opportunities, and that’s exactly where we are headed in South Australia right now.”