David Green, Founding Partner, Lyon Group. 

Today, the latest in a series of confirmations of very large grid expenditure that will land heavily on consumers’ power bills, feels like the right day to make public an alternative approach that Lyon conceived and commenced developing more than four years ago. 

Lyon is now making public its development of Australia’s first Virtual Transmission Line (VTL), with a view to offering an alternative and more optimal approach to network investment as the Australian energy sector transitions to a renewable energy future. As shown in Figure 1, this concept can be characterised as MurrayLink 2.0.

Lyon stands apart from most in the renewables sector, which will welcome AEMO’s announcement today that very large transmission infrastructure augmentation will proceed in Western Victoria. AEMO’s Western Victorian RIT-T Project Assessment Conclusions Report (PACR)[1] comes only five months after ElectraNet published the PACR for the SA Transformation RIT-T in February 2019.[2]

Both processes have favoured huge grid augmentation programs.

We don’t deny that the inevitable and escalating shift from reliance on a relatively small number of generators to a patchwork of inverter-based generation requires new network approaches. And it is true that this will have to include transmission augmentation.

However, the interests of consumers are not well served by embarking on major augmentation programs without appropriate consideration of options that enable optimisation before augmentation, the embrace of which would allow right-sizing of new infrastructure and less of a cost impost on energy users large and small.

In determining the location of its Riverland and Nowingi projects, Lyon strategically selected network locations that will benefit the most from local, firm, dispatchable energy, while providing the greatest range of revenue streams for the projects.

Lyon’s large-scale solar and battery storage projects create a new virtual grid operation which provides the option to defer or in some cases reduce investment in grid reinforcements and, based on independent analysis undertaken by Advisian, provides 15% additional transmission capacity which will help reduce electricity prices.

Viewed as a portfolio, Lyon’s Riverland and Nowingi projects provide a combined 180MW/720 MWh of advanced battery storage, located on either side of the existing 220MW MurrayLink Interconnector. These two projects together will deliver rapid resiliency and boosted energy transfer capabilities for this crucial transmission corridor.

The two projects together constitute Australia’s first VTL. In developing these projects, Lyon is providing an option to lift transmission constraints 10x faster than the time required to construct a new interconnector and at a fraction of the cost.

Lyon’s VTL solution aligns with AEMO’s Integrated System Plan, providing:

  • Reduced electricity prices by deployment 10x faster than a transmission solution;
  • Long duration storage to firm renewable generation;
  • 15% additional transmission capacity, delivering congestion management to unlock inter-regional Renewable Energy Zones and enable greater interconnector asset utilisation;
  • New competition for peaking generation; and
  • Resiliency to support power quality through Fast Frequency Response.

Because of their proximity to the very large new transmission upgrades that will commence in 2022, the Riverland and Nowingi projects stand to benefit from the greater transmission diversity and export capacity that will be enabled by implementation of AEMO’s Western Victorian RIT-T and ElectraNet’s SA Transformation RIT-T. However, an over-reliance on transmission upgrades is sub-optimal as compared with proven solutions such a VTL. Lyon’s VTL option will provide a faster and more optimal outcome leading to reduced electricity costs and enable more accurate investment decisions surrounding the Interconnector Regulatory Tests.

VTLs can discharge over long durations to meet load requirements in the local area during peak hours, without the need for transporting electricity through congested grid lines, then reversing to act as a sink. The VTL also reduces network congestion and forms virtual power lines to benefit greater regional power flows for other renewable generators.

Once completed, the Riverland and Nowingi projects will represent Australia’s first VTL development.  This VTL announcement by Lyon also constitutes the third announced project of its kind in the world, alongside Terna’s 35MW BESS in the congested Southern Italy region and RTE’s 36MW BESS in France.[3]

In progressing development of the Riverland and Nowingi projects as a VTL, Lyon has worked closely with its advisers to undertake detailed analysis of the benefits that can be achieved and has inter-reacted with AEMO and the Victorian Government.

Figure 1 – Virtual Transmission Line

[1] See https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/Victorian-transmission-network-service-provider-role/RITT/Reports-and-project-updates

[2] See https://www.electranet.com.au/wp-content/uploads/projects/2016/11/SA-Energy-Transformation-PACR.pdf

[3] https://irena.org/-/media/Files/IRENA/Agency/Topics/Innovation-and-Technology/IRENA_Landscape_Solution_05.pdf?la=en&hash=2F3E54D25E74F47E0B1A94EC551CF1E9E4D2E6E

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