Eco Investor November 2017

Pre-Profit Securities

NSW's Largest Grid Support Battery

Shares in Tag Pacific doubled in October to a three year high of 10.5 cents. During that time Tag made two announcements - its subsidiary MPower won a contract from Endeavour Energy to design, build and integrate a 1 MW battery energy storage system (BESS) that will be NSW's largest grid support battery system; and MPower also launched what it said is its next generation of battery energy storage capability.

The BESS is for a new residential estate at West Dapto near Wollongong, and will be operational by the summer of 2018. It will augment the grid during peak demand, and potentially delay the need for major capital expenditure due to the growing power demand in the residential area. It will also function as a microgrid. MPower will manage all aspects of the project, from design through to ongoing support and maintenance.

Tag said the adoption of this technology is expected to experience exponential growth, with the cost of battery storage continually reducing at the same time as technology improves.

Endeavour Energy's General Manager Asset Management, Ty Christopher, said the BESS is a trial and is set against a backdrop of dramatic changes for network businesses in the way they connect customers and communities to the grid. "These changes are being driven by customers embracing new technologies such as solar and battery storage and taking greater control through access to real time data about their energy use.

"As part of this transition, our customers have told us they want us to be working to secure their future electricity supply and help them reduce their electricity bills. The experience gained from this trial will help us build and operate a secure, reliable and affordable network in the future."

Mr Christopher said "Battery storage systems have significant potential to reduce network capital costs, help manage load growth, peak demand, power quality and supply interruptions. This trial will allow Endeavour Energy to quantify the benefits of battery storage in a real, grid-scale setting and provide us the expertise to utilize this technology as future needs arise.

"We believe battery energy storage at West Dapto could reduce network investment by up to $1 million per year to keep downward pressure on our network charges."

Mr Christopher said similar battery systems could be deployed in other growth areas of Endeavour Energy's network to defer the construction of up to four new zone substations by 2024.

MPower said the launch of its next generation battery energy storage capability will augment the grid in times of peak demand and minimize networks' expenditure on infrastructure that would otherwise be needed to increase the capacity of local substations. The main innovative aspect of the new offering is its grid forming capability. The system can disconnect from the grid and form its own grid to seamlessly supply the local network. It can also reconnect to the main grid seamlessly. During grid failure it can continue to operate its own local power grid.

The design is modular and scalable, and can be rapidly deployed into network problem areas of all sizes.

Nathan Wise, chief executive of Tag Pacific, also highlighted another of MPower's renewable energy successes - its 5.6 MWh energy storage project in the Cook Islands which it won in June. "It's a very exciting time for MPower and we are in active discussions with key players across the region to roll out further implementations of our capability," he said.

Shareholders will be happy the share price has finally moved off its two year slump, which followed a three year down trend. (ASX: TAG)







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