Global energy storage group AES says clearer direction is needed on how battery solutions can be integrated into the national electricity network under plans such as the federal government's National Energy Guarantee (NEG).
Different renewable energy projects have different economics and the market needs to have the flexibility to determine requirements, says AES Energy Storage's Asia Pacific director Mark Leslie.
"Assigning (energy storage) to every solar farm or wind farm is interesting because it appears that it will be helpful for storage but it would make those projects less economical and not go forward," Mr Leslie said, speaking on the sidelines of a large-scale solar and storage conference in Sydney on Monday.
"And it may not be the ideal location for that energy storage anyway."
The federal government's proposed NEG would allow energy retailers to deliver a set level of ready-to-use power in each state to shore up reliability, while also making them responsible for meeting a lower emissions target.
While an Australian Council of Learned Academies report, commissioned by chief scientist Alan Finkel and released earlier this month, said Australia could reach a 50 per cent renewable energy target without a significant requirement for storage, the government has pushed for increased storage in order to support reliability.
Clarification is needed on the ratio of wind or solar generation capacity to energy storage, Mr Leslie says.
"If you made it a 1:1 ratio as a requirement, there may not be a business case for that amount of storage," he says.
AES was a backer to one of the rival bidders for South Australia's 100MW battery plant - touted as the world's largest lithium-ion battery - that was eventually secured by Elon Musk's Tesla.
That project is about to enter final testing and Mr Leslie said it was great to have more successes in the energy storage industry.
He said Australia has conditions that would create a fertile energy storage market - including about 60 isolated grids across the country, as well as transmission & distribution opportunities.
He expects there is scope for several gigawatts of energy storage to start working in the country over the next five to seven years, but said this would depend on regulatory frameworks and cost structures.
