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Conventional fossil-fuel-based power systems are undergoing rapid transformation via the replacement of coal-fired generation with wind and solar farms. The stochastic and intermittent nature of such renewable sources demands alternative dispatchable technology capable of meeting system stability and reliability needs. Battery energy storage can play a crucial role in enabling the high uptake of wind and solar generation. However, battery life is very sensitive to the way battery energy storage systems (BESS) are operated. In this paper, we propose a framework to analyse battery operation in the Australian National Electricity Market (NEM) electricity spot and contingency reserve markets. We investigate battery operation in different states of Australia under various operating strategies. By considering battery degradation costs within the operating strategy, BESS can generate revenue from the energy market without significantly compromising battery life. Participating in contingency markets, batteries can substantially increase their revenue with almost no impact on battery health. Finally, when battery systems are introduced into highly volatile markets (such as South Australia) more aggressive cycling of batteries leads to accelerated battery aging, which may be justified by increased revenue. The findings also suggest that with falling replacement costs, the operation of battery energy systems can be adjusted, increasing immediate revenues and moving the battery end-of-life conditions closer. [ABSTRACT FROM AUTHOR]

Australia is one of the leading countries in energy transition, and its largest power system is intended to securely operate with up to 75% of variable renewable generation by 2025. High-inertia synchronous condensers, battery energy storage systems, and grid-forming converters are some of the technologies supporting this transformation while facilitating the secure operation of the grid. Synchronous condensers have enabled 2500 MW of solar and wind generation in the state of South Australia, reaching minimum operational demands of ≈100 MW. Grid-scale battery energy storage systems have demonstrated not only market benefits by cutting costs to consumers but also essential grid services during contingencies. Fast frequency response, synthetic inertia, and high fault currents are some of the grid-supporting capabilities provided by new developments that strengthen the grid while facilitating the integration of new renewable energy hubs. This manuscript provides a comprehensive overview, based on the Australian experience, of how power systems are overcoming expected challenges while continuing to integrate secure, low cost, and clean energy. [ABSTRACT FROM AUTHOR]