The economics of residential battery storage in Australia

Wednesday’s story about the rapidly approaching status of socket parity for solar and battery storage sparked a lot of interest, and a bunch of email requests asking for more information.

That story pointed out that if Brisbane-based Redflow could increase the number of cycles in its zinc-bromine flow batteries, it could be cost competitive with the grid within a few years.

redflowHere’s some more information from the report from Australian broking house Morgans. The table below is instructive because it includes the estimated capital cost of the storage system, plus the integrated systems manager. It notes that at its current cycles capability of just 1,000, the technology costs $1.29/kWh – effectively pricing it out of the market.

But that cost is lowered by half if the number of cycles is doubled. If the cycles can be increased to 3,500, and the kWh of storage increased from 8 to 10, then the cost of the technology falls to just 29c/kWh.

That, says Morgans, is very possible. And it means that the technology will be competitive with the grid.

“If Solar currently costs 10-12c (unsubsidised) then Australian energy storage will not be competitive with average grid prices any time soon. However with storage costs of ~30c there could still be a commercial case for peak shifting,” Morgans notes.

Without that increase in cycles, and peak pricing, the short term the economics of using a ZBM in conjunction with renewables at a household level in Australia doesn’t look compelling.

“For ethically or environmentally motivated individuals the ZBM is still an option, just don’t do the maths. The other alternatives that looks more likely over time is for the use of ZBM’s for peak shaving (i.e. versus expensive peak rates rather than average grid rates) and for off-grid or remote locations.”

redflow costs

Morgans says the big value uplift for shareholders would come from mass market acceptance e.g. households using renewable energy in conjunction with ZBM energy storage systems or to overcome peak power rates. The key to reaching this target lies in lowering the cost per kw hour and the most significant driver of this is cycle life.

But it also suggests the biggest deployment could be made at network level.

The Australian grid, it says, is built for peak performance and consequently household costs per kw hour continue to rise. Thus distributed generation for utilities could be a viable option for Australia to reduce continued investment in a grid built for peak usage (typically 10 – 20 days per annum). “They should be questioned as to why this is not being actively explored.”

Comments

5 responses to “The economics of residential battery storage in Australia”

  1. Pied Avatar
    Pied

    Don’t get this article, OpzV lead acid are half the price already of the ZBM with more cycles (1600 at 80%DDOD) Redflow use the OpzV in their off grid systems now.

    1. suthnsun Avatar
      suthnsun

      +1 3500 cycles from a 1000 seems a step too far away. Alternatives look far better at this stage and foreseeably

  2. Askgerbil Now Avatar
    Askgerbil Now

    ZBM’s developer RedFlow is one of the newest entrant’s into the energy storage market.

    A number of more developed product offerings are available.
    1. Prudent Energy markets vanadium redox flow batteries invented at the University of NSW in 1985.
    2. Ecoult markets the “Ultra-Battery” invented by the CSIRO.
    3. VYCON markets flywheel energy storage systems.
    4. GKN recently acquired the flywheel energy storage technology developed by Williams Grand Prix Engineering.

    There are some alternatives to energy storage for power during exceptional periods that occur briefly each year.

    These make it possible to go off the grid at a lower capital cost than buying additional energy storage that is rarely needed: Electric generators such as those produced by Hyundai, Honda and Yamaha, and – for the future – the Uniflow Generator that uses the Pritchard steam engine inventions. http://www.uniflowpower.com/technology/uniflow-stationary-steam-generator.aspx

    1. Ken Fabian Avatar
      Ken Fabian

      I think flow batteries like vanadium bromide and vanadium redox have enormous potential to take homes entirely off the grid – besides storage capacity being expandable independently of the charge/discharge cells, electricity stored as liquid electrolytes in tanks offers the possibility of physical delivery of charged electrolytes, that could be exchanged, providing a last ditch option should storage be run too low. Costs, as well as life expectancy look like they need improving to really take off. Costs can come down a lot just through economies of scale.

      As an aside, organic quinone based flow batteries are a new development that offers (so they are claiming) a lot more cycles without degrading. A long way from lab to market though.

  3. Mike Shurtleff Avatar
    Mike Shurtleff

    http://www.greentechmedia.com/articles/read/aquion-energy-adds-20m-in-vc-for-grid-scale-battery-plans – January 2014
    “Aquion Energy Closes $55M VC Round for Grid-Scale Battery Plans” “Sodium-ion batteries for $250 per kilowatt-hour? Aquion plans scale-up and real-world trials.” “Aquion Energy says its sodium-ion battery technology can solve these problems. The Pittsburgh, Pa.-based startup says its technology can deliver round-trip energy efficiency of 85 percent, a ten-year, 5,000-plus-cycle lifespan, energy storage capacity optimized to charge and discharge for multi-hour applications, and perhaps most notably, a price point of $250 per kilowatt-hour — much lower than the $500-and-up per kilowatt-hour of today’s competing technologies.”

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