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Coalition to accelerate battery storage in Australian households

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The Australian government has announced that it wants to accelerate the deployment of battery storage in Australian households, chiefly as a means to reduce huge peaks in demand and reduce costs for consumers, but also to cut emissions.

Environment minister Greg Hunt says he wants the two institutions that have been brought within his department – the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) – to bring forward the widespread deployment of battery storage.

“Australia has the highest rate of household solar in the world,” Hunt said in emailed comments to RenewEconomy. “This makes Australia an ideal place to develop storage and battery technology.”

tesla powerwall twoIndeed, the battery storage market in Australia is widely tipped to take off in the next year. One of the triggers will be the arrival of the first Tesla Powerwall products in Australia in the next two months, although other international manufacturers such as Panasonic, LG, and Kokam already have products in the market.

Next week, Enphase will launch its “plug and play” battery storage product into Australia. Like Tesla, Enphase is targeting Australia because of the unique nature of its markets – high electricity prices driven by soaring grid costs, particularly to meet “peak” demand, the world’s biggest penetration of rooftop solar, and lots of sun.

Added to this, tariffs are also being changed in NSW, Victoria and South Australia, which will mean that some 230,000 households used to receiving premium tariffs will get little or no payments for exports to the grid. Those who produce more electricity than they need will then have an incentive to store it in a box for use in the evening.

Both Tesla and Enphase believe that parts of the market are already at grid parity, although it should be pointed out that this is a complex calculation, depending on solar array size and orientation, consumption patterns and tariff structure.

 It’s staggering to think that it has taken this long for a federal government – be it the Coalition or the Labor governments before it – to realise the opportunities in household solar and storage. But now both the Coalition and Labor are enthusiastically talking up the opportunities of households leading the energy revolution.

It’s a winner at all levels. It is clear that the combination of battery and storage will reduce costs for individual consumers, and for the system as a whole, although some incumbents may bleat about lost revenue opportunities.

Hunt says he recognises this and wants to accelerate this rollout, and to promote local battery storage technology.

“Australia has a large market for storage, with a high number of residential solar users that could benefit from storage technologies,” he said.

“Storage is also good for grids and networks – it can smooth out energy supply, reduce peak loads, mitigate the need for network upgrades and allow utilities to better manage power supply and demand.”

“Storage allows for wider and deeper uptake as well as greater grid stability. Greater uptake means reduced emissions.

“All stakeholders recognise the importance of flattening peak demand. Network operators recognise that this is part of their responsibility of reducing the costs to rate-payers.”

ARENA and the CEFC have already been active in the battery storage space at the household level, but the Coalition government might want to impress on regulatory bodies

CEO Ivor Frischknecht has said he expects a fall in battery costs of between 40 and 60 per cent by 2020, and says that one million homes are hungry for battery storage. Morgan Stanley has predicted that 2.4 million homes could use the technology within 10 years. BNEF predicts an even higher uptake by 2035.

ergon storage bigARENA has funded battery storage developers such as Ecoult, and SinoEv, as well as storage integrator Sunverge. It funded research by AECOM that saw battery storage as one of the industry’s “megatrends”, and has backed the development of a national energy storage “knowledge bank”, based out of the University of Adelaide.

ARENA is also supporting trials being run by Ergon Energy and Sunverge that will see how battery storage can help  households trade their output of solar, and even combine to act as a “virtual power station” to respond to grid demands. Ergon has already installed battery storage at grid level, saying it is cutting costs by around 30 per cent.

Another trial based on a similar concept of using solar and storage to trade power is being run by Reposit Power in Canberra, also funded by ARENA. The agency is also funding trials in Canberra by IT Power that compare the performance of lithium-ion and lead battery.

The agency is also funding large scale battery storage installations at Coober Pedy, Rio Tinto’s Weipa mine, Sandfire Resource’s  Degrussa copper mine in WA, and a large scale storage project in South Australia, which already sources 40 per cent of its electricity demand from variable wind and solar.

The CEFC says it is also supporting battery storage through its provision of low cost finance via banking groups CBA and NAB, as well as Origin Energy. It is also financing the Degrussa solar plus storage installation.

“Australian cities can benefit from a broad range of clean energy technologies, such as LED street lighting, solar PV and battery storage, smarter energy management, waste-to-energy plants and cleaner cars,” CEFC CEO Oliver Yates told the Smart Future Cities conference in Newcastle on Thursday.

“The CEFC’s investment in these areas is helping generate cleaner power, accelerate the take up of energy-efficient technologies and cut energy costs for businesses, local governments and households.”

 

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  • Jacob

    Time to ban new peaking gas power stations.

    And ban further gold plating of the network.

  • BsrKr11

    Good news. ..but how are they going to support the role out?

  • Ron Horgan

    What goes around comes back to bite em!
    After being exploited for years by a rapacious monopoly coal power industry, the resulting high cost power, has given new competitors the opening to both give us lower cost power and destroy the assets held by the greedy vested interests.
    Natural justice?

  • Ian

    Mm, very interesting. Sounds like the government wants to throw taxpayer dollars at battery storage. That way they can buy votes and ramp up their green credentials. Perhaps if they throw $ one or two billion at batteries in the form of subsidies no one will notice $ 5 billion of subsidy for coal transportation in NQ to the proposed Carmichael coal mine. In 2 years time when labor gets in power they can fine-tune this subsidy and make it means tested. Of course early adopters will maybe get 50 % off the cost of a $2000/ KWH battery system ( imported at $ 600/ KWH) . But, here’s a hint: Wait a year or two for the price to drop to $300/KWH battery storage and then pounce on the subsidy before the pollies panic and cut off their taxpayer-funded largess. Oh, sorry am I just repeating the recent history of rooftop solar from the time of the Kyoto climate summit to the time of Campbell Newman.

    • Roger Brown

      Thanks to “Newman” , i have a 3 kw solar power on my roof . With his cutting the solar support , it forced me to borrow money and sign up to the .44 cents a Kwh + .06 cents from Origin . BYE BYE power bills !

      • Ian

        Don’t you wish you had installed 5kw when you had the chance!

        The point is though, as nice as it is that the government wants to bankroll solar storage batteries, there are a couple of problems with this. Suitable lithium batteries are still very pricy. There is a real possibility that within 1 to 5 years the price of batteries will drop dramatically. Do we really want this country to be the ‘early adopter’ for the world using taxpayer money, especially when we do not even manufacture these things in Australia? Would waiting a year or two not be more prudent? Distributed solar technology has already matured and seen the initial large price reductions, why not continue to support this aspect of a future grid in preparation for cheap battery storage.

        Rural communities and towns which rely on long distance electricity transmission would already be cost effective for solar plus storage micro grids. Targeted support for these would be a good use of taxpayer funds.

        With new battery players’ on the market like tesla ,Panasonic, Bosch and the like, government subsidy could be geared to a particular supply price for battery systems. For instance a battery system offered at $1000 kWH fully installed and connected might attract a subsidy of 10 %,. A system at $800/KWH could attract a subsidy of 20%. A $600/KWH system ,a subsidy of 30% and so on. Actually a simpler way would be to offer a subsidy of say $100/ KWH regardless of installation price. With a multiplier for distance from a city, the more remote a site is ,the more rebate should be given.

        A further idea for promoting solar storage could be peak capacity pricing for electricity. Instead of charging a connection fee and a usage fee per KWH, rather charge a peak capacity fee. We are told that the cost of providing network electricity is largely dependent on the hardware cost of poles and wires. Someone with a large air conditioner or holiday home will require a higher network capacity than most. Well then charge for the peak capacity usage only or place limiters on peak usage at the meter. For example house A, has a daily usage of 25 kWH and requires a capacity of 5 kW for 5 hours, whilst house B uses solar and storage to limit their peak consumption to 1 kW spread over the entire day. House A will then pay 5 times as much as house B. House A can choose effectively to pay a high KWH rate and not have batteries or can choose to get batteries and pay a reasonable rate.

  • Felix Erwin

    Awesome turnaround – you guys rock!!

  • AllGridEnergy

    AllGrid Energy, Brisbane based, Indigenous-owned, renewable technology company already has WattGrid hybrid storage system on sale. Not just international players in the market!

    • Angela Weber

      That sounds fantastic!! We are totally off the grid in Northern NSW and are looking to se this kind of system as our batteries are getting to the end of their life… This is all very exciting…

  • http://www.facebook.com/people/Christina-Macpherson/100001582350337 Christina Macpherson

    Eventually, it would make more sense to have larger batteries at the local level – shared by numerous houses, rather than every individual house having one.

    • WR

      Why would that be the case?

      Some benefits of siting the batteries in individual dwellings are:
      – It is more energy-efficient to house the batteries as close as possible to the source of generation and use.
      – People’s houses provide a free site for the battery installation. No one has to buy extra real estate to house the batteries.
      – Most importantly, it simplifies the accounts (you don’t have to keep careful account of inputs and outputs along with time-of-use) and allows individual households to control their own supply and use. If I’m planning to use batteries to consistently reduce my evening peak from 4kW to 2 kW, I want to know that the batteries will have the energy to provide the extra 2 kW of power when I need it. Having my own batteries allows me to guarantee the power is there when I need it.

      The network doesn’t care where the batteries are sited as long as they are on the 240V part of the system. The reduction in power flow through the substation is the same with either set-up.

  • adrian hauser

    If they are reducing export tariffs to 0 they should also reduce daily supply costs to solar battery houses.