Should Australian households quit the electricity grid?

To quit the grid, or not. Suddenly, it’s a choice that households in regional areas, towns, and even in the suburbs of our major cities, are going to be able to make. Battery storage is offering possibilities never before considered by the mainstream.

Environment minister Greg Hunt raised a few eyebrows this week when he said it was “inevitable” that “significant” numbers of people could and would quit the grid.

There seems no doubt that many will. Some are so frustrated with the big utilities, and big business in general (see the VW emissions fraud), that they will quit the grid as a matter of principle or a declaration of independence.

Some will do it for privacy: I was told of one family that spent $40,000 in inner Melbourne to quit the grid because they distrusted smart meters.

Soon enough, falling battery storage costs will inspire others to do simply because it saves them money.

But is that the outcome that we should be aiming for?

Over the next year or so, Australian households will be presented with numerous proposals to install battery storage.

Tesla-Powerwall-price-570x473Tesla and Enphase are using Australia to launch their global battery storage products, and others such as Bosch, Panasonic, LG, Sunverge and Samsung are following.

Local battery storage developers such as Redflow and Ecoult are putting residential and commercial-scale storage products on to the market, and any number of smaller players are packaging up products.

Many will be tempted by battery storage because they feel they are getting screwed by the utilities. Not just by expensive electricity, driven by the soaring cost of delivery (network costs), but by negligible payments for exports back into the grid, special fees for solar houses, and rising fixed costs that make it harder to benefit from reduced consumption.

In NSW, Victoria, and South Australia, some 230,000 households will lose their premium solar tariffs at the end of 2016. This is the key market that new players are targeting. Even the incumbent utilities are gearing up with their own battery storage products to try to lock in customers.

But is leaving the grid the outcome that the outcome that we really want? For some, building new houses, or even new communities, it is a no-brainer because the costs of connection are so outrageously expensive. They will never actually join the grid.

tyalgum-storeThe same will be said of new housing developments, because technologies now make it cheaper to do so. Some existing townships, such as Tyalgum in northern NSW, could do so because it will save them money. Even some networks see this as the way to go, a series of microgrids across the network.

Indeed, it is pretty much accepted that the energy system will change so dramatically in coming years. It will move from a centralized grid, to one where at least half of all demand is supplied – and stored – locally.

This means business models have to change. The CSIRO Future grid study said if they don’t, and utilities fight back, then one-third of consumers could get fed up, or see economic benefits elsewhere, and leave the grid.

That, though, has serious impacts on remaining consumers, with dwindling numbers asked to share the fixed costs of the grid. Networks show no sign of wanting to reduce their costs, because that means taking a write-down on assets and accepting lower revenue. Indeed, they are even talking of imposing fines, or compulsory fees, or at least finding a mechanism to get their upfront costs back quicker.

RenewEconomy asked Hunt to clarify his comments about battery storage and the grid. He said it was a matter of individual choice.

“It’s up to individuals,” Hunt told RE at the All Energy conference. “Some with personal reasons might choose to do so. The vast majority of people will stay on the grid, but some will choose to go off. That will be their own choice.”

Hunt says that within the grid battery storage offers a couple of outcomes. “They might be fully self-sufficient, or, more probably the case, it (battery storage) will smooth the load from what (consumers) need from the grid and what they put back into the grid, so people will be able to store by day and use by night.

“Storage, I think will be increasingly an integral part of solar, so people will be buying energy systems, not just solar systems. As a consequence of that that will help reduce demand on the grid.”

Hunt would not amplify exactly how he would encourage battery storage, other than to say he would encourage the Australian Renewable Energy Agency and the Clean Energy Finance Corporation to continue their programs. He did hint, though, that the “Green Cities” program being flagged by new prime minister Malcolm Turnbull may include some initiatives.

Hunt says storage will have benefits in reducing peak demand, and presumably reducing network costs.

The question is if those grid costs can fall enough to compete with the those new energy management systems that Hunt is talking about, particularly as battery storage costs are tipped to fall by 15 per cent a year in coming years.

The other big question is whether the policy makers can move fast enough to catch up to the new technologies. There is increasing evidence that they are being left behind, partly by the reluctance of most utilities to let go of the business models they have been attached to for decades.

Ian McGill, from UNSW, told the All Energy conference last week that policy making in Australia had been “shambolic”, and reactive rather than pro-active.

Still, he argued that quitting the grid would be a challenge, mostly because of the added costs. There was not much point in individual consumers gold-plating their own private network in the same way that the big networks did.



Tony Vassallo, from the University of Sydney, and who took part in the CSIRO Future Grid study, agreed – on the policy failure and the costs required to quit the grid. “Economically, it doesn’t quite make sense yet to go off grid – to get the required reliability you have to gold plate your own system, you won’t get the money back,” he said.

But as Glen Morris, from the Australian Storage Council noted at the same conference, many customers don’t care, and don’t think of solar and storage in terms of return on investment or payback time.

To them, Morris said, it is like a car, or a TV, or a piece of furniture. No one is asking about ROIs when they buying those assets. And they may not either with solar and storage.

Comments

47 responses to “Should Australian households quit the electricity grid?”

  1. orko138 Avatar
    orko138

    Question: for an ‘average’ urban Australian household, would
    having a 4.5Kw PV installation and a 10kWh Tesla powerwall (for instance) be
    sufficient for the household to leave the grid??

    Dishwashers, aircon, home-entertainment, electric cooking, irons, vacuum cleaners, and the host of other appliances would be a pretty heavy draw

    1. Malcolm Scott Avatar
      Malcolm Scott

      And the electric vehicle that one day will be part of their home fleet. Perhaps bought as the second vehicle, but will soon by preference become the vehicle of choice. EVs are that good. About another 10 kWh per EV per day needs to be provisioned – very cheap compared with petrol

      1. Reality Bites Avatar
        Reality Bites

        I would predict that EV’s will be common within 5 to 10 years and going off grid will be at a cost few will choose, that is unless you can afford to gold plate your own network and continue driving a fossil fuel propelled vehicle.

      2. Peter Campbell Avatar
        Peter Campbell

        Yes, as a long-term EV driver (>6 years), an EV is the ‘primary’ car, the one that is taken as the first choice for the longer trips around town, which are all within range. The ‘secondary’ petrol car stays at home most of the time, mainly taken out by our daughter for short trips or by us for longer trips out of town.

    2. Peter Campbell Avatar
      Peter Campbell

      … and the car charging at (say) 2-3kW for a several hours overnight to be full and ready for the next day’s driving.

    3. Chris Fraser Avatar
      Chris Fraser

      And a pool with an ASHP heater ….. many kWh just there.

    4. MaxG Avatar
      MaxG

      No… 🙂
      We use on avg 16kWh/day, have a 20kW battery (LiFePO4), which we can drain to a SoC of 20% (getting a max of 18kW out of it). We have 2 x 6kW in panels with one 5kW inverter each, producing a max of 10kW (more like 9.5kW/h). See http://www.pvoutput.org/intraday.jsp?id=11239&sid=34144 and hit the purple square under the day selector to get an idea.

    5. orko138 Avatar
      orko138

      Thanks to all who responded.

      It sounds like going ‘off-grid’ might be a bit of a myth unless consumption is cut dramatically. Makes me wonder why we still talk about it so much as a viable solution for consumer energy woes.
      The future will likely incorporate more like a decentralized peer-to-peer network utilizing the existing network assets, with some centralized generation being dispatched to meet the demand that the local peer-to-peer cant supply.

      1. Goldie444 Avatar
        Goldie444

        I have solar panels and an electric car (hybrid but most of my driving is on electrons) but the one one device I have that shows me why I will never go off grid 100% is the small in-home display wireless electricity meter (Pipit 500 model) on my desk. It collects energy usage information from my Smart Meter and displays it on a LCD touch screen and shows current usage of solar export to grid and import usage.
        When I boil water, use an iron, electric toaster or stove for just a few minutes, my 2.5 kw panels do not produce enough even on a perfect solar day.
        Your life style would with to charge if you think you can live a “normal” modern life off grid or you would have to spend 50,000 plus to cover the not so perfect solar days or night usage.

        1. Peter Campbell Avatar
          Peter Campbell

          But the point of the battery is that it smooths out those short duration heavy loads. The PV system doesn’t have to keep up when you have both the kettle and the toaster going if the battery can. A quite modest battery can produce 10s of kW for short periods (eg. in my electric car when accelerating away from the lights up a hill). It’s the difference between kW and kWh. I notice a lot of people writing above and every newspaper gets those mixed up very frequently.

        2. rhjames Avatar
          rhjames

          The point here is that your 2.5kW grid is far too small if you want to be off the grid, and you need a lot of expensive battery storage, plus a generator for those rainy periods. It’s certainly possible to go off the grid, but it’s very expensive, and for what purpose? Why bother?

        3. humanitarian solar Avatar
          humanitarian solar

          Hi Goldie444, thanks for your kindness. With the kWatt meter on your desk, even though they measure kWatts in real time, they can be deceptive as some high power appliances aren’t switched on for long. Eg if your kettle is 2000Watts and takes 30 seconds to boil, it has used the equivalent of 1000Watts for a minute or 1/60th of a KWatt/hour of power, which is approximately 0.017 KWatt/hrs or 17 Watt/hrs. If you have 2.5kw of solar panels and your in Sydney for example, they will produce 7.5kw/hrs in winter and 16.25kW in summer. Even though the meter shows us your panels can’t keep up with the kettle if it’s switched on with other appliances, the kettle is on briefly while your solar panels produce much more power throughout the whole day. So the desk meter is a good guide for sizing the maximum power of an inverter, which is determined by how many appliances you wish to use at once. If you ever wanted to go off grid what’s critical is how many KWhrs/day of electricity a day you use versus KWhrs/day your solar panels produce. If you have enough even for cloudy days in winter, then you just need batteries to even out days and nights and cloud in winter. hope that’s useful. Cheers

  2. Stan Hlegeris Avatar
    Stan Hlegeris

    There’s a middle course which would make it possible for the grid to operate profitably while shutting down perhaps half of the generating assets.

    I suggest a tariff for a connection with a maximum draw of one kilowatt. Each household could decide how to manage it from there. A house with good solar potential could cover most of its needs with solar PV and batteries. Such a house would only need to draw from the grid occasionally to re-charge its batteries; this would be much cheaper than installing a storage system capable of dealing with the worst case situation at each house.

    A household with lousy solar potential (or a flat with no right to use the roof) could just keep a battery charged with the 1kW supply. An efficient household uses less than 24kWh per day and could be rewarded with lower-price charging during non-peak periods.

    This approach would smooth the demand for electricity delivery and enable us to shut down a surprising number of coal-fired power stations.

    1. Alastair Leith Avatar
      Alastair Leith

      Capacity based fixed tariffs definitely worth introducing in order to preserve the value our Grid provides. But will governments wake up in time?

    2. nakedChimp Avatar
      nakedChimp

      all for it.. give me a subscription plan for x kW that is reasonable and we’re done.

    3. Catprog Avatar
      Catprog

      Would that include limiting exports to 1 kw as well?

  3. Peter Campbell Avatar
    Peter Campbell

    I suspect that for many people there will be something akin to EV range anxiety. An objective analysis might show that they would rarely run out of electricity for the size of PV generator and storage and usage pattern. Nonetheless, they won’t believe it till they have experienced it for a while. So, in the first instance, they will stay connected to the grid until they find they have not taken anything from the grid for ages. It would be a bit like buying a series hybrid EV in order to have a petrol back up only to find the battery charged from the mains does just fine for all the local trips.
    Which gets me to the next point: A suburban household with a largish PV system might have enough generation and storage to run the house but not enough to run the house and the car(s), especially when cars are away from the house most of the time during the day, so car charging happens at night.
    The PV on our roof, just by chance, makes about the same as we actually use in practice for our two electric cars averaged over the year but the timing (among other things) is all wrong for using it directly, and that doesn’t leave any over for the house.
    I think it is far more likely that modest amounts of PV and storage and load shifting (where not inconvenient) will be used by households to minimise using the grid at expensive peak times.

    1. phred01 Avatar
      phred01

      Have u any figures for the size of PV panels that would be required. On clear sunny days 4kw produces approx 20kwr. Increasing the PV capacity to 10kw should make @ least 50kw

      1. john Avatar
        john

        In most states I suspect you can not put in a 10Kw system.
        If you are able to then yes a 10Kw system should handsomely provide enough power to power those EV’s with battery storage.

      2. David Osmond Avatar
        David Osmond

        Someone driving 15,000kms a year (average~40km/day) would need about 8kWh/day to power their EV. A extra 2kW of PV would be about right for this (obviously some variations depending on where you live, and alignment of your roof etc). But that is averaged over the year. The PV is unlikely to provide enough during winter, or on cloudy days, and will likely provide too much during summer or on clear days.

        1. phred01 Avatar
          phred01

          If one had a wind turbine (vertical Type of 2kw) That should most days of the yr. For the other times a genset running flat out charging batteries is more efficient a petrol powered car

          1. Miles Harding Avatar
            Miles Harding

            I have seen a few solar car ports around. Often, this is the only way to escape the tortured roof lines of the modern ‘designer’ home.

        2. phred01 Avatar
          phred01

          If u haven’t got one of those new town houses…..but an old style suburban property with a 1/4 ac block. U might panel the stand alone garage or build a pergola using solar panels as a roof. In our case we have 4kw on 30 deg tilted frames and we plan to add another 6kw pergola that will double up as a car port. I can c in the near future properties with ideal solar aspect will start to attract a premium price

      3. Peter Campbell Avatar
        Peter Campbell

        If you have enough roof space you might get 10kW in but I certainly don’t have that. Half my north-facing roof is full with 1.8kW and half of the other half has a solar hot water system. I could get about another 1kW on but that is about all.
        By the time you consider losses and what sort of EV you have, you might base a guesstimate on needing about 200Wh/km.
        My 1.8kW system in practice makes about as much as we use in two electric cars for all our city driving, but one of the commutes is not very long.

      4. Miles Harding Avatar
        Miles Harding

        The amount of solar needed really depends on where your expectations lie. To continue with a typical (read 1960’s electric dream) consumption pattern, you will need a lot of solar and 10kw of panels may not be enough if no accomodation is made for the season and weather.

        On the other hand, those that have fully embraced the ideas of efficiency and seasonally limited environmental energy are well able to run a household year-round on 2kw of panels or less.

        Total grid independence is much harder than, say, 95% where it may be necessary to defer consumption or import some energy one or two weeks of the year. It is my guess that near double the solar capacity is needed to insulate the household from these short periods.

      5. rhjames Avatar
        rhjames

        You need to have a good look at battery price, and life. About A$350/kWh. If you want a few days storage (eg rainy days) you’re looking at some big dollars.

  4. aaaanon Avatar
    aaaanon

    @orko138:disqus : 10kWh powerwall is their “weekly cycle” model not designed for daily use – so you’d be looking at the 7kWh version (or two of them). If your average daily consumption is below 10kWh and your average PV yield is around 10kWh (4.5kW panels should do the trick, depending on where you live, roof quality, shading etc), you might be alright for a reasonable portion of the year. It’s when there’s a couple of cloudy days in a row that you’ll have trouble – 10kWh won’t get you very far. You could get a diesel generator (as the CSIRO FGF guys assume in their disconnection case) or you can go without. All in all I suspect for most people those options won’t cut it.

    1. aaaanon Avatar
      aaaanon

      @orko138:disqus: you said ‘average’ urban household – so say 6MWh annually. That’s ~16kWh a day. You’ll need more than 10kWh of storage to disconnect and more than 4.5kW of PV for sure.

      Also be aware with the 7kWh powerwall you’re limited to 2kW continuous draw – so you’ll have be careful about when you run things.

      1. Miles Harding Avatar
        Miles Harding

        Powerwall – not a problem with the power limit, as it’s not indended to be used off-grid. The elegance of it comes from the easy interfacing to the 300-odd volt solar DC bus – it looks like a grid tie inverter while charging and the solar panels when discharging. Only integration software is needed to add it to a typical solar installation.

        Most household off-grid systems are 48 volts so that the battery is simple and the DC voltages safe(ish) to be near.

  5. Alastair Leith Avatar
    Alastair Leith

    “Some will do it for privacy: I was told of one family that spent $40,000 in inner Melbourne to quit the grid because they distrusted smart meters.”

    ok.

    1. Miles Harding Avatar
      Miles Harding

      facebook is OK, though?? !!!

  6. Alastair Leith Avatar
    Alastair Leith

    “To them, Morris said, it is like a car, or a TV, or a piece of furniture. No one is asking about ROIs when they buying those assets. And they may not either with solar and storage.”

    And if tesla’s valuation and RRPs are any guide, money no object for many while the economy stumbles along so far avoiding a major post-GFC collapse.

  7. john Avatar
    john

    If I were to build a house now I would put in enough PV and back up storage as well as a gen set to see me through for those few days perhaps 3 in a row where the PV would not give me sufficient.
    As it stands my payments from the FIT will not repay my investment in PV.
    I think that going self sufficient from a standing start is the best way to go as an existing consumer it is not economical so am stuck with the present system however if I live long enough to see out the end of the present FIT I would go off grid immediately.

    1. rhjames Avatar
      rhjames

      What would you do if there’s a couple of weeks of rain? Use a generator for a couple of weeks? What difference does it make if you build a home, or add it to an existing home? It still costs far too much, and for what purpose?

      1. john Avatar
        john

        Mate in fact if you have a decent PV array you will only need the gen set for a few day in 3 or 4 .
        If a Cyclone hits you turn off the grid and go total gen set.
        This is not hard to work out if you build a house now go off gird you will be so better off.
        3 days no problem or 4 or 5 for that matter you need to get up to speed young fellow

        1. rhjames Avatar
          rhjames

          So what would it cost you for a PV system, controller, inverter, support structure, batteries, wiring, generator? That’s the real cost – no rebates from taxpayers?

          My house averages 24kWh per day, so I figure I’d need a 6kW unit, to allow for cloudy periods, and the occasional rainy day. I think I’m looking at around $12,000, plus a generator with wiring. Assume $15,000 all up.

          Now, battery backup. Allow for 3 days, that’s 72kWh. Price is about $350/kWh – that’s $25,200.

          All up, I’m looking at $40,000, which is consistent with the generally advertised price for off grid systems of this size.

          Based on my electricity bills, that’s nearly 17 years to break even, and I haven’t allowed for maintenance and generator fuel, or reduced cell efficiency (typically 80%). I don’t see the batteries lasting that long.

          Sorry, you’re not convincing me.

          1. john Avatar
            john

            You do not need a huge battery back up for 72Kwh
            All you need is a simple gen set that will provide the least demand of power I would think a 5Kw
            If your demand power is above that then get an 8 or 10 mind that is rather large demand power.
            I think you really need to look into what is available it will not cost you that much

          2. rhjames Avatar
            rhjames

            I’ll have to check on the cost of running a gen set, compared to backup batteries.

  8. Farmer Dave Avatar
    Farmer Dave

    In those States where the citizens still own the grid, I think there is an argument that the grid is part of a sharing economy and should be run to benefit those citizens and to minimize greenhouse gas emissions. Small settlements at the edge of the grid could perhaps economically be configured into separate microgrids, but as a society we might find value in keeping most people on the grid. In other words, decisions about the future of the grid should not be narrow economic ones.

    If as a society we decide that the grid is a valuable piece of infrastructure that is worth maintaining, then we may need to find out how much we need to pay electricity prosumers for power exported to the grid to encourage them to stay connected. My guess is that most prosumers would regard a 1:1 FIT less a transport fee as being a fair deal that would keep them connected.

    In other words, I would encourage all of us to think of the grid as a piece of societal infrastructure, and to ask ourselves: putting aside the commercial behaviour of the current batch of grid operators, is the grid worth keeping? If the answer is yes, then policy should be developed around providing incentives for people to stay connected, not incentives for them to disconnect, which seems to be the way it is going.

    1. Jacob Avatar
      Jacob

      And in the states where the grid has been privatised, just buy back 51% of the grid.

      1. phred01 Avatar
        phred01

        That’s already happening the distributor uses offpeak rate ot 17c / 2 = 8c approx

  9. phred01 Avatar
    phred01

    The article flags usage shifting to avoid peak times using battery storage. By current experience solar has changed the usage significantly the peaks are in late afternoon. Battery storage would flatten the 24 hr usage thus doing away with peak & off peak periods so end result will one tariff regime. If u will want to escape the clutches of the electricity suppliers off grid is the only solution. The danger is our govn’ts may legislate on behalf the network providers to institute a “potential” connection fee for off grid properties.

  10. WR Avatar
    WR

    I’ve put together a fairly comprehensive PV+battery calculator. It allows you to trial different combinations of PV+battery capacities for your locale. It requires the use of MS-Excel to run. You can download it and watch my instructional video on how to use it at this youtube link: https://www.youtube.com/watch?v=6FEP2dKXesQ

    If you are handy with Excel you can adapt it for more detailed calculations.

  11. Andrew_Nichols Avatar
    Andrew_Nichols

    Bosch, Panasonic, LG, Sunverge and Samsung are already in the market with Li-ion. Do try and keep up.

  12. GreenGenie Avatar
    GreenGenie

    I like that African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.”

    If we want to make an environmental impact maybe we need to leverage the grid together rather than go it alone by choosing off grid?

    I imagine a time when the grid is dynamic with every connection point (& EV etc) being a node for electron trading, a hive of micro watt commerce just like the way the finance sector makes millions trading shares in thousandths of a second.

    WIth across the grid free enterprise folks will engineer a multitude of ways to make, trade and store energy all the while being driven by a little greed with the unexpected benefit being less carbon burnt.

    That should both satisfy the left, right and entrepreneurial sides of town?

  13. Les Johnston Avatar
    Les Johnston

    The parallel between going of the grid with electricity is a very similar proposition to those of us who, without choice, went “off the grid” and utilise tank water supply. In many ways those who live with tank water face a similar position and they adapt. For starters, water consumption is massively reduced – typically 1/3 that of the mains householder. Consumption is also changes during drought. As energy consumers, those who go off the grid will be surprised by how much and how easily they adapt to a “finite” supply. The off the grid future is very bright for us all.

  14. rick Avatar
    rick

    Well one thing you have all forgotten is that the tax payer paid for the grid and all the ancillaries attached. The fact that Governments have sold it off piece by piece PS I did not get any return on my investment. Also note that the profits from selling electricity and for that mater water and all the associated this was meant to pay for the ongoing maintenance and up keep of this asset. The cost of paying taxes just got a very expensive Tax.

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