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Market reform, not subsidies, needed to unlock “massive potential” of battery storage

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The Clean Energy Council has called on governments and industry to work together to accelerate the uptake of battery storage in Australia, which it describes as one of the biggest innovations in the energy sector since the invention of electricity.

In a report titled Accelerating the Uptake of Battery Storage, released on Thursday, the CEC lists a number of initiatives it argues are necessary to unlock the full benefits of energy storage for Australian consumers.

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It says that subsidies are not needed to encourage the adoption of battery storage by households, although government “support” should be provided for demonstration projects that can identify barriers and grow confidence and familiarity with battery storage solutions.

The most critical support measure, it says, is to unlock the full value of battery storage by setting tariffs that allow consumers to realise the economic benefits of the technology, and reduce demand for electricity at peak times, thus reducing the costs of the entire electricity network.

The current electricity tariff structures do not do this – more specifically, they don’t allow the benefits to “flow to the private householders who would be investing in battery storage.”

Most critical, it adds, is that network distribution tariffs are designed in a way that allows customers to realise the full value of installing storage and that future tariff changes are “not at the detriment” of these customer benefits.

“Battery storage has massive potential in Australia to help Australian consumers better manage their own electricity use, alleviate the pressures on the electricity network, and maximise the advantage of the more than 1.5 million solar systems already installed on homes,” said CEC chief Kane Thornton in a media statement.

“But there is a global race on to attract investors and technology innovation in the sector, and Australia cannot afford to be complacent. There is a lot to do and it is important that industry and governments work together to unlock this exciting innovation in the energy sector.”

The recommended initiatives range from making changes to electricity pricing structures in some states; to the introduction of smart regulation to overcome barriers to uptake; creating a framework for industry safety and integrity; and better information for consumers and support for demonstration projects.

Governments could also play an important role in helping to find innovative business and financing models, and build capability and capacity within the industry, the report said, while also ensuring supportive regulations relating to building codes, planning regimes, fire and environmental safety or electrical and network regulation.

The CEC also recommends undertaking Australia’s most comprehensive technical report of storage safety, to be completed in collaboration with CSIRO, and creating a Battery Storage Endorsement for solar installers, as well as a consumer guide for households and small business.

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  • Pfitzy

    Wind-down of coal subsidies should also offer incentives to research projects in solar, wind, and other renewables. The reports coming in from around the globe, most of which are referenced on this very site, show that coal is starting to suffer a crisis of confidence from the financial movers and shakers.

    Investment return on renewables is only going to get better as price winds down and maintenance costs are realised to be small.

    The challenge is going to be finding the gains in storage media to get battery lifetimes up to the same standard as panel lifetimes.

  • wmh

    I applaud the CEC’s pre-empting of punitive measures directed at solar but batteries are not the only energy storage method or even the cheapest.

    Hot water can store 55 kWh/m^3 compared to Lithium batteries
    up to 140 kWh/m^3. Water costs 22 cents/m^3, and with the cost of the
    tank, hot water storage costs $100/kWh, compared to $1000/kWh for batteries.

    Heating is the largest energy use in the southern half of Australia so store energy as heat in domestic hot water and for hydronic home heating.

    These days the cheapest way to heat the water is PV feeding a variable output voltage inverter (not grid-connect) to a standard electric hot water service.