AGL Energy says battery storage “already interesting”

Australia’s biggest energy utility, AGL Energy, says battery storage is already an “interesting” proposition for consumers, and it expects radical changes in the home energy market in coming years.

“We are at the point where we have got big changes going on (in energy markets),” AGL Energy managing director Michael Fraser said on Wednesday.

“We see battery storage technology going ahead in leaps and bounds.” This, in conjcution with rooftop solar and home energy mangement systems, would cause a “significant” and “fundamental” change in the way the energy market operates, Fraser said.

AGL Energy has created a new division, called New Energy, to manage its move into these technologies. As RenewEconomy has reported, AGL Energy is planning a major new push into the rooftop solar market, along with digital meters, battery storage and home management systems.

But it is Fraser’ comments about the state of battery storage technology that will most interest the market. Many downplay exactly how close battery storage technology is to becoming commercially viable in the consumer market.

Some predict it will take off like rooftop solar did 5 years ago. Others suggest that Australia’s huge network tariff costs, as revealed again today by a new report by Carbon Market Economics, means storage will be a no-brainer and a major challenge for incumbent utilities. Others are more skeptical.

Fraser, however, says it will be like any other change the company has faced over the last 180 years – from the introdution of gas lights, light bulbs, and the arrival of gas and large scale coal generation and renewables.

“History shows that (such technologies) start slow, but then take off faster than anyone expects,” he said. “We are positioning ourselves for that.”

Fraser added that AGL Energy had already been in discussions with suppliers about battery storage and digital meters technology. See RenewEconomy’s articles on the big push by retailers into the home energy market, in an attempt to regain lost ground in the rooftop solar sector.

The comments by Fraser came in response to questions from RenewEconomy on a telephone press conference in conjunction with the company’s results.

These results showed that average household consumption continues to fall substantially, largely as a result of energy efficient appliances, and the penetration of rooftop solar.

agl demand

AGL says new houses use 37 per cent less electricity than the country average. Average consumption per customer fell another 4.4 per cent in the latest period, extending a decline lasting more than 5 years.

Asked how long that could continue, an AGL executive said: “That is the $64 million question.”

Still, despite the lower consumption, AGL Energy managed to extract ore profits from its retail division, courtesy of “margin management”, which translates into higher prices. Gross margins per customer rose 7.2 per cent as profits from the retail division (which includes gas and electricity) rose 16.9 per cent to $159 million.

See also https://reneweconomy.wpengine.com/2015/australias-first-100mw-solar-plant-to-begin-generating-in-march-55326

and https://reneweconomy.wpengine.com/2015/agl-says-political-deal-wont-lift-renewable-energy-investment-72133

Comments

10 responses to “AGL Energy says battery storage “already interesting””

  1. Chris Fraser Avatar
    Chris Fraser

    Good to see AGL trying to anticipate the potential utility of storage. Compared with last year’s snapping up coal generators this is Hallelujah for AGL. I’m sure New Energy will be very solvent in future, to assist with AGL’s site remediation bills when all those coal plants close down …

    1. Matthew Wright Avatar
      Matthew Wright

      We’ll wait and see. They have billions of dollars of commitment to fossil fuel infrastructure and are employing a couple of hundred people or so people to do new Energy marketing. Could just be a humour the market humour the greenies effort. I wouldn’t put it past these sharks.

  2. George Michaelson Avatar
    George Michaelson

    AGL supply domestic gas. AGL could supply air-fuel cell technology. If they can work out a retrofit, they have a community of people they are already in a relationship with. So, is there a co-gen or CHP method to use domestic gas, fuel-cell and either hot water generation or reverse-cycle which becomes their triple-play?

    1. Roger Brown Avatar
      Roger Brown

      Try CFU , its a Aussie company. http://www.cfcl.com.au/

      1. Miles Harding Avatar
        Miles Harding

        Best not to…
        It locks one into buying gas to power the fuel cell.
        The company is coy about the consumables and their cost for good reason.

  3. ChrisEcoSouth Avatar
    ChrisEcoSouth

    I would suggest to watch for the appearance of “Power Purchase Agreements” (PPA), albeit by some other label. These will be offered on some very attractive basis to customers who wish to receive a battery system from the likes of AGL. The condition will be that you enter into a ‘PPA’ with AGL for a term most likely longer than 2 years, which in effect will lock you in to paying a pre-set fee regime to AGL for the privilege of using the battery-system. All the numbers will have been crunched so that AGL see 95% surety of fixed revenue from all these customers – for years to come!
    So you are still beholden to a contract whereby thr retailer makes all the rules, and gets (all) the profit.
    Taking a step back to look at the bigger picture, this battle (IMHO) is not about ‘cheap power’, but all about how ‘independent’ you are from the retailers. Sure you can have as much solar and battery as you want from AGL – as long as you lock yourself in to pay (and pay) to achieve their profit goals.
    I would save the capital and buy your system that you *own*. Now you can really shop around for best price.

    1. Rob Conn Avatar
      Rob Conn

      Agree with you 100% – the retailers wont give up their stranglehold on our wallets easily. Trouble is alot of customers will take the ‘easy’ way and submit to whatever they offer as long as it sounds all ‘green’ and fluffy.

      1. Blind Freddy of Cairns Avatar
        Blind Freddy of Cairns

        As the article states, this will be a rapidly developing area. The early adopters will no doubt get belted, however competition will drive the value of offerings. In addition the mass production of storage batteries by Tesla and Mitsubishi etc, will drive the tech development. There will be a great opportunity for consumer advisory services to steer buyers around the pitfalls, especially when the cost and investment will still be significant. I already have a boat set up on solar and storage and my current residence is also ready to go, with LED’s, solar hotwater etc, but I missed the good PV FIT. Once a reasonable deal for PV + storage comes along I will be running the slide rule over it.

  4. adrian hauser Avatar
    adrian hauser

    We already have battery storage with our hybrid system. Using stored battery power at night and putting excess back to the grid. Small footprint, fantastic and not so expensive. Do it yourself its easy. The trick will be to counter their increasing daily supply charges!

  5. MorinMoss Avatar
    MorinMoss

    Interesting enough that Elon Musk has now said that Tesla will start building battery packs for homes & businesses within 6 months.
    With the potential demand from Germany, California, other US states – and Australia, he won’t lack for customers, depending on the cost.

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