AGL Energy says it is witnessing more signs of what it has hailed as the “dawn of the battery age” with a significant increase in interest from Australian households in battery storage.
AGL first predicted the “dawn of the battery” age as it announced a series of investments and contracts in grid scale “big batteries” in both NSW and Queensland, both to help replace the Liddell coal generator scheduled for closure in 2023 and to support and balance its increased generation of wind and solar energy.
At an online conferenc hosted by Macquarie Group on Tuesday, AGL chief executive Brett Redman says increased demand has now been detected in the residential market, echoing anecdotal evidence from solar installers who have reported an increase in enquires as homeowners think of energy resilience in light of the summer bushfires and the Covid-19 pandemic.
“One of the other interesting data points we have seen recently is a material increase in residential battery quotes and sales (albeit off a small base),” Redman says in notes accompanying his presentation.
“This has been particularly driven by the South Australian subsidy change, and uptick in government grants. I have spoken previously about the “dawn of the battery age” and I believe it,” Redman said.
“Despite COVID-19 the energy transition will continue and we now forecast residential battery installations to reach 150,000 by 2025. So, when it comes to post-COVID recovery for the energy industry, residential batteries is a great opportunity that we are leaning into.”
That figure of 150,000 apparently reflects AGL’s predictions for total residential battery storage installations, which seems to be undercooking the market a bit, given that more than 20,000 batteries have been installed in each of the last three years, and this is expected to continue over the coming years, if not accelerate significantly.
Elsewhere in the presentation, Redman noted the significant falls in prices for gas, forward electricity prices and large scale generation certificates (LGCs), which are now trading at around $20/MWh. (See graphs above).
“Electricity forward curves have decreased in FY21 as supply has increased, through new generation, along with falling short-term gas and coal costs,” Redman said. “This is not a new trend, we have seen falling wholesale electricity prices for some time, however FY21 forward prices have dropped significantly further than previously forecast.”
Redman said that current spot electricity prices – which are trading at their lowest for many years – are partially being influenced by the deferral of planned outages to ensure there is no interruption during the Covid-19 pandemic. “This will need to be caught up by either increased planned or unplanned outages in the future, both of which will put upward pressure on prices.”
But he said the short to medium-term price is likely to remain depressed due to current macro economic conditions, but this would not be long term as black coal, gas and oil prices revert to longer term levels.
AGL is the largest generator of coal in Australia, which means it is also the nation’s biggest polluter. Redman said coal production from its generators was only down 1 per cent in 2020 so far, compared to the same period last year.
“As Australia’s largest carbon emitter but also the country’s largest private investor in renewable energy, we have a clear path forward to lead the energy transition for Australia,” Redman said.
“Australia’s future is to again be a domestic energy superpower, this time driven by plentiful renewable energy, and AGL will be at the forefront of this change.”
RenewEconomy and its sister sites One Step Off The Grid and The Driven will continue to publish throughout the Covid-19 crisis, posting good news about technology and project development, and holding government, regulators and business to account. But as the conference market evaporates, and some advertisers pull in their budgets, readers can help by making a voluntary donation here to help ensure we can continue to offer the service free of charge and to as wide an audience as possible. Thankyou for your support.
The record season for renewable energy has extended from its traditional spring season into summer,…
Calls for federal government to revamp the national rooftop solar rebate, instead of killing it…
New AEMO report details why all Australian states and territories should have an emergency solar…
Australia's living standards are forecast to take a $7 trillion hit between now and 2050,…
Any day now, we should be provided with an estimate on what Peter Dutton's plan…
Two sectors have been doing the bulk of the effort when it comes to emissions…