Baptists and Bootleggers: Is energy storage riding the wave of bad solar policy?

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Energy storage is dubbed the ‘holy grail’ of renewables development, but is the battery boom forsaking sensible, and fair, solar policy?

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The evidence of the key importance of battery storage was everywhere to be seen at the All-Energy Australia conference in Melbourne this week.

Battery products of all shapes and sizes (and amazingly light weights!) were on display at the exhibition centre, and with them, a proliferation of the inverter technologies that are considered the final piece of the distributed generation puzzle – the smarts of solar and storage systems that will maximise self-generation and manage bi-directional energy flow without consumers having to give it a thought.

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Confiscated stills from the US prohibition era in Elizabethton, Tennessee, circa 1940s.

But while batteries and inverters dominated at the All-Energy exhibition downstairs, some at the conference upstairs were questioning the role of energy storage on the future grid and whether it was really the “holy grail” of renewable energy distribution it is made out to be.

“There are the best of reasons to install energy storage,” said Iain MacGill from the University of NSW, which is collaborating with other universities on the CSIRO Future Gird research program.

“But there are some arguing that you shouldn’t install renewables without storage. And that’s not true.”

On the “best of reasons” side, there is certainly plenty of weight: the potential to triple or quadruple the value of PV for rooftop solar homeowners; the development of dazzling new technology like the Tesla Powerwall, that has transformed energy storage into something approaching an appliance – you go to a shop, buy it and plug it in.

Energy storage for households is “available, attractive and quickly deployable,” said Tony Vassallo – another speaker at the conference session who is another member of the Future Grid research team, from the University of Sydney – and is drifting towards the the break-even point on cost for Australian households.

But when it comes to regulation, the policy is “probably 10 years behind the technology,” he adds. And this is part of what worries MacGill.

“There is a risk with renewable energy and energy storage,” he told the conference on Wednesday afternoon, and it’s a brings to mind the Bootleggers and Baptists theory.

As MacGill explained, the Bootleggers and Baptists theory – formed by US regulatory economist Bruce Yandle and based on the era of Prohibition in America – relates to economic market trends that are driven by the best of intentions and the worst of intentions. Or as Yandle himself put it, it is a marriage of high-flown values and vested interests.

More specifically, it is when the regulations behind those economic trends are supported by two distinct groups – those that want the ostensible purpose of the regulation (in this case, energy independence and cheaper bills for consumers) and groups that profit from undermining that purpose.

The concern here is that, rather than adapting energy policies and eletricity market regulations to make rooftop solar a fair proposition for those who install it and export excess energy to the grid, the uptake of batteries is encouraged, instead, making solar self consumption the solution.

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Batteries, batteries, everywhere

Downstairs at the All-Energy exhibition, one big industry player in inverter technology in both the solar panel and energy storage space illustrated how this works.

In an interview with RenewEconomy on Thursday, he said that while any wind-back to solar feed-in tariffs in any market around the world effectively delivered a 6-month freeze in investment for his panel inverter business, it was a boon for his company’s storage management systems. This makes Australia, of course, with its 1.4 million solar rooftops, disappearing FiTs and high electricity prices, a key target market for the latter.

What MacGill sees emerging is “a potential disconnect between what’s viable for consumers and what’s best for industry and market as a whole.

Which brings us back to Vassallo’s point, that energy market policy is probably about 10 years behind the technology.

Thankfully, this is a gap that Vassallo, MacGill and the CSIRO are working on bridging. But there’s a lot of work to do.

What would astute and effective policy look like for Australia’s future grid?

At this stage, says MacGill, “the answer is nothing like it looks right now.”

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12 Comments
  1. Mark Potochnik 4 years ago

    In Wisconsin even with batteries the Heir Scott Walker and his Big Commie Government sends his WE Energy Gestapo into your home and meter your solar panels whether or not you are connected to the grid. Guaranteed income for for the PRIVATE utility company. THEY HAVE THE RIGHT TO ENTER YOUR HOME. You have to ask their permission. Welcome to America!

    • Phil 4 years ago

      They have started that here in Queensland Australia. My neighbour now pays a daily fee on his on grid solar panels to the network provider. He 100% owns the panels. It’s not much , i believe only around 10 cents a day , but it’s a precedent and will certainly rise and not fall in cost over time .I don’t know if they could tax off grid users if the grid does not go past as things like septics and water tanks are off grid ( assuming no sewer or water grid past the home) and these are not taxed.Death and taxes the only certain things in life

    • Sim 4 years ago

      And I had to put up with my American friends for years telling me how free they were.

  2. Chris Fraser 4 years ago

    The future grid is either rusty and underused, or ‘managed’ to cope with bi-directional energy flows in a free market. Stupid corrupt governments will let the grid fall into vested (read incumbent) interests, and give them our money via fixed charges to protect their investment returns. Or smart publicly-minded governments will legislate to ensure grid viability through widespread ease of access. Shouldn’t have to be a tough choice.

  3. Ian 4 years ago

    The academics, networks and utilities still don’t get it. People and families are important, utilities and networks are subservient. The grid is a tool in the hands of its customers. The chef is in charge not the knife that he holds. If we don’t need the grid then we won’t bother with it. We stop buying tennis rackets because we no longer play tennis, not because they are expensive or strung wrong. Prattle on as they may, what they need to realise is that people want to generate, store , buy,sell,share and generally conduct commerce with electricity with others or just do their own individual thing. No more the hive busying its self around the queen. There is however, one overarching concern, which started this whole renewables movement and that is the environment in general and carbon dioxide/ global warming specifically. The question should not be how do we ensure the viability of the grid but how do we stop burning carbon. If the grid is a useful tool in this quest then reform it , if not ,move on.

    • A Wall 4 years ago

      That’s all well and good, but the grid is a sunk cost (in terms of CO2 emissions and capital). From an environmental perspective, society would be much better-off using the grid with a small amount of storage and heavy renewable penetration than people defecting from the grid with some sort of “I’m all right, Jack” attitude.

      • Sim 4 years ago

        People can go off-grid if they want and only connect if the grid actually pays something for the electricity PV which those off-grid can supply. And that has to be more that the high fixed charges that are being charged. Utilities will have to tighten the belt as happens in every business at some time or another.

        • A Wall 4 years ago

          Well yes — they “can” go off grid. My point is that this is a sub-optimal arrangement and that if you care about things other than dollars it is best avoided. If you want to make arguments for going off-grid purely on the economics, fine — but please don’t make environmental arguments for going off-grid.

          • Sim 3 years ago

            I have not actually made the argument from the environmental position. It all depends on how far you property is from the grid. More than a couple of hundred metres it becomes reasonable in cost. Over 10 years ago it would have been a lot further. Which makes it viable for many more properties to go off grid a lot closer to towns. I should have said that this is my case.

          • A Wall 3 years ago

            Apologies, I should have been clearer. That “please don’t make environmental arguments for going off-grid” comment wasn’t directed at you. There are a lot of people who think that going off-grid is environmentally good in and of itself.
            Cheers, A

          • Sim 3 years ago

            No problem. I think that the haste in chasing solar or any renewables from extreme environmental positions cause many problems which could be avoided. ie Excess feed charges.
            To small a solar units, which now people are wanting to increase but they do not because they are living off the rest of the residential housing market where people are being charged higher than they should be.

            In Australia we had a classical case of irrational exuberance in the full scale implimentation of insulation which was basically government money paying for nearly all of a houses insulation cost. Untrained people were thrown into the bubble with compromise to the houses electrical wiring. This caused deaths and people had to be compensated by the Government. Here in Australia people are so uninformed as to not realise that this means that our taxes are paying for it.
            Still residential solar has greatly reduced the need for more and more dirty fuel power production.
            Change is good. It will help to make the grid more efficient in the long term. There will be some pain and belt tightening. Long overdue.

          • Sim 3 years ago

            No problem. I think that the haste in chasing solar or any renewables from extreme environmental positions cause many problems which could be avoided. ie Excess feed charges.
            To small a solar units, which now people are wanting to increase but they do not because they are living off the rest of the residential housing market where people are being charged higher than they should be.

            In Australia we had a classical case of irrational exuberance in the full scale implimentation of insulation which was basically government money paying for nearly all of a houses insulation cost. Untrained people were thrown into the bubble with compromise to the houses electrical wiring. This caused deaths and people had to be compensated by the Government. Here in Australia people are so uninformed as to not realise that this means that our taxes are paying for it.
            Still residential solar has greatly reduced the need for more and more dirty fuel power production.
            Change is good. It will help to make the grid more efficient in the long term. There will be some pain and belt tightening. Long overdue.

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