Bids open for hundreds of grid-connected community batteries to soak up solar

A new round of grant funding has kicked off in the federal government’s $200 million Community Batteries scheme, this time offering a total of $120 million to help fund more than 300 grid-connected battery energy storage projects of up to 5MW each.

The funding round, led by the Australian Renewable Energy Agency, aims to underwrite the deployment of potentially hundreds of network connected batteries to maximise the local use of cheap solar, reduce pressure on solar-heavy grids and pave the way for more rooftop PV.

All of this, in turn, is hoped to help push down the overall cost of energy for all Australian consumers while also further driving down electricity sector emissions.

ARENA, which was allocated $171 million of the Albanese government’s Community Batteries kitty to deliver at least 342 of the shared solar batteries, has this week put out a call for expressions of interest.

ARENA says a first funding round will start with $120 million for grants of between $2 million and $20 million to projects proposing a minimum of five batteries.

A second funding round will allocate the remaining $51 million to projects with longer development times, ARENA says.

To be eligible for the funding, each proposed battery project must be connected to the distribution network, in either behind-the-meter or front-the-meter configuration, and must be between 50kW and 5MW (5,000kW).

The $120 million on offer in this round has been divided down the middle, with $60 million dedicated to projects proposed by network companies (DNSPs) and the other $60 million set aside for non-network applicants.

The division of the funding follows the controversial move by the Australian Energy Regulator in February to give monopoly electricity network companies access to the Community Batteries scheme via a waiver to ring fencing rules.

Critics of the class waiver have argued that networks, with their monopoly positions, would have a major advantage over non-network companies and could come to dominate the design and and ownership of community batteries funded through the scheme.

As Nexa Advisory’s Stephanie Bashir wrote here in January, ARENA’s grant application process would need to be “transparent and open and not biased towards incumbents” in order for the program to deliver on its stated outcomes – particularly on pushing down power costs.

The division of the funding appears to address such concerns.

As James Allston explains here on RenewEconomy sister site One Step Off The Grid, community or “neighbourhood batteries” fall into a dead zone between utility-scale batteries and behind-the-meter batteries – an area described by federal Labor as “the missing middle.”

But as Allston also explains, how exactly they function on the grid is complicated – particularly in terms of whether they sit behind or in front of the meter, and in terms of how they are operated commercially.

The main purpose of the shared batteries is to install them on parts of the grid with high rooftop solar uptake to soak up excess generation and ease grid constraints while also helping to reduce electricity costs and emissions.

The batteries are also expected to help level the playing field on rooftop solar access, spreading the benefits of distributed PV across communities regardless of whether households have rooftop panels or not.

Whoever develops them, ARENA CEO Darren Miller says community batteries are “the next step” in optimising distributed energy resources in Australia’s rapidly evolving electricity grid.

“Not everyone is able to install rooftop solar, but by storing electricity close to the point of consumer demand, we can reduce network costs and alleviate constraints in areas with high solar penetration. This will ultimately reduce electricity costs for all consumers,” Miller says.

The EOI period closes on June 30, with the funding opened up to a full application process in September, closing at the end of March next year.

ARENA will host two information webinars on the Community Batteries Funding Program on April 12 and 18.