Can neighbourhood batteries really deliver benefits to all consumers?

If there is one form of energy storage that resonates with the collective it is neighbourhood batteries.

Neighbourhood, or community batteries, encapsulate ideals of equity and collective care. Abundantly produced clean energy from the sun is stored in medium-sized batteries that sit within a neighbourhood. They are an exemplar of localised production and use, of sustainability and the sharing of excess energy. 

Rather than the solar “haves” and “have nots,” no one is left behind. Neighbourhood batteries, in theory, provide an opportunity to bring out the best in a community. This is the theory, at least. In practice we are still figuring out how to operate these batteries to achieve these goals. 

Researchers at the Battery Storage and Grid Integration Program at the Australian National University (ANU), world leaders in the field, have been tackling this problem and have produced two new reports that shine a light on what conditions are necessary in order to unlock the potential of neighbourhood batteries. 

The first report looks at how trial network tariffs impact the potential benefits of neighbourhood batteries. The second report examines how this form of energy storage can make better use of consumer energy resources such as rooftop solar and electric vehicle batteries. 

How trial network tariffs impact the potential benefits of neighbourhood batteries

The first report examined five network tariffs trialed by Australian Distributed Network Service Providers – Ausgrid, Jemena, Citipower and Powercor, Essential Energy and Evoenergy.

“The objective of the research was to analyse how effective each tariff was at incentivising the flexible behaviour of neighbourhood batteries, in particular to reduce peak demand on the network,” said project lead, Associate Professor Marnie Shaw from the ANU Battery Storage and Grid Integration Program.

While the methodologies and regulatory environments differ, the move towards more sophisticated tariff structures, such as time-of-use (TOU) energy charges and time-varying demand charge tariffs, is a common theme globally.

The tariffs trialed were as follows:

– One-way flat rate tariff.

– Two-way time-of-use tariff (two-way tariffs incentivise for charging during solar soaking, or daylight hours, and for discharging during the evening peak. A time-of-use tariff charges different prices for electricity usage depending on the time of day).

– Two-way time-of-use tariff with seasonal demand charge (a seasonal demand charge is set by the highest power demand in winter and summer).

– Two-way time-of-use tariff with two-way demand charge (a demand charge is charging more for electricity at peak periods, typically between 5 – 8pm).

– Two-way (charging & discharging) flat rate with one-way demand charge.

1. The study used simulations to analyse these trial tariffs, assessing impact on peak demand reduction and financial outcomes for stakeholders. There were three major findings from the analysis:

– Two-way TOU tariffs resulted in a significant reduction in network peak demand and payment to the battery owner.

– A two-way demand charge further reduced network peak demand and increased the payment to the battery owner.

1. – All tariffs resulted in a similar level of local solar utilisation, that is the proportion of total household electricity requirement met by locally generated rooftop solar was not influenced by different tariffs.

“We know that most customers, including me, don’t want complex tariffs,” said Associate Professor Shaw. “What we are recommending is that by shifting the complexity of tariff management onto battery energy management systems, households may be able to benefit from optimised network usage and cost savings without the burden of understanding and responding to complicated pricing structures.

“Further research is necessary to verify results and determine economic viability. Based on further results the goal is to generate a recommendation for a single NEM-wide optimised tariff,” said Associate Professor Shaw.

How neighbourhood batteries can unlock network capacity for Consumer Energy Resources

The second report provides guidance on how neighbourhood batteries can allow consumer energy resources to increase hosting capacity within the network.

The report clearly shows that factors such as the size of the neighbourhood battery, operation modes, the location within the electrical network, the number of feeder households with rooftop solar and the size of those systems and network tariffs all play important roles. Results also revealed that operating the battery only according to price signals can decrease hosting capacity, however two-way tariffs can help with this. 

Neighbourhood Batteries may be particularly helpful in unlocking network capacity in regions with a high density of consumer energy resources or significant reverse power flows and voltage issues.

With the anticipated increase in electric vehicles charging demand potentially pushing network thermal and voltage limits, neighbourhood batteries could offer a strategic solution.

Sarah Wilson is communications manager at the Battery Storage and Grid Integration Program, Australian National University

This research was made possible thanks to funding from Energy Consumers Australia.

Reports

Report 1: How trial network tariffs impact the potential benefits of Neighbourhood Batteries

Network tariff report methodology paper

Report 2: How neighbourhood batteries can unlock network capacity for Consumer Energy Resources