Commercial battery boom headed for Australia, despite “outdated policy”

One Step Off The Grid

As Australia’s commercial solar market hits its straps in Australia, a new report has suggested battery storage could be next on the list for business and industry, as energy prices continue to rise, policy continues to flounder, and technology prices start to fall.

Based on a global survey of corporate executives, the report – published on Wednesday by Baker McKenzie and Clean Energy Pipeline – found that 62 per cent of businesses were planning to invest in in energy storage technology in the next 18 months.

And banks were even more prepared to back those investments – with 93 per cent of finance industry respondents saying they would consider those projects to be viable financial opportunities.

But the report, titled Smart Power Revolution: Opportunities and Challenges, also warns that there is still much work to done to clear the hurdles to progress currently presented by “unfit and outdated” regulatory regimes.

According to the survey, 77 per cent of respondents said legal and regulatory frameworks were inadequate to address the coming smart power changes.

A further 91 per cent believed governments and regulators were not well-prepared for advancements in smart power technology.

Warrick Stapleton, who works for the Australian arm of global battery giant LG Chem, couldn’t agree more, having watched demand for batteries in the commercial and industrial sectors around Asia soar.

“The demand for C&I… behind the meter storage is actually 5GWh this year, alone, in Korea,” Stapleton told the Smart Energy Conference in Sydney on Wednesday.

“Globally, we’ve deployed 3.8GWh as of December 2017, and these are in C&I through to grid scale installations,” he said.

“Energy storage, in particular lithium-ion batteries, is proven reliable and ready to provide value to many stakeholders.

“We need to establish the linkages and price signals in order to reimburse the battery owners for the value in an increasingly distributed grid.”

In Australia, of course, the wheels are in motion on this – albeit moving very slowly, and with multiple drivers behind the wheel, including the AEMC, AEMO, COAG energy ministers and numerous other stakeholders.

But it’s vital for progress to be made, says Baker McKenzie’s Sydney-based energy and climate partner Paul Curnow, if we want to see a transition to a smarter, cleaner grid.

“In energy only markets there is no real economic incentive for storage as projects are typically treated as generators, and every generator is paid the same spot price for the relevant pricing period.

“In Australia which is an energy-only market, we have one rule change commencing in 2021 which will settle the spot price for every five minutes instead of the current 30 minute average.

“This means that storage generators who can dispatch quickly when the spot price is high will receive this higher price rather than the typically much lower half hour average.”

This article was originally published on RenewEconomy’s sister site, One Step Off The Grid, which focuses on customer experience with distributed generation. To sign up to One Step’s free weekly newsletter, please click here.