Even Australia’s energy minister, Ian Macfarlane said it, so it must be true: Battery storage is about to change the energy system, both in Australia and overseas.
Macfarlane thinks it might take a while, but others suggest that Australia is ground zero for battery storage. That means that the impact will be felt now, even it is only in the strategy meetings of the incumbent utilities.
Morgan Stanley has produced an in-depth analysis of how the battery storage market may grow in Australia. It predicts a market of 2.4 million homes, worth around $24 billion. It also included these interesting graphs that neatly summarise what is at stake.
First, with the proposition. Morgan Stanley commissioned a surge in March that showed surprisingly strong interest in household solar and battery systems, with around 50 per cent ‘definitely interested’ or ‘maybe interested’.
The second graph shows the extent of household solar installations in Australia, state by state. Morgan Stanley believes that battery take-up will follow solar installation patterns, firstly for the ‘retrofit’ market (i.e. solar already installed), and then new rooftops.
The next graph illustrates how if solar production is stored for use later in the day, that will reduce the supply from the utility, impacting its earnings. Effectively, it is a transfer of value from merchant utilities.
To what extent. This graph show how much, at least as it applies to AGL Energy. On the wider scale, there will be lower pool prices and potential asset write-downs in the 2020s, particularly in peaking gas investments, which will be made more or less redundant once battery storage reaches 10 per cent of the National Electricity Market. And let’s not forget, the utilities between 2009 and 2014 invested in more capacity in peaking gas as they did in renewables, mainly wind energy/
So, who are the winners. Well, take your pick. These are some of the offerings in the Australian market at the moment, with Tesla offering the cheapest storage options so far, closely followed by LG and Acquion energy.