Home batteries have overtaken capacity of grid-scale batteries after rebate bonanza, and reshaped the market

The power capacity of Australia’s home batteries on the countries main grid has reached an extraordinary new milestone – overtaking the capacity of the grid scale batteries, at least in power if not in storage.

According to market analysts Modo Energy, the surge in home battery installations as a result of the federal government’s enormously popular Cheaper Home Batteries program has jumped from an estimated 1.4 gigawatts (GW) to 7.8 GW as at the end of June.

That, Modo Energy says, now exceeds the 7.7 GW of grid scale capacity. And, as made clear by numerous reports from the grid operator and regulators, that is having a major impact on the shape of the grid, and in reducing wholesale electricity prices.

“As more home batteries charge through the solar peak and discharge into the evening, they are reshaping operational demand,” Modo Energy writes. “This makes them an increasingly important contributor to tightening price spreads, alongside utility-scale batteries.”

• Modo Energy says that although installation rates appear to have slowed since the change in the design of the rebate that came into force in May, it is still running a four times the rate before the rebate came into force.

It predicts that home battery capacity will double again by the end of the decade, to a total of 15.8 GW and 32.9 gigawatt hours, and it says that will have an interesting impact on the operations of grid scale batteries, and the price spread on the main grid.

As the Australian Energy Market Operator noted in its Quarterly Energy Dynamics report, the price curve in both the National Electricity Market (the main grid), and W.A.s Wholesale Electricity Market have been flattened by the additional of both home and grid scale batteries in the last year.

Home batteries reshape residential demand profiles rather than bidding into the market,” the Modo Energy analysts write. “This is still enough to contribute to spread compression, alongside the cannibalisation from grid-scale battery deployment and other demand shifting.”

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