Household solar + storage to meet most of peak demand, and keep grids stable | RenewEconomy

Household solar + storage to meet most of peak demand, and keep grids stable

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Australian households will not just be supplying much of their own electricity consumption in the future. The combined capacity of their storage and solar will play a critical role in managing peak demand and grid security in an energy system that will look little like today’s.

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Within a few decades, Australian households and other consumers will not just be generating up to half of the country’s electricity needs, but they could be playing a key role in meeting peak demand and keeping the grid stable.

Such a scenario seems improbable in a public debate dominated by election-timed scare campaigns about the high cost of renewable energy and the perils of shutting down coal-fired generation, as occurred in South Australia last week.

But according to Bloomberg New Energy Finance senior analyst Kobad Bhavnagri, Australia’s energy system is set for radical change at a pace that may take the breath away – at least from the current crop of policy makers and regulators.

The country’s coal generators are ageing and dirty, and are rapidly becoming obsolete, Bhavnagri says. As these plants retire, new capacity will be provided by wind and solar, which will be far cheaper than fossil fuels, and without the commodity, reputational and market risk.

By 2040, he suggests, renewable energy will account for 70 per cent of all electricity demand. This reflects a global trend driven by technology and economics, with policy just a “stepping stone” along the way.

These two graphs illustrate that, as Australia makes new energy investments, wind and solar will be the cheapest options.

bnef wind vs coal

Bhavnagri says there is simply too much risk – to reputation, markets, and the environment – for any new coal-fired power stations to be built. And wind and solar will also be cheaper than gas, even with low oil prices.

bnef solar vs coal

Bhavnagri suggests that forecast solar prices will also be wound back significantly in an updated technology cost report to be released at the end of this month.

But the biggest change will occur “behind the meter”, in homes and businesses. Up to 50 per cent of all electricity will be generated behind the meter, simply because “end user” technologies will provide a cost of supply below that of the grid.

“This will provide more choice for consumers …. and will require a new array for services. Who provides these will be an evolving contest.”

And one graph Bhavnagri provided stood out. It shows that by 2040, the combined power of solar and storage could be providing the bulk of the “peak demand” needs, particularly in winter.

behind meter peak capcity

The purple bar represents flexible capacity – essentially end-user solar and storage that lies behind the meter – in homes and businesses of customers. This, says Bhavnagri,  becomes the marginal technology of supply.

“All of that capacity that exists behind the meter has to be coordinated through some sort of mechanism or needs to be incentivised in some sort of capacity to be valuable to system.”

The alternative, he said, was to install a huge amount of redundancy in the system – such as gas peakers and centralised storage – which could be far more costly.

These are some of the issues that the networks are wrestling with, as they launch trials that will look at how using the shared capacity of homes and business can deflect and avoid network costs, and reduce the cost of peak demand, now mostly provided by expensive gas generators.

But Bhavnagri says that the massive uptake in battery storage – he predicts 33GW by 2040, along with 37GW of rooftop solar – will mean that net peak demand will nearly halve by 2040, contrary to most forecasts that suggests it will continue to grow.

bnef peak demand

“The way the grid operates will have to fundamentally change,” Bhavnagri says. “We are looking at a completely different energy market to one we are used to operating today.”

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  1. Nick Thiwerspoon 4 years ago

    You should prolly explain to your readers that CCGT means (at least, I’m assuming it does) “combined cycle gas turbine’

    • solarguy 4 years ago

      I’d say you would be right Nick.

  2. Cooma Doug 4 years ago

    When you dig into the idea of behind the meter technology, looking at all the appliances and energy needs in the home, you start to think wow, what on earth have we been doing?
    With this experience in mind I can see that this article is a tad conservative and enabling the tendancy to waste energy and stick with old ideas.
    Having said that I am still so pleased with this article. I have been waiting for this attitude to come through for 9 years.
    When consumers are educated and aware of energy use, limits and balance, they will recognise waste and initiate efficiency options.
    I also believe the costs are not considering all the issues especially when comparing solar and batteries to Gas peakers and also large base load.

    • Mike Dill 4 years ago

      I think the BNEF summer/winter chart for 2040 misses the build that will happen with wind. There will be no more coal plants built, and solar and wind are cheaper than peaking CCGT and other gas generation. I expect that WA and SA will be building a lot of solar and wind to save $$.

      • Cooma Doug 4 years ago

        Yes already well on track dispite the politics

  3. Terry J Wall 4 years ago

    This is way beyond boring.

    Having spent $16k on an average hybrid solar battery system, knowingly to receive 8 cents (NSW) for power that I feed into the grid. usually when my batteries are full and I am not cooking a chook, I continue to be charged 40 cents a KWh (peak), that is correct, May I repeat; I generate power to gain 8 cents per KWh and I frequently get charged between 40 cents (AGL) and 20 cents shoulder rate. I now put my case.

    Our elected leaders (read fossil lobbyists) continue to propagate the status quo, where they pay OUR money as subsidies, in order that the fossil energy corporations can continue to fleece us. Did you get that right? Yes our politicians pay the big fossil fuel multi-nationals money to ensure that we continue to pour carbon into our atmosphere just to make sure that they have enough profit to afford bonuses and are able to afford dumb shit energy programs like “lets burn 8 barrels of oil to get 9 barrels of tar. (F..k the Canadians)

    I knew this at the beginning. I still spent the dosh purely out of the thought that someone has to do something about this crazy sick greed infected world, and that one day, my gkids may say thanks Pops. Yep we are loving the AGLs of the world and the M.Turnbulls (Obarmarish) turncoats. My mission now is to out survive you bastards at the top, find out where you are buried, and piss on your remains.

    PS I have just ordered another upgrade of my batteries to 5.8 kwh. You know where I am headed eh!

    • solarguy 4 years ago

      Very amusing response Terry, I’m still laughing because we do indeed live in a twisted f..ked up world.
      You have made my day!

    • Pfitzy 4 years ago

      You’re right about the government, and while the regulator is in bed with them, we’re snowball’s of getting a progressive grid.

      In terms of maximising your batteries while you’re on the grid, and mitigating cost up until you’re ready to depart, you could look into Reposit Power. The smarts in the system allow you to charge the batteries off-peak, and sell it back for market spot rate or higher, depending on your plan via the retailer.

      I get the same FiT as you, and am considering switching to TOU in order to make the most of off-peak and limit my peak exposure.

    • JohnM 4 years ago

      We’re all with you Terry.
      We can only do our little idealogical and moral thing, short of self-immolation on the steps of parliament. -Might not even make the press…
      Setting an example has clearly worked well for solar.
      There’s an awful lot of big blue billboards out there now!
      6 KW on the roof here, 5.5 KW on my rental, -not negatively geared,
      and 5 KW on my son’s house.
      It’s a start.
      I drive a Tesla (owned by the bank), and that sets a good example too.
      Lots of interest (and interest) and quite a few converts there.
      Solar is coming down exponentially, and so will large and small scale storage.
      Market forces will very soon prevail over brown paper bags.
      See you for the pissing ceremony.
      Bring a carton!

      • Alastair Leith 4 years ago

        the market isn’t going to do it on it’s own in time. solar installs fell last year in every state and employment for system designers and installers also fell last year. Growth has flattened to linear and it’s only the increasing size of average system that’s making it look like growth at all. Sure storage will add some incentive in a few years when it’s more affordable but the governments need to be co-erced into showing loyalty to us and what’s left of a safe climate not the moral-cowards in fossil fuels.

    • Dispassionate 4 years ago

      So where does all this money you are being “ripped off” go? To fossil fuel subsidies? These are paid by the federal government? How much of this 40c do you think is being ripped off you?

    • Alastair Leith 4 years ago

      Thanks Terry. You have cash, vision and moral standing.

      Together as a political force we can bring the revolution that’s needed to stop the revolving door between FFs and Lib/Lab/Nats. Individual action is great and inspiring but joining a climate group to ‘move the rock’ is whats fundamentally required to break this open bribery and corruption.

  4. Geoff James 4 years ago

    Another interesting feature of the third graph is the vast excess capacity by 2040, even in Winter, and in Summer around 30 GW more than what would be needed for contingency reserve. This will be available for useful things such as electric transport (which will be dominant by then if we believe some recent articles) with minimal new infrastructure because it is generated behind the meter. It can also contribute to an electricity export market that is also likely to be mature by then.

    • solarguy 4 years ago

      When you consider that we can get weather events, where solar is only 5% of std output, that can last 2 weeks (severe rain depression) and wind output is low over a very wide area. Then the excess capacity your talking about might not be enough.
      I suggest using methane, that’s produced from sewerage, which is stored for use at such times. Apart from that, molten salt storage, which can be stored for months could also be used.

      • Alastair Leith 4 years ago

        stored for months? I think one month is the record isn’t it? always improving I’m sure, as that FRENELL white paper released recently suggests.

        SEN in WA said 85% RE is affordable for less than BAU but then after that you have these prolonged periods of weather and becalm coinciding over WA that are very hard to cover for without either gas (potentially biogas or electricity2gas), large overcapacity (which has the benefit of very cheap (potentially free) industrial power when the grid is over-producing that could be used for ore processing or CO2 sequestration in mineralisation processes, or some other kind of storage like PHES, but even then that’s not very economic for two weeks winter/autumn time demand according to their analysis.

        • solarguy 4 years ago

          Well no, it will loose 1 degree C per day with no further heat input. That being a fact and if starting temp is 565 C, that’s only 60 C loss which is still useful.
          CST doesn’t have to be the only method of attaining that sort of temperature either, electric arc elements can be powered by wind and solar, making use of excess power.

    • David Hall 4 years ago

      I suspect the graph shows installed capacity rather than actual generation e.g. if the wind isn’t blowing or the sun shining in certain areas then that capacity is not available. In reality you need a lot more installed capacity plus batteries to meet a 24/7 demand requirement.

      • Geoff James 4 years ago

        Yes thanks David, I was referring to installed power capacity, and the energy output due to that “flexible capacity” component would be a calculation based on solar resource, shading, failure rate, etc. The point is that it’s infrastructure that can be efficiently used – not curtailed, spilled, wasted. It doesn’t have to meet 24/7 demand on its own, because it’s a component of a diverse energy mix.

  5. Ian 4 years ago

    A battery. A battery. My solar future for a battery. The whole network scenario depends on household batteries. If home storage batteries become cheaper than the grid distribution of electricity then Bhavnagri’s future holds. If not then what? What is renewables’ plan B?

    • David Hall 4 years ago

      Could Plan B be more Wind and make use of grid distribution?
      In reality batteries will get cheaper and grid scale battery storage will be cheaper than household due to economies of scale. I see that the UK and South Africa are installing grid scale batteries.

      • Wietze Post 4 years ago

        David, Yes, grid scale battery storage, battery for battery, will be cheaper than household due to economies of scale. However, a grid scale battery still has to get the power to the household, while the battery in the household is already right there. The additional cost of the grid, as well as its management and other interests, will raise the price of grid electricity above that of what it costs to have your own in-house battery (even though the grid scale battery may be nominally cheaper). The irritation of having to submit to how the grid power is managed and priced will be a further nail in the coffin of grid power.

    • Ian 4 years ago

      There are a lot of possibilities. Solar already has a bright future- batteries or not. You have to get up to at least 30% intermittent sources before battery storage really starts to get necessary. Solar has a long way to go just to fill up that market space worldwide. In the meantime, every penny in cost reduction increases the market share for solar (and batteries.) Solar, batteries and LEDs are already cheaper than the kerosene lighting that millions of off-grid people in developing countries are using. It’s cheaper than the gas generators a lot of people use who don’t have a reliable grid.

  6. David Hall 4 years ago

    A good editorial based on Kobad Bhavnagri sound analysis who has got it in one.
    Technology and the market always decides what will happen. Governments can facilitate the change, delay it, or just sit on their hands. No prizes for guessing where we are at However, I am confident that Kobad’s analysis of 70% renewable by 2040 will eventuate even for no other reason than our old coal fired power stations will not survive that long and the mention of new ones to replace them would be political suicide and not economical.

    To get the additional c.30GW of capacity by 2040 as proposed by Kobad’s analysis will require some 1,500MWe of capacity to be installed every year from now to 2040, no mean feat. To achieve this, I expect to see a lot more wind power generation being installed compared to Kobad’s negligible change in wind capacity, (unless it is in the flexible capacity). We will also need a well planned dynamic smart grid system – who is going to develop this? Could it be a national asset??

    • Alastair Leith 4 years ago

      Ray Kurzweil points out that PV modules are on track to be deployed at a capacity equivalent to the entire global energy demand by ~2036, and at virtually free module cost. Quite possibly it will be an option to spray/film PV cells onto most building cladding materials by then too at a trivial cost for point of sale competitiveness.

  7. Ian 4 years ago

    The more of these projections I read, the more I am convinced that they are pointless. Nobody predicted the changes that have occurred over the last 10 years in energy markets with anything close to accuracy, even less so in the last 5 years. They all missed the impact of LEDs and conservation, of wind, of solar, of cheap natural gas… One thing that is certain is that however much the technology, economics, and politics of energy have changed in the last 5 years, it’s only going to change even more in the coming years. I think it’s a valuable exercise to look at trends and try to game out what the possibilities are, but attaching such specific numbers to it is pointless. There are just too many moving pieces.

  8. Wietze Post 4 years ago

    Good article Giles. My thinking is that homes and businesses are going to largely manage their own energy needs, just about completely independently. That will happen before 2030.
    When one starts having one’s own energy production and storage, then one automatically starts looking at ways to reduce power use. We’ll have apps appearing on the market which regulate when particular appliances should run, given current battery storage levels and expected power production within the next 5 minutes, or next hours.
    Insulation will become very important, for both heat and cold regulation.
    Energy needs will be regulated between neighbours and will be largely independent of the grid.
    The time will come when it will be too expensive to maintain a HV power line, because the power demanded of it is just too low. That will be the final tipping point when centralized production will no longer be available and homes and businesses will be completely on their own, and will depend solely on their own, very local, gridlet.
    At that moment too, anything which is built now and depends on financial viability after 2030, will become a stranded asset.

  9. Alastair Leith 4 years ago

    So new coal no longer cheaper than new CCGT? When did that happen? This must be US data, where unconventional gas has killed off coal mostly, right(?)

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