Market reform, not subsidies, needed to unlock “massive potential” of battery storage

The Clean Energy Council has called on governments and industry to work together to accelerate the uptake of battery storage in Australia, which it describes as one of the biggest innovations in the energy sector since the invention of electricity.

In a report titled Accelerating the Uptake of Battery Storage, released on Thursday, the CEC lists a number of initiatives it argues are necessary to unlock the full benefits of energy storage for Australian consumers.

It says that subsidies are not needed to encourage the adoption of battery storage by households, although government “support” should be provided for demonstration projects that can identify barriers and grow confidence and familiarity with battery storage solutions.

The most critical support measure, it says, is to unlock the full value of battery storage by setting tariffs that allow consumers to realise the economic benefits of the technology, and reduce demand for electricity at peak times, thus reducing the costs of the entire electricity network.

The current electricity tariff structures do not do this – more specifically, they don’t allow the benefits to “flow to the private householders who would be investing in battery storage.”

Most critical, it adds, is that network distribution tariffs are designed in a way that allows customers to realise the full value of installing storage and that future tariff changes are “not at the detriment” of these customer benefits.

“Battery storage has massive potential in Australia to help Australian consumers better manage their own electricity use, alleviate the pressures on the electricity network, and maximise the advantage of the more than 1.5 million solar systems already installed on homes,” said CEC chief Kane Thornton in a media statement.

“But there is a global race on to attract investors and technology innovation in the sector, and Australia cannot afford to be complacent. There is a lot to do and it is important that industry and governments work together to unlock this exciting innovation in the energy sector.”

The recommended initiatives range from making changes to electricity pricing structures in some states; to the introduction of smart regulation to overcome barriers to uptake; creating a framework for industry safety and integrity; and better information for consumers and support for demonstration projects.

Governments could also play an important role in helping to find innovative business and financing models, and build capability and capacity within the industry, the report said, while also ensuring supportive regulations relating to building codes, planning regimes, fire and environmental safety or electrical and network regulation.

The CEC also recommends undertaking Australia’s most comprehensive technical report of storage safety, to be completed in collaboration with CSIRO, and creating a Battery Storage Endorsement for solar installers, as well as a consumer guide for households and small business.