Melbourne community group looking for home after winning funds for inner city battery

Somewhere in the Melbourne suburb of Richmond will be the new home of a 120kW/360kWh community battery, after the federal government awarded a local group $500,000 under its Community Batteries for Household Solar program.

The Yarra Energy Foundation won the grant in the latest Community Batteries funding round which closed in April, administered by Business Grants Hub. Of the 50 projects that won grants, 42 will be run by network operators.

The location, in densely-built Richmond, is yet to be determined, says Yarra Energy Foundation COO Timothy Shue.

“We’ve done some early mapping of the low voltage network where we think the battery could go but the actual location selection is subject to, probably, a lengthy and involved process with the council and the local community,” he told RenewEconomy.

“We are working very closely and collaboratively with the council because there is a high chance we would need to look at council land for the battery.”

The latest federal funding round for community batteries offered a total of $120 million to fund 300 grid-connected battery energy storage projects of 50kW-5MW each, in a bid to soak up cheap solar generation, reduce pressure on grids and create more opportunities for more rooftop PV.

“People are seriously excited about community batteries,” said Yarra Energy Foundation CEO Dean Kline.

“We shouldn’t underestimate the power of a community battery not just to reduce emissions but to bring people together, to start conversations and to allow everyone – whether renting or owning – to participate in our energy future.”

Those conversations include queries by community members about why governments are not simply subsidising home batteries or installing more grid-scale batteries.

Shue says few people understand the need for smaller distributed batteries that can allow the benefits of rooftop solar to be accessed across communities regardless of whether a household has panels or not.

Faster, leaner rollouts

The Richmond battery is not Yarra Energy Foundation’s first run at an inner-city energy storage system.

It installed a community battery in Melbourne’s Fitzroy North in June last year, using $800,000 from the Victoria government.

The 110kW/284kWh Pixii PowerShaper Battery Energy Storage System (BESS) makes money from trading electricity and from Frequency Control and Ancillary Services (FCAS) services, with an open door to add other revenue streams as well.

Yarra Energy Foundation gets to keep the revenue from the batteries, but Shue says they are considering establishing a community benefits fund from the Richmond battery profits.

The group deliberately decided not to sign individual subscription or reseller agreements with households on the Fitzroy North low voltage network, and will not do so in Richmond either, as it would have given the benefits of the battery only to those households rather than sharing it among the whole community.

If the Fitzroy North battery was the initial test, the Richmond battery will be the demonstration of how setting up community batteries can be installed more quickly and leaner, in order to create a template for “hundreds or thousands” of energy storage systems in communities.

“We’re also looking to demonstrate replicability and scalability of systems. One of the tensions with neighbour batteries is looking for a solution that is going to be standardised, scaleable, familiar to people and local councils who may need to engage with this space, but we’re also looking for ways to be locally sensitive,” Shue says.

Controversial involvement

The grants aim to connect community batteries that will ultimately push down the overall cost of power for consumers, by storing excess solar PV capacity during the day via a deployment of 400 community-scale batteries for up to 100,000 households across Australia.

The grant funding the Richmond battery is part of $29 million from the Department of Climate Change, Energy, the Environment and Water, with another $171 million allocated to the Australian Renewable Energy Agency (ARENA) to deliver another 342 of the shared solar batteries.

But the latter grant was not without controversy, following a move by the Australian Energy Regulator earlier this year to allow monopoly electricity network companies access to the Community Batteries regime, by waiving ring-fencing rules.

ARENA split this round’s $120 million in half, with $60 million going to network companies (DNSPs) and $60 million for non-network applicants. The government department leaned heavily towards awarding DNSPs.

Normally DNSPs are not allowed to own and operate community batteries to prevent competitive markets being distorted. Critics say in this case, DNSPs will have an advantage over non-network organisations and could be able to dominate the design and ownership of batteries funded through the scheme.