Network charges may penalise uptake of battery storage, as well as PV | RenewEconomy

Network charges may penalise uptake of battery storage, as well as PV

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Australian networks are also penalising solar households, now it looks like they will do the same with those that add battery storage.

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The trend among some electricity networks to penalise or discourage the uptake of rooftop solar by imposing fixed tariffs or additional fees is now extending to battery storage, with one network accused of trying to lift charges to households with storage even though they are reducing peak demand.

In an analysis of recent tariff proposals by South Australia Power Networks, which included a since-rejected attempt to apply a surcharge to solar households, the Australian PV Institute says SAPN now seems intent on penalising households that install battery storage, despite their obvious network benefits.

“SAPN admit that batteries will reduce network peaks but still wish to charge PV households that install batteries as if they are increasing the peak,” the APVI, an independent institute, says in a newly released discussion paper.

The issue is important in Australia, which leads the world in the adoption of household rooftop solar. South Australia has the highest rate of adoption in Australia, with 28 per cent of available homes adding rooftop solar, which now contributes more than 6 per cent of the state’s electricity demand over a year.

Official forecasts suggest this will increase at least four-fold in the next decade, to the point where rooftop solar will  provide 100 per cent of the state’s electricity demand at certain times.

Hence the importance of battery storage to balance the output, and to ensure some of it used to reduce peak demand. The state government has announced a tender to install battery storage on its buildings, including Parliament House and the key arts precinct, and the City of Adelaide is also providing incentives.

The APVI says its issues with SAPN are applicable to other networks, because they face similar issues in dealing with solar and storage, and their response with tariff design.

The APVI says that SAPN recognises that the next big development is battery storage, and perhaps electric vehicles. SAPN says the “battery storage has the potential to soak up a lot of the excess energy being generated during sunshine and shift that to later in the day when the network peaks”.

But the APVI says: “Given that the most immediate market for batteries is likely to be people who also have PV, will they be charged for increasing network peaks even though, according to SAPN, they will likely be reducing them?”

The APVI criticism extends to SAPN’s proposed “cost reflective” tariffs for rooftop solar, which the APVI argues is not cost reflective at all. That’s because the the proposed demand tariff on household loads shows very little correlation between the costs charged to the customer and the customer’s demand at the time of the network peak.

This means that many households on SAPN’s cost-reflective demand tariff would be paying for augmentation costs at times when their demand was not affecting the cost of augmentation.

The APVI notes that in SAPN’s own pricing proposal, it acknowledges the ability of solar PV – even without battery storage – to delay and reduce peak demand.

The SAPN submissions says: “The network challenges are different today, with problems of low load during days with mild but sunny weather. In summer, the peaks that used to occur between 2pm and 5pm have moved to become slightly lower peaks between 5pm and 8pm.” (APVI’s emphasis added)

Two things can be taken from this, the APVI says. One, that PV delays and reduces demand peaks; and two, that because demand peaks have reduced, there is no need to augment the network and so (from an augmentation cost point of view) whether PV customers increase or decrease their demand peaks is irrelevant, until such time as demand exceeds previously installed grid capacity.

APVI proposes a “real cost-reflective tariff” with a demand charge/reward component that would be applied only over the peak demand months and only for three hours a day – which would create a better incentive for households to implement options that actually reduce their demand during the time of the network peak.

The APVI makes a damning critique of the assumptions used by SAPN, including its claims that solar households have dramatically different load profiles. It says this is not true, and any changes that are evident are probably caused by metering methods than consumption patterns.

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15 Comments
  1. Peter Campbell 5 years ago

    Wouldn’t time of use tariffs sort this out? If you have a battery you would use it to self-consume preferentially and avoid import at times of peak demand, thereby reducing network costs and expensive peaking generators. IE you respond to the price signal. This would be agnostic with respect to storage options and load shifting. It would encourage EV charging outside peak time and timers for appliances so that hot water boosting and dishwashers can generally run outside peak time.

    • A Wall 5 years ago

      The problem is that almost no one in SA has smart meters that log interval data. I got solar at the end of 2013 and have a dumb import/export meter… (SAPN are talking about rolling out smart meters, but even now I’m don’t think they are installing them domestically).
      But yes, I think TOU is a great idea 😉

    • Chris Fraser 5 years ago

      Time of use was the nearly perfect way to even consumer load over a 24 hour day. Reducing peak load was the whole reason for introducing smart meters so long ago. Some say it has worked too well. But smart meters and storage is almost pure genius.

    • john 5 years ago

      Time of Use tariffs is directly aimed at catching PV users however oh bugger they get a battery back up and they do not use power in the high after 4 to 10 pm area.
      Next way to go charge for connection about $2 a day should do it.
      The end result is move off the grid.
      There needs to be a balance between charge and fair community reliance on an essential service i.e. power supply.
      Imposing charges that penalise low energy users by putting up daily charge of supply is inequitable, TOU only hurts those who have no option, moving to a more equitable method supply and cost of power is the question we have to answer.

  2. Warwick 5 years ago

    How is the APVI an “independent” institute? It’s like saying ENA is an “independent” association.

  3. Jennifer Gow 5 years ago

    These guys seem to have a death spiral wish. Roll on grid defection.

  4. Richard Swinton 5 years ago

    This issue shows the major failure of privatisation of essential services. Profit for shareholders takes priority over community needs. No issue with non essential services which you can choose to use; but in our society we see water, basic communication and electricity as essential services. The community can/should use a wider set of criteria then profit to decide what policies to use. The shift to renewables should be encouraged, not penalised to suit shareholder profits.

  5. phred01 5 years ago

    Hello off Grid

  6. Chris Fraser 5 years ago

    SAPN should admit the tariffs are “pain reflective” rather than “cost reflective”. That being, perhaps some of the capex they had their heart set on has been shafted, causing them pain. They should come on here and defend their view that solar and batteries, which delay and reduce the peak they need to capex for, warrants a special tariff.

  7. Gordon Bossley 5 years ago

    How long before we see attempts to FORCE people to stay on-grid, or penalties imposed for disconnecting?

  8. john 5 years ago

    The over capitalised networks have a problem due to a lessening in demand they are squeezed in their ability to recover the expected revenues that the build was planned on.
    3 aspects of the demand lower industry demand, efficient appliances and augmented supply from PV.
    The benefit to the eastern states is a very good stable network where blackouts are only local due to accidents of failure of equipment at a local level.
    The method of being able to charge for demand has problems in encouraging storage from PV, and the idea of fixed daily supply charges while simple to implement is designed to stop any further penetration of PV and storage.
    With this method being adopted the logical conclusion is that local distributed energy solutions will be utilised with even higher charges on a daily basis being implemented.
    The capital value of the networks should be written down in value.
    It would pay the retailers, who have to utilise the network, to supply PV and storage, as is happening to ensure they have a business plan.

  9. BsrKr11 5 years ago

    silly blind fools unable to think about anything other than their own profit margins… hence my agreement with Richard Swinton, time to nationalize the grid and form a national plan to supply energy essentially for free or less than 10c/kWh over time once the capital outlay is recouped.

    • john 5 years ago

      The grid is nationalise by the states they built it

      • BsrKr11 5 years ago

        Yes and no. The point being there are many jurisdictions each with its own rules that makes a national energy plan very hard to implement.

  10. wdondisqus 5 years ago

    The growth of solar power is impressive:
    – “28% of available homes adding rooftop solar”
    – “forecasts suggest this will increase at least 4 fold”
    – “solar PV even without battery storage to delay & reduce peak demand”
    Whatever the economics and incentives, PV is relentless and beneficial. So for all the worry and complaint, it can’t change the above facts which paint an unmistakable success story.

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