Networks launch grid PR push as battery storage looms

Australia’s electricity networks are launching a major public relations push, promoting the benefits of the electricity grid just as the battery storage market appears set to take off.

The Energy Networks Association – on behalf of the state and privately owned networks – has launched a new website called “Hello Grid” featuring sponsored stories highlighting the benefits of the grid, and its embrace of new technologies.

The campaign comes as the networks sector faces the biggest threat to its business model in decades, with 2016 expected to usher in unprecedented uptake of battery storage in a country which already has the highest penetration of rooftop solar in the world.

Australia is already attracting the global product launches of a number of international battery storage developers – most notably Tesla and Enphase, and a host of other new products. Local battery storage manufacturers such as RedFlow compare the uptake of battery storage to the arrival of the internet more than a decade ago.

The ENA – of course – argues that the grid is an essential service and that customers should remain connected, even if they have battery storage. It is even promoting electric vehicles as a means to sell electricity back to the grid. Clearly, it wants storage to be used to deepen the relationship with the networks, rather than as means to leave them.

Few would disagree with the idea of the grid being the preferred option, because an existing asset would surely be the most efficient way of delivering and sharing energy.

But the issue for networks is the cost of that service, and whether the industry is truly competitive with new technologies.

A more than doubling in network costs over recent years has underpinned soaring electricity bills, and the combination of high electricity prices, network tariffs, and excellent solar resources is making Australia one of the most prospective markets in the world for battery storage.

The networks say they are trying to frame tariffs so that they are “cost reflective”, but some of the actions have been heavy-handed – raising fixed charges, attempting to hit solar households with extra charges, fiddling with data, and putting in restrictions on new technologies. Critics say the tariffs are anything but cost reflective, and in some cases simply a means to collect revenue and to slow down the uptake of disruptive technologies.

All this is happening while the primary cause of the expanded grid – the rush to air conditioning – remains largely undressed, along with other massive cross-subsidies between city and regional consumers.

It is the combination of all this that is inspiring many consumers to consider leaving the grid altogether. And as battery costs fall – and all analysts, most recently Lazard, predict at least a 50 per cent fall in coming years – then many others may follow.

A major study conducted by the CSIRO and the networks in 2012 highlighted the risks involved for the network. The Future Grid report pointed to a scenario where half of all demand would come from “local generation”, and hailed the rise of the “pro-sumer” – consumers who also produce their own electricity.

But it also warned that if networks failed to adapt, then up to one-third of their customer base could choose to leave the grid.

The networks, while seeking to change tariff structures, have rejected calls for them to write down the inflated value of their assets. They have even flagged potential “penalties” for people who do choose to leave the grid, and have sought changes in depreciation allowances that would allow them to recoup the cost of their investment more quickly.

An updated study is due to be released by the CSIRO and ENA in early December. The results will be fascinating to see.

One of the biggest arguments against grid defection is on cost; the incumbent utilities argue that the “return on investment” will not be compelling for many years. But others wonder if consumers care. When they choose a fridge, a TV, or even a car, they rarely consider ROIs. Who’s to say they would not do the same for battery storage and solar?

Hence the need for Hello Grid. The ENA says it is designed to provide information about the initiatives being taken on the networks, the introduction of new technologies, and the transition to a “smart grid”.

As part of the campaign, ENA has sponsored a series of articles on Gizmodo promoting new technologies, as well as posts from other bloggers.

It has a range of resources, including a quiz, which it uses to underpin its principal points – that the grid is essential and reliable, and that rooftop solar, for all the installations, plays a minor role in total production.

“While incredible numbers of Australians are installing rooftop solar, it produced about 3 per cent of our electricity consumption in 2014/15, or 5052 gigawatt-hours,” the website says.

Grid operators, however, suggest that at current rates of uptake, rooftop solar could be meeting all daytime demand in states such as Western Australia and South Australia within a decade.

And how reliable is the grid? Very reliable: “The entire Australian grid provides reliable supply without outages for 99.95 per cent of the year (on average),” the quiz answer notes, adding that blackouts are usually caused by “natural disasters” and the grid “provides the backbone of our economy and our connection to a cleaner energy future.”

It adds: “Did you know that the Australian electricity networks could go around the world 22 times, or to the moon and back?”

Some would say that is too long, and there might be smarter ways of doing this – local generation, micro-grids etc, and by encouraging networks to invest in alternative technologies, such as battery storage, rather than building more poles and wires.

But the rule setter – the Australian Energy Markets Commission – has punted any such changes until the next regulatory period, beginning in 2019/20. Meanwhile, the networks are likely to be allowed to spend another $50 billion in the coming five years, despite claims that this is too much.

The government-owned NSW networks, however, want to spend more, and have taken their complaints to court, reportedly spending 10s of millions in legal fees taking on the Australian Energy Regulator and consumer groups.