The nation’s big energy utilities have whole teams trying to map the future of the grid. You’ll find them behind the virtual door marked “future energy”, and their main role is guessing what the future of “digital, distributed and democratised” energy looks like, and to try and ensure their business models are fit for purpose.
Digital and and distributed are probably the least fearsome concepts of the three, but “democratised” may pose issues. It suggests that the consumer has power over their power supply, if you like, thanks to the options of rooftop solar, battery storage and even EVs. The challenge for the big utilities is to hang on to reasonable revenue and a coherent business case as the transition occurs.
So, it’s likely with this in mind that Origin Energy is looking at “plug and play” battery storage technology, investing in a US start-up called Orison that says it has developed a unique ability to allow small batteries to be installed and plugged in by households, just like any other appliance.
Origin is hoping to trial the batteries later this year, or early next year, subject to regulatory approval. The biggest take-out from this strategy is Origin’s belief that such battery options are going to be more attractive for many consumers than bigger, more expensive batteries like the Tesla Powerwall 2 or the Sonnenbatterie.
And they suggest that small may not only be beautiful, it may be all they need until millions of bigger, but mobile batteries, come into play as the car fleet turns electric towards the end of the decade.
RenewEconomy and One Step Off the Grid has recorded an interview with the founder of Orison Energy, Eric Clifton, which you can find in the latest episode of the Solar Insiders podcast. We also did an interview – not recorded for the podcast – with Scott Ison, Origin’s general manager of Future Energy and Business Development.
Ison says that Origin’s Future Energy division has been scouring the world for new technology and business models to help navigate the energy transition, looking at start ups in Australia and overseas, and taking equity when the opportunity arises. It even has a staff member in the heart of Silicon Valley in Palo Alto.
One crucial observation that Origin has made in developing this strategy is on the uptake of household battery storage in Australia, or more to the point, the lack of uptake. The interest is there, but nowhere near the levels once predicted. It was expected to have jumped three-fold, but over the past year has barely grown.
“What we have found as we see batteries coming into market, is there is not much traction,” Ison tells RenewEconomy. “People interested in solar panels, with a battery option, find that the $6,000 purchase jumps to $15,000 or $18,000,” Ison says. And that’s a significant barrier to purchase.
Hence the interest in Orison’s plug and play battery. It is small – 1.8kW/2.2kWh – and can be plugged in by the consumer like any appliance. It doesn’t export to the grid, but can store excess solar and run certain appliances if the main grid goes down.
Ison says the size, and the price – (about $US2,000 for each unit but yet to be decided in Australia) – makes it a much easier proposition for customers, and with no installations costs.
And Origin, interestingly, is looking at this with an eye on the next wave of technology change, the arrival of electric vehicles and vehicle-to-home and vehicle-to-grid options that will allow those much bigger batteries to be used for home storage, and as a grid resource.
The ANU is leading Australia’s biggest trial to date with 51 Nissan Leaf electric cars that will test the ability of them to operate as a “virtual power plant”. The potential, should the entire Australia car fleet go electric, as some predict, would be a storage resource, albeit on wheels, five times bigger than Snowy 2.0.
“We believe that vehicle-to-grid technology will be important,” Ison says. “In 10 years people will be able to use that as a primary storage for the house, and the requirement for additional storage will be met by Orison style installations.”
Ison says that the economics of EVs are misunderstood. Many people don’t appreciate the low running costs, the low maintenance costs, the fewer accidents, or the potential to actually earn money by providing services to the grid.
“Once you explain to people the benefits of EVs, putting aside decarbonisation issue, they see there are guanine benefits. And once you start factoring V2G into the equation, suddenly the economics are compelling.”
The first batch of 20 Orison batteries are “on the boat”, and will be sent firstly to the company’s testing lab in Melbourne for certification and compliance, and to see what it can do in the Australian context. Then it will be installed in the homes of Origin staffers, before being rolled out more broadly should it live up to expecations.
And it won’t be just for households with solar. It will also be targeted at renters – because they can simply unplug the appliance and take it with them to their next home, and to apartment dwellers, where Origin is looking at new options to tap into solar.
“So if you in an apartment, we could provide a synthetic solar deal for you,” Ison says. “So we know when wholesale prices are low, and we can give a wholesale rate during the day. You don’t have to have solar on the roof.”
Likewise, the battery can be set – it does have sophisticated cloud-based communication options – to soak up excess solar on a hot day, or to create load in the case of a network constraint, operating as a sort of virtual power plant.
These are the sort of options that the Australian Energy Market Operator is looking for as it views a future grid where rooftop solar could account for up to 50 per cent of “instant” demand on the main grid.
As Clifton says in the Solar Insiders podcast, he imagines a scenario where an apartment building has maybe 60-100 units, and the batteries there can do energy trading within that building.
“And so it allows some really interesting scenarios on especially grid services,” Clifton says.
“Every five hundred systems is a megawatt hour worth of storage or dispatchable load. And so apartment buildings start to become very interesting.
“And so those economics, again, are somewhat future leading. But the reality is, as with all of the shelter in place going on, the most important thing in the world is feeling safe and secure and knowing you have some backup power.”
Origin’s investment in Orison has so far been in the form of convertible notes, which could deliver it a stake of up to 20 per cent- depending on the details and scope of the next financing round.