Retailers and demand response hold the key to battery storage

As the hype generated by Telsa’s “Powercoffin” still echoes through the media, the reinforcement of the knowledge that affordable storage is essentially here begs the question, who will it benefit? There is one thing for sure, unit dwellers and renters are most likely to pick up the tab for reduced consumption based revenues.

Storage should reduce demand peaks on the grid at more significant times such as evening and therefore reduce network costs, but this is not likely to occur with organic take-up of battery storage. There needs to be a revolution, and retailers have the key.

Retail deregulation is in place, or about to be put in place in most jurisdictions, this, in theory should allow retailers to create a perfect tariff structure for renewables and storage, and indeed off peak fossil fuels (at least in the medium term).

The tariff would look like this:  It would be a five minute interval bi-directional tariff with live demand D.R.M.  (demand response management) data from the grid. Charging would reflect instant demand requirement of the entire grid, if you chose to consume power when the demand was high, you will pay a premium, likewise if you have energy stored, you could export at a premium.

If the network is low on demand you may wish to carry out energy intensive activities and/or charge your storage unit. All of this can happen automatically through D.R.M. software and signals and D.R.E.D. (demand response enabled devices).

Given this perfect tariff structure it now becomes possible for a unit dweller or renter to store solar or off-peak power in a portable battery storage device which simply plugs into an outlet in the property. The solar or off-peak power is transmitted from any source via an underutilized grid, hence the energy seller gets little but the receiver pays little as well.

Again the reverse scenario is the heavy peak user will pay any seller a premium for energy, reflecting both a supply premium plus a surcharge for creating grid capacity stresses. Which is exactly the way the big end of town currently operates.

This all-inclusive and fair system will not only promote solar and storage installation, but will cause the desired explosion in domestic battery storage, even for non-solar owners. The missing piece in this story is the state owned or state sponsored distributors, who’s fixed charges will be put under great stress under this model.

This is where the retailers have the opportunity to force a change upon these quasi poll (yes poll) tax collectors, The cries of the solar have not’s will be all but silenced and the future of renewables will be assured in a competitive and truly cost reflective energy generation and distribution model.

Coal plants will see more consistent loads with less spinning reserve, thus reducing their costs, gas peaking plants will only operate when power is at a premium, rains days etc. In reality no one loses under this scenario, except perhaps state treasurer, who can then find a way to tax us from the front anyway.

Rob Campbell is head of Vulcan Energy.