Rooftop solar, battery storage to dominate Australian grid

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Bloomberg New Energy Finance says consumers will provide more than half of Australia’s electricity needs by 2040, with 37GW of rooftop solar, and 33GW of battery storage. This reflects a global trend. Centralised generation will be in decline, but it will still take a lot to kick last coal generators out of the market.

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Rooftop solar and battery storage will account for more than half of Australia’s electricity needs by 2040, reducing the need for fossil fuel generation, as the share of fossil fuels falls by more than half to around 40 per cent.

Bloomberg New Energy Finance says Australia’s power sector will fundamentally change over the next two decades, as households and businesses turn to rooftop solar and storage and utilities shift to renewables to replace ageing coal and gas plants.

It is part of a massive global shift, with more than $3 trillion being invested in small-scale solar and battery storage worldwide, as the global energy system becomes largely decentralised.

The report predicts more than 50 per cent of Australia’s generating capacity will be located “behind the meter” by 2040, meaning that consumers will become “pro-sumers”, generating and consuming their own electricity. BNEF predicts 37GW of small-scale solar PV – mostly on rooftops – and 33GW of battery storage will be installed by then.

bnef australia forecast

“This will be driven by the superior economics of these technologies, which will be able to supply consumers with electricity at a lower cost than the grid” said Kobad Bhavnagri, the Australian head of Bloomberg New Energy Finance and co-author of the Australian chapter of the report.

The BNEF report follows predictions from the Australian Energy Market Operator, and even some of the main utilities, which follow along the same lines. Last week, AEMO forecasts suggested that rooftop solar capacity would overtake coal capacity by 2030 and that, within 10 years, rooftop solar would be providing 100 per cent of grid demand at certain times in South Australia.

The BNEF predictions for Australia are part of a global trend that will see energy systems move from centralised to decentralised grids, including in developing nations.

Some $2.2 trillion is expected to be spent globally on small-scale solar, as capacity grows 17-fold to 1.8TW (that’s 1.8 million megawatts). But nearly half of this ($US1 trillion) will be in developing economies, in many cases bringing electricity to remote villages for the first time.

global bnef capacity

Indeed, solar and wind energy will dominate global installations out to 2040, with $US3.7 trillion spent on solar (mixed between large and small-scale) as the cost of solar technology halves again. The forecasts above are based on no further subsidies after 2018, be that feed-in tariffs or net energy metering – from 2018, except for offshore wind, which will see subsidies end from 2030.

 However, despite this boost in renewables, there will still be too much fossil fuel capacity remaining in the system, meaning that climate goals will not be met.

Part of the problem is that the high cost of gas means that gas-fired power stations will likely close before coal plants, meaning that the great “gas transition” will not occur. This is one reason why Big Oil recently called for a substantial global carbon price to help push out coal generation. The one exception might be the US, where gas is cheaper and the government has strict emission limits on coal generators.

In Australia, the grid faces similar problems. Just over 29GW of fossil-fuel plants will be retired by 2040, including some 12GW of coal capacity, but 8GW is refurbished to prolong its operational life.

“Old coal is very cheap”, Bhavnagri said. “With our existing suite of policies, coal generators will run for as long as is physically possible.”

But Bhavnagri said any new large-scale capacity in Australia would be almost exclusively renewable. He predicts large-scale solar PV (currently little more than 130MW) will reach 15,000MW, overtaking wind energy (now 3,500MW) which will be 13,000MW.

BNEF says these future large-scale solar projects will be lower in cost than building new coal or gas generators, even without subsidies.

“The economics of new plants are very different from old”, Bhavnagri said. “Old coal is cheap, because only the running costs need to be met. But building new coal or gas is very expensive, as construction is capital intensive.”

Coupled with the relentless growth in rooftop PV, this will mean over half of Australia’s power capacity, and 59 per cent of generation, will be renewable by 2040. The grid will be kept stable by large amounts of flexible capacity, which includes at least 33GW of battery storage – also more than Australia’s current coal-fired fleet.

“This will require sophisticated market mechanisms to be developed to enable the system to effectively utilise these assets”, Hugh Bromley, BNEF’s specialist in distributed energy, said.

“Energy storage will need to be used to meet peak demand in winter from 2033, and households will have more than enough battery capacity to do this. But the grid will need to be managed in a much smarter way to co-ordinate the millions of new household participants.”

Despite the change in makeup, Australia’s power sector will not decarbonise substantially until 2036. The low cost and long life of coal generation will mean power sector emissions fall by only 9 per cent by 2030, compared to 2014.

“It is not until 2040, when the bulk of fossil-fuel retirements have taken place, that power sector emissions substantially fall,” Bhavnagri said.

“Carbon emissions will remain stubbornly high unless coal closure is accelerated. Additional policy will be required if Australia is to set a goal for emissions reductions at the Paris Summit that is in line with our major trading partners.”

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  1. lucyjunior 4 years ago

    I think you underestimate our rate of change. It is likely solar will accelerate with initiatives allowing rooftop solar rentals as well as battery uptake. Coal may be dead and buried sooner than expected.

    • Humanitarian Solar 4 years ago

      Hi Lucy, with rooftop solar rentals they can be designed and installed in a way to support the owner and less so the renter, like renting often does. If your concerned about people’s ability to cover the upfront system cost themselves, most good installers will be able to stage a solar system so people can add additional stages later. e.g.. people could begin with their smallest roof and only provide a few batteries so if the grid goes down they still have a few hours of battery backup. A hybrid solar system that’s done in stages, could also be designed to transition the family to off peak electricity rates, even if the family couldn’t afford to be off grid entirely. So there’s many many financial stepping stones the competent installer can offer. I think its well worth consulting local technical expertise.

  2. Jacob 4 years ago

    Beijing has shut down coal power stations or converted them to run on gas.

    Hopefully other cities in the world enact the same policy.

    And how cheaply can old coal power stations produce power?

    If battery prices crash to 2c/kWh then would old coal really be able to compete.

    • Mike Dill 4 years ago

      The Gobi desert north and west of Beijing is filling up with wind and solar PV.

      If batteries can store energy for 2c/kwh then old coal will be dead. PV solar is getting down to 5 or 6 cents per KWH now, and and onshore wind is between 2 and 5 cents per KWH. Storing the excess will be cost-competitive with baseload when transmission costs ( and the mark-ups ) are added in .

      • Humanitarian Solar 4 years ago

        Hi Mike, yes its exciting the addition of storage will result in renewables competing with fossil fuel baseload power. In theory there may then also be cheaper distribution costs (less transmission loses), if renewable generators increase throughout the continent. I hope a potential reduction in transmission costs results in lower daily supply charges.

    • Ronald Brakels 4 years ago

      How cheaply can old coal power stations produce electricity? Well, back when we had a carbon price, Victoria’s brown coal plans accepted an average price of under 2 cents a kilowatt-hour and kept operating.

      But battery storage doesn’t have to cost 2 cents a kilowatt-hour to be competitive. If the batteries go in homes and businesses the toal cost of energy storage only had to be less than the cost of grid electricity minuse the solar feed-in tariff to be competitive. That’s why the Tesla Powerwall is impressive. Once we can get our hands on them they will be able to produce a better return than the stock market average for some Australians.

      • Humanitarian Solar 4 years ago

        Hi Ronald, I agree on your position re the importance of batteries although there may need to be care to mount the batteries in a cool location too.

        “A high average working temperature results in accelerated aging because the rate of the chemical decomposition process in the battery increases with temperature. A battery manufacturer generally specifies service life at 20°C ambient temperature. The service life of a battery halves for every 10°C of rise in temperature” (, Energy Unlimited, p18).

    • Humanitarian Solar 4 years ago

      Hi Jacob, gas was once a wondrous transitional fuel. I live in an area where there is fracking in my water catchment and its now being looked at for environmental concerns. I don’t know what % fracked gas is for the extraction of natural gas as a whole, though energy companies whose websites I’ve looked at for shareholders, promote fracked gas as the future for their investors.

  3. newnodm 4 years ago

    “Old coal is very cheap”, Bhavnagri said.

    As long as using the atmosphere as a sewer is nearly free, this is true.

    • Humanitarian Solar 4 years ago

      I think you’ve hit the nail on the head. Collective awareness our survival depends upon the environment is still building.

  4. Kevin Brown 4 years ago

    I am sure as hell defecting ASAP from the grid following the imposition of these new fixed charges.

  5. Farmer Dave 4 years ago

    BNEF’s reported prediction of the long life of much of the current coal fired power stations is bad news. The control of carbon dioxide emissions is not really about percentage reductions, but about an overall carbon budget – total emissions between now and 2050. Imposing a carbon budget makes the use of fossil fuels a zero sum game – if more coal is burnt, then less oil can be in order to stay within the budget.

    The problem is that it looks like getting off transport fossil fuels will be harder than getting off coal, so we need to de-carbonise our electricity supply as soon as possible in order to give us more time to de-carbonise transport.

  6. Humanitarian Solar 4 years ago

    Australia’s landscape is unique in the world. We’re an expansive continent in which a grid has only been partially rolled out. The solar industry here saw many so called early adopters in cities implement grid-connect systems. Country folk have been using off grid systems long before the grid got out that far and before that the old generator got a thrashing. Off grid systems were used long ago in developing countries with a weak or intermittent grid and in yachts and motorhomes that cannot tow a grid around behind them. So globally we now have lots of expertise, over three solid decades with solar in various configurations.
    Australia however has had a push with its solar penetration and many city folk who were early adopters, are coming to grips with their government subsidised feed in tariff running out. When this happens, suddenly the rubber hits the ground and we all find out how well small scale and large scale solar generation/storage works. Will it really have a speedy payback time or will it limp along until batteries evolve? The only thing we do know is if this new technology works, the result will be so far reaching, the expansive city grid and the rolling hills of poles and wires into the country areas may be profoundly impacted.
    Suddenly if a whole minority group significantly reduce their grid consumption, the grid becomes less profitable. Being less profitable means moving to a grid with less maintenance as there’s less people paying for it to be maintained and hence these people get less quality, less reliability of service. Instead of the grid continuing to be rolled out to country folk and new urban villages, the grid could conceivably focus on areas that remain most profitable and have a planned for decline in areas where population density does not provide a profit. The problem is so large with such a large continent, its like trying to ask a government to take responsibility for people’s land on the coast effected by global warming.
    In summary if solar generation/storage is a success, then some hard decisions will be made about who continues to get a grid and where the grid goes in the future, and where it does not. On one hand a grid appears like a humanitarian need and yet some developing countries are not adopting a grid in the way we have. When change happens it’s always those who most resist change who are the most effected by it. Some folk tend to think a big daddy government will always provide for the people and yet it is more about spotting those sailing ships on the horizon and accepting they may one day come ashore.

  7. Humanitarian Solar 4 years ago

    With the group of Australian households we call “early adopters”, how much do installers currently think it costs to change them over from Grid-Connect to a Hybrid Solar System, where they have some level of storage??? Could an INSTALLER or two or three – Please give us an idea for a three bedroom house, with a typical electricity bill, middle size Australian family, what is the real costing of storage for:

    a) the Grid Connect family to have some hours of UPS (uninterruptible power supply) feature, hence an inverter/charger and a few batteries to carry the home through your expected average grid outage?

    b) enough storage to even out their peaks and troughs of usage during the day, so they don’t have to effectively sell most of their self generated electricity to the grid then buy it back when they need it?

    c) enough storage to carry them through to the off-peak tariff at 10pm?

    d) enough storage to carry them through a summer night from dusk to dawn?

    e) enough storage to carry them through a string of winter days and nights with cloud (hence be off-grid)?

    Even though we will be talking in generalities as much as there can ever be a thing called the average Australian household/family/electricity bill, please give it your best shot, what do you tell your customers in this kind of costing of levels of provision of batteries?
    Where do we stand in real Australian dollar terms in June 2015???
    Can you please also give us your rationale for your choice of inverter/charger and your choice of which battery technology???
    THANKS SO MUCH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • mick 4 years ago

      sorry for the hijack im new to this previous post was a parcel,i want to help out the climate round table group does anyone know how to contact them cheers.also best of luck I got off the grid with a set up similar to a motorhome not sure that would work with a family but you may be able to adapt 12v tech.

      • Humanitarian Solar 4 years ago

        HI Mick, I began with a motorhome setup in a campervan. As you know motorhomes have the same types of components to an off grid solar install. I’m interested in if your in a rural setting and what were your reasons for going off grid? For those who don’t know, the first off grid systems were 12V. Mick how long have you been off grid?

        So to give us some historical context, MIck in what year did you go off grid, what’s the size of your system and how much did it cost you back then?

        Is there anything you would you like to say to Australian Grid-Connect families, who are considering the conversion to include battery storage? It’s really exciting where we’re all headed to at 2040. What we really need is an orientation for acting in 2015.

        • mick 4 years ago

          im out scrub which gives me freedom and space 5yrs seriously off grid solar building up over time onan genny backup agms series/parallel solar hot water panels backed by wood heater water jacket(modern,efficient) wood stove thermosiphon to a boiler in the ceiling,wrap around veranda trees planted to the west with rainwater tanks on western wall to aid cooling bore water to keep grass green also to aid cooling 3 foot thick stone and insulated roof any electrical app I can use on elv I do basic but works p.s. first off grid I saw was 32v.cheers

          • Humanitarian Solar 4 years ago

            awesome Mick, sounds like you’ve thoroughly planned out all your systems in order to get you over the line to get off grid – electricity, heating, cooking, solar hot water and adding passive solar design features to your home like the thermal mass in your walls and placement of your water tank. Your house sounds like an environmentally friendly work of art you’ve shaped over many years.

          • mick 4 years ago

            cheers mate thought you might like a good read sustainable house by Michael moggs available in library good info re efficiency and neutral print

    • Humanitarian Solar 4 years ago

      To keep the solar industry moving ahead in 2015, I think its really important for INSTALLERS TO OPEN SOURCE THEIR KNOWLEDGE BASE AND APPROACHES, in order to help everyday Australians who are preparing to act now.

    • Humanitarian Solar 4 years ago

      There’s lots of advertisements around for Grid-Connect solar systems. The current challenge with Grid-Connect solar systems is Grid-Connect solar systems end up exporting allot of their output to the grid for something like 8 cents/kW and then having to buy this power back for about 35 cents/kW. Grid-Connect solar systems use the grid as an expensive battery because solar panels are often not good at suppling electricity upon your demand (if you turn on a number of appliances to make a meal the solar panels may not keep up). So what Grid-Connect solar systems often do is trickle your electricity into the grid then you buy it back from the grid when you need it. Unfortunately this large difference between 35 cents/kW and 8 cents/kW can slow down the ability of your solar system to pay for itself as soon as possible. A second problem with a Grid Connect solar system is the Grid Connect inverter they come with may need to be thrown away, when it comes to the time when you wish to add batteries. Batteries need an inverter/charger that is intelligent enough to manage batteries and a Grid Connect inverter cannot do this. This makes it hard to get the money back for the Grid Connect inverter part of a Grid Connect solar system (unless you can use all your electricity as your solar panels produce it), in a country like Australia, where feed in tariffs for the grid are low. The third problem of a Grid Connect inverter is usually they shut down when the grid has an outage. This means you can’t use the electricity the sun is still producing for you when you most need it. IMHO this is why the solar industry is moving towards Hybrid Solar Systems, with the ability to store some electricity in a few batteries, to even out the peaks and troughs of your electricity usage and give you at least a few hours of uninterruptible power supply (UPS) feature. The inverter/charger that a Hybrid Solar System uses is probably more expensive because its more intelligent than a Grid Connect inverter, however then again it can manage batteries, giving you more options for the future and creating more opportunities to pay back your solar system by saving you from the selling/buying electricity cycle and using the sun and your batteries to transition you towards off-peak electricity rates.
      The good news for people with a Grid-Connect system who are not on a generous feed in tariff and who now feel disappointed with their electricity bill, is your solar system is probably generating a substantial amount of power, and your doing the environment a wonderful thing, its just that the inverter you are currently using may result in you only using a small % of your power. Hence the majority of your solar system is working fantastically and your system only needs a small modification, an addition of an inverter/charger capable of managing a few batteries. No need to despair, regardless of future government policy, help is on the way in the form of installation kits for home storage.

    • Humanitarian Solar 4 years ago

      A renewable grid is a high evolutionary imperative for the survival of the environment. Rooftop solar and battery storage implemented behind the meter-box are a high evolutionary imperative for social justice. Everyone deserves to power their cooking and heating without companies extracting a profit from humanities basic human needs. The sun shines for all of us equally.

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