The growing presence of battery storage

Homing in on home energy storage

If ever there was a moment in history to fast-track the energy market, it’s now. Gas and electricity prices are sky rocketing and consumers are bracing for worse. At the same time the community is more than ready to embrace home energy systems with storage. Here, some thought leaders pitch their concepts on what will or could drive the market.

FIRST THE NUMBERS: although Australia boasts the world’s highest number of rooftop PV systems per capita due to the more than three million rooftops, currently fewer than 140,000 of those homes have a complementary battery system to store energy.

But interest is bubbling in the community, and research by renewables financier Brighte finds 70 per cent of customers want a battery; all that is holding them back is affordability.

“The price point is the biggest challenge,” says Brighte chief executive Katherine McConnell, adding “We can and should do better.”

She cites AEMO’s Integrated System Plan which identifies more than two-thirds of detached homes should have rooftop solar by 2050 and most of these systems should also have a battery.

These batteries should, along with hydro, contribute to a significant 45GW of new energy storage in the grid with nearly three-quarters of this coming from distributed sources like batteries in homes, she said. “To meet this, we need new battery installations in around 100,000 homes each year for the next 10 years. When you consider this is more than three times what is installed today, it’s clear that AEMO’s target needs us to reassess how to increase access, lower costs and other barriers, and, importantly, build a viable industry to enable it.”

Among Katherine’s recommendations for more accessible residential batteries: adopt the plan put forward in Helen Haines’ Cheaper Home Batteries Bill and extend the existing small-scale renewable energy scheme with small-scale technology certificates made available to solar systems that are coupled with batteries.

Bruce Mountain concurs with Katherine’s views on the pent-up demand and revealed he finds behind-themeter battery storage – and in particular the growth of VPP offerings – somewhat fascinating.

The director of the Victorian Energy Policy Centre told Smart Energy “Home energy storage and participation in VPPs will become far more prominent and enticing over time, there will be substantial self-supply using solar as a primary resource and battery as a storage resource.

“And being able to obtain a wholesale price for batteries when there is grid energy scarcity is a fantastic model.

“Various retailers are offering zero cost upfront retail and will otherwise fund the whole installation so in many cases the customer gets the whole home storage package for no capital outlay, and with no cost after a period of around seven years.

“I think those are absolute winners, it’s only a matter of time before they take off in an enormous way.”

The efficacy of industry channels

“The price point is the biggest Retailers signing up installers for bulk installations receive a fantastic advantage, hence the ability to provide competitive offerings to challenge,” says Brighte chief customers. executive Katherine McConnell

“If you have a business model that does not entail heavy marketing exposure its scale of economy and battery installation will see the same cost curve as solar panels. And from the customer view it’s an absolute winner, we will see a dramatic acceleration in behind-the-meter storage in the next two to three years,” Bruce said. “I think it is waiting on effective marketing… and although home “We need new battery installations in storage is still a bit of a novelty customers just need to take a leap of faith.” around 100,000 homes each year for Evergen is a significant driver in the space. Chief executive Ben the next 10 years.” Hutt whose ambition is to kill coal plants by enabling the transition to “resilient renewable decentralised systems of the future though the VPP promise” outlined his market leading software business that is well regarded locally and internationally as a ‘VPP enabler through storage assets’. “We have the next three years to deliver reform and finance at DER scale,” Ben Hutt told delegates at the Smart Energy Show. The end plan is neatly expressed as: “To make assets perform financially”. His aspirations are matched by those of Discover Energy and Powow who present the compelling case for home storage and participation in the VPP market. (More on pages 40 and 42.) Bruce Mountain observes it does not take much storage policy to tip the scale for these things, and “if there is wide uptake in home storage, and I don’t doubt that, it will have massive implications for the electricity system”.

Rethinking costly transmission upgrades

Along with lower costs of grid-scale batteries and growth of home storage it becomes less necessary to ship energy generation from one state to another given the ability to store energy closer to power generation sources.

“Investing in battery storage [both at small and large scale] works out a lot cheaper than multi-billion dollar transmission lines, and that scenario will only continue to play out,” says Bruce Mountain.

“If the government’s goal is to promote the cheapest energy solution, batteries will almost certainly win. Every way you look at it, our challenge is storage, not transmission.”

IEEFA notes that by 2050, rooftop solar is expected to provide about a quarter of electricity consumption, or about 75GW

Shifting focus

For its part the Institute for Energy Economics and Financial Analysis believes state governments should shift their focus from largescale renewable energy projects to the “immense decarbonisation opportunities” available in leveraging the $25 billion spend-to-date by households and businesses on distributed energy resources including rooftop PV, batteries, electric vehicles and smart appliances.

IEEFA‘s recent report Cheaper Faster Decarbonisation – What State Governments Can Do to Support Distributed Energy Resources details how state governments can leverage an expected $150 billion consumer investment in solar and EVs during next 10 years to speed up cheaper decarbonisation.

“All forecasts point to distributed energy resources playing a major role in the future electricity supply, demand response and grid services,” said report author Gabrielle Kuiper.

Australian households have spent more than $15 billion on rooftop solar alone, over $1 billion on 110,000 batteries, and expenditure on electric vehicles is growing rapidly.

IEEFA notes that by 2050, rooftop solar is expected to provide about a quarter of electricity consumption, or about 75GW. At that time, about three-quarters of all dispatchable (‘on demand’) electricity capacity will be distributed.

Kuiper says state governments are critical to integrating distributed energy resources across the building, planning, transport and technology portfolios, and lists 10 recommendations to lower the overall cost of the energy transition to enable cheaper, faster decarbonisation.

The newly minted Labor government has plans of its own, and delivers a fresh new set of aspirations which are outlined in the Powering Australia plan (see page 13). Part of the grand plan includes investment of $200 million in 400 community batteries installations and 85 solar banks around the country.

And, although their influence on policy setting remains to be seen, the Greens want to raise the bar by subsidising each battery by up to $5,000 for households ($10,000 for small businesses), and providing up to $10,000 in low interest loans ($50,000 for small businesses).

“Subsidies of this scale can render a battery a profitable investment for millions of households and businesses, kicking off a boom and creating thousands of jobs in battery installation and manufacturing,” says Greens Leader Adam Bandt.

Such a plan is, of course, music to the ears of the greater renewables industry.

A more progressive composition of the energy market is unfolding before us and we like what we are hearing.

“If the government’s goal is to promote the cheapest energy solution, batteries will almost certainly win. Every way you look at it, our challenge is storage, not transmission.”