Exclusive research by the University of Queensland, commissioned by Ergon Energy has shed light on some of the challenges ahead for residential battery storage.

The research found battery storage is not yet at a price point to make it economically viable for mass uptake and a report from the Australian Energy Market Operator says it could be many years away.

And battery storage may not necessarily benefit all customers and may not be the best way to manage or reduce peak demand on our network.

Peak demand for power is a key issue for Ergon Energy and most Australian network distribution businesses.

It’s that 4pm to 8pm peak that can stress our network and shorten its operational lifespan. It drives the investment in power generation and augmentation to increase the capacity of our network, costing us more and ultimately putting upward pressure on power prices.

Or picture this - it’s like spending hundreds of millions of dollars on a four lane highway that is mainly used for peak hour traffic four hours a day and under utilised the rest of the time.

The University’s 14-week study analysed usage patterns, load profiles and solar PV generation data from an area in Cairns and simulated what customer bills, network revenue and peak demand impacts would be like if large numbers of customers had standard-sized battery storage devices as part of their home energy mix.

The research included complex interactions between customer bills, revenue and peak demand.

It revealed tariffs alone may not provide an incentive mechanism to reduce peak demand. It also showed, batteries to a certain penetration level could reduce peak demand and after that they may introduce secondary network peaks. And maximising the network demand benefit from customer-owned batteries was likely to require an integrated interaction between customers and networks.

Other key findings indicated that it was not currently economically viable for a customer to install a battery as the financial gains were negligible – the time it would take to pay-back all the set up costs, at today’s tariff rates, were just not worth it.

This is especially true if customers had the State Government Solar Bonus Scheme 44c per kilowatt feed-in tariff, making it far more lucrative to sell back the electricity generated, rather than storing it in a battery during the day and using it at night.

Of course, this all depends on the size of the battery, the customer’s energy use and local generation, but at standard, affordable sizes, the simulation showed that households could use the stored energy within a few hours upon returning home from school or work in the afternoon, serving little benefit other than pushing back the peak, albeit for a shorter duration.

This paper based research revealed some unexpected findings however Ergon is continuing to explore options to enable customer based energy storage in a way that is economically efficient for customers and utilities.

We appreciate your feedback. If you would like to comment on this story please contact talkingenergy@ergon.com.au.

Source: The University of Queensland Australia, Ergon Energy BESS Control Methodology June 2015