The Battery Conversation
The Battery Conversation
Ergon Energy has been saying for some time battery storage will change the electricity landscape and we've been on the front foot preparing. And Tesla's recent Powerwall launch which has already garnered an impressive 38,000 units in advance orders could well be the start of the most significant change to our industry in generations.
Cairns-based Manager Technology Development Michelle Taylor is our company's subject matter expert on battery storage technology, which is set to boom in popularity in the future, particularly as more than 100,000 Ergon customers and 400,000 Energex customers already have solar power.
How and when exactly battery technology will take-off and impact the network is unknown at this stage but Michelle is in the front seat advising government and industry about how to plan and prepare for the day it comes, and it will come, probably slowly at first and then boom.
Michelle explains what has been happening in this exciting growth area.
How much does it cost for a battery storage device?
Right now residential battery systems cost between $10,000 and $45,000, ranging in size from 7 to 25 kilowatt hours and a peak capacity of 3 to 8 kilowatt hours. There is quite a large variety to choose from. But there is no doubt there will be downward pressures on battery prices as new products and manufacturers such as Tesla and other players enter the Australian market.
How many customers have batteries?
The only people who have them at the moment are early adopters. Ergon records show 110 customers across regional Queensland submitted applications for a battery energy storage system (BESS) since September 2014.
When are battery energy storage system (BESS) set to become mainstream?
The CSIRO has done some residential modelling using Townsville as a base. By 2025 they believe up to five per cent of the residential customer market will have battery storage. Nobody knows for certain. However the CSIRO's graph models a number of different tariff scenarios and how they might impact on BESS uptake – the highest uptake is surprisingly under our current tariff arrangements including our current Time Of Use (TOU) arrangements. These BESS are not generally about disconnecting customers from the grid, but about better using locally generated solar energy and/or managing high peak demand costs in the TOU tariffs.
What about in other parts of the country?
All eyes are on what's happening in NSW at the moment. The NSW solar Feed-in Tariff is set to go from 60 cents down to below 8 cents at the end of 2016, which will trigger a lot of people to look at battery storage as a way to get the best return on their solar PV system. At the same time NSW is implementing a new Time-of-Use tariff that will see customers charged over 50 cents per kWh between 2pm and 8pm. I have been talking a lot with our NSW counterparts and they are doing some serious planning. It will be very interesting to see what happens.
So the solar Feed-in Tariff has a big part to play in battery take up rates?
It's very likely. In Queensland the original solar Feed-in Tariff, which pays 44 cents per kWh, is locked down until 2028, so a lot of solar customers are enjoying some healthy returns, which doesn't make batteries all that attractive at present. But who knows? The growing number of new solar customers who sign up to the current 6.53 cent Feed-in Tariff could be open to persuasion, particularly as energy prices increase or if time of use tariffs become standard. Battery take up rates will rise as the solar Feed-in Tariff drops. There are a lot of changes occurring in the tariff space and it will be a challenge to manage how this may impact the uptake of batteries.
How do batteries help the network?
Batteries can play a really helpful role to take pressure off the network in peak times. They can in many respects help to avoid costly network augmentation. Currently there is about 1.3 Gigawatts of solar produced by solar PV owners in Queensland. Nationally it's over 4 Gigawatts. That's a lot of energy. In fact, it's hit a point where we really need to consider sophisticated power management solutions, and battery storage is a solution. Load control is also a solution, and may produce less side effects and be less costly for all.
How could batteries hinder the network?
Certainly in the short term, they present a lot of integration issues. As is often said, the network just wasn't designed to deal with solar generation, and battery storage presents another layer of complexity. Batteries come in all different sizes. Depending on the amount of energy they can store and how often they are used has impacts on customer load. For example, if everyone in a particular area had the same small sized battery and come home from work and use up all the energy in storage in the first few hours, and then go back to grid supply, all it serves to do is push back the peak. That is just one of a myriad of combinations and permutations that could happen.
Long-term there are bigger implications. The death spiral suggests that as more and more people move to solar, batteries will become more attractive and reliable, enabling people to go-off grid entirely and therefore, over time, the grid could become obsolete. I like to think the network will have a vital part to play in the energy mix for a long while yet, but certainly in the long term solar and batteries make for a formidable competitor.
What are you concentrating on at the moment?
It's all about integration. Systems on the market are relatively simplistic in their control. They are designed to respond to simple things like time of use tariffs and energy shifting for renewable energy. The BESS that will help the customers and the network into the future will be far more sophisticated devices controlling energy use throughout a home; making a house truly smart. But this requires a lot of work between the battery system manufacturing industry and utilities and user groups. We are working with lots of industry players and can see there is great opportunity for these BESS in the customer home and in the network.