05 October 2015
by Giles Parkinson

Coalition to accelerate battery storage in Australian households

The Australian government has announced that it wants to accelerate the deployment of battery storage in Australian households, chiefly as a means to reduce huge peaks in demand and reduce costs for consumers, but also to cut emissions.

Environment minister Greg Hunt says he wants the two institutions that have been brought within his department – the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) – to bring forward the widespread deployment of battery storage.

“Australia has the highest rate of household solar in the world,” Hunt said in emailed comments to RenewEconomy. “This makes Australia an ideal place to develop storage and battery technology.

The battery storage market in Australia is widely tipped to take off in the next year. One of the triggers will be the arrival of the first Tesla Powerwall products in Australia in the next two months, although other international manufacturers such as Panasonic, LG, and Kokam already have products in the market.

Next week, Enphase will launch its “plug and play” battery storage product into Australia. Like Tesla, Enphase is targeting Australia because of the unique nature of its markets – high electricity prices driven by soaring grid costs, particularly to meet “peak” demand, the world’s biggest penetration of rooftop solar, and lots of sun.

Added to this, tariffs are also being changed in NSW, Victoria and South Australia, which will mean that some 230,000 households used to receiving premium tariffs will get little or no payments for exports to the grid. Those who produce more electricity than they need will then have an incentive to store it in a box for use in the evening.

Both Tesla and Enphase believe that parts of the market are already at grid parity, although it should be pointed out that this is a complex calculation, depending on solar array size and orientation, consumption patterns and tariff structure.

It’s staggering to think that it has taken this long for a federal government – be it the Coalition or the Labor governments before it – to realise the opportunities in household solar and storage. But now both the Coalition and Labor are enthusiastically talking up the opportunities of households leading the energy revolution.

It’s a winner at all levels. It is clear that the combination of battery and storage will reduce costs for individual consumers, and for the system as a whole, although some incumbents may bleat about lost revenue opportunities.

Hunt says he recognises this and wants to accelerate this rollout, and to promote local battery storage technology.

“Australia has a large market for storage, with a high number of residential solar users that could benefit from storage technologies,” he said.

“Storage is also good for grids and networks – it can smooth out energy supply, reduce peak loads, mitigate the need for network upgrades and allow utilities to better manage power supply and demand.”

“Storage allows for wider and deeper uptake as well as greater grid stability. Greater uptake means reduced emissions.

“All stakeholders recognise the importance of flattening peak demand. Network operators recognise that this is part of their responsibility of reducing the costs to rate-payers.”

ARENA and the CEFC have already been active in the battery storage space at the household level, but the Coalition government might want to impress on regulatory bodies.

CEO Ivor Frischknecht has said he expects a fall in battery costs of between 40 and 60 per cent by 2020, and says that one million homes are hungry for battery storage. Morgan Stanley has predicted that 2.4 million homes could use the technology within 10 years. BNEF predicts an even higher uptake by 2035.

ARENA has funded battery storage developers such as Ecoult, and SinoEv, as well as storage integrator Sunverge. It funded research by AECOM that saw battery storage as one of the industry’s “megatrends”, and has backed the development of a national energy storage “knowledge bank”, based out of the University of Adelaide.

ARENA is also supporting trials being run by Ergon Energy and Sunverge that will see how battery storage can help households trade their output of solar, and even combine to act as a “virtual power station” to respond to grid demands. Ergon has already installed battery storage at grid level, saying it is cutting costs by around 30 per cent.

Another trial based on a similar concept of using solar and storage to trade power is being run by Reposit Power in Canberra, also funded by ARENA. The agency is also funding trials in Canberra by IT Power that compare the performance of lithium-ion and lead battery.

The agency is also funding large scale battery storage installations at Coober Pedy, Rio Tinto’s Weipa mine, Sandfire Resource’s Degrussa copper mine in WA, and a large scale storage project in South Australia, which already sources 40 per cent of its electricity demand from variable wind and solar.

The CEFC says it is also supporting battery storage through its provision of low cost finance via banking groups CBA and NAB, as well as Origin Energy. It is also financing the Degrussa solar plus storage installation.

“Australian cities can benefit from a broad range of clean energy technologies, such as LED street lighting, solar PV and battery storage, smarter energy management, waste-to-energy plants and cleaner cars,” CEFC CEO Oliver Yates told the Smart Future Cities conference in Newcastle on Thursday.