Battery storage market is at home in Australia
Affordable battery energy storage is on Australia’s doorstep and getting an open- armed welcome. And it is the residential sector that is driving demand, likely to overtake utility-scale installations next year to become the dominant grid- connected storage resource. Only the immature supply chain can slow the growth of residential storage and with it the new energy democracy.
Several factors combine to make a perfect storm that will blow away old business models and energy industries unwilling to adapt. Firstly, Australia has lots of rooftop solar PV generation, about 4 GW and over 20% of households, which is significant on a world scale. Secondly, Australia has relatively high and increasing retail electricity prices and low trade barriers, so that solar PV makes sense without subsidy for retail customers, and is increasingly offered with a battery option. Thirdly, existing solar subsidies through feed-in tariff will roll off in coming years, starting with NSW in 2017, creating a strong motive to use energy storage to maximise self-consumption of solar energy. Fourthly, Australia has a disaggregated electricity market that allows new business models to be tried out, and the remaining regulatory hurdles are being scrutinised.
Finally, many Australians are tired of policy uncertainty that has stalled investment in large-scale renewable energy projects, and are happy to take matters into their own hands by installing their own renewable generator, particularly if it also saves money in the medium term. So all eyes are turned to Australia where the population is transforming the energy system in the absence of a credible clean-energy policy from the federal government.
The clarity of this high-level view is lost in the fragmented situation on the ground. This May and June there have been four significant announcements by new entrants into the residential energy storage market, lacking complete information and business models, creating a flurry of interest, and causing many commentators to stay that the age of affordable storage has arrived. Probably they are right.
The Tesla Powerwall has been the most talked-about product because it set a price benchmark at USD 3,500 for a 10 kWh system. Its power capability was a first criticised as being too low and has since been doubled to 6 kW. No-one expected such a low price so soon – coming to the Australian market in 2016. This price is without power conversion and installation costs, and a fair price comparison should account for the cycle lifetime, the allowable depth of discharge, and the system efficiency. Tesla products compete well on this basis, and are also supported by favourable customer sentiment based on their high-performance electric vehicles – a truly brilliant strategy to bring reputation and profile into the stationary storage market. Tesla has teamed up with Australian startup Reposit Power to provide storage control and trading.
But others will not be left behind and there will be stiff competition on price and product integration from other vendors. On the same day as Tesla’s
announcement, major energy retailer AGL announced its Power Advantage offering 3-34.5 kW of solar PV with 6 kWh of batteries. The price is not discussed and won’t be easily discerned because the products will be bundled with leasing and pay-per-use options in a new range of storage-enabled supply contracts. Panasonic has teamed up with another retailer, Red Energy, and two network utilities that have a retail arm, Ergon Energy and ActewAGL. They are offering 8 kWh batteries with 2 kW power designed for solar self-consumption. AGL and Ergon Energy will be speaking at the Energy Storage World Forum in Sydney in September. Trina Solar, possibly the world’s largest supplier of crystalline PV modules, came out with its new Trina Home battery range up to 15 kWh with up to 9.6 kW power. No retail partnerships are announced but will undoubtedly follow as the market explores newly available vendor offerings. These are all lithium-ion systems.
So that’s the talk, what’s happening on the ground? Vendors are installing storage systems on a commercial basis for early-adopter customers. Significant
behind-the-meter trials of batteries combined with solar PV are in progress by distribution network operators AusNet Services, Ausgrid, and United Energy. Network companies, energy retailers large and small, vendors, the regulator, and customer interest groups eagerly await trial results. These activities are essential to understand:
- performance boundaries of the technology,
- network and market impacts of customer applications like solar self-consumption, and
- potential network support services that could be obtained from customer
storage with the right incentives in place.All three network utilities running trials will be speaking at the Energy Storage World Forum in Sydney, 14-18 September, will include the 3rd Residential Energy Storage Forum where experts will address these and related issues in depth.
Batteries are hard to obtain in any quantity and there is unmet customer demand for multiple vendors’ products. Delays are not so much due to supply of battery cells than to integration and certification of battery systems. We can be confident that these will be dealt with to ensure a growing supply because, now, the commercial case for residential energy storage makes sense. Everything else will follow. Energy democracy – the ability for people to guide by their choices the evolution of our electricity system – has arrived.
Dr Geoff James writes regularly for Dufresne Research, producers of the annual Energy Storage World Forum (Europe and Asia) where more than 30 Utilities/TSO/DSOs gather each year. He is a consultant in clean energy with 22 years of experience with the CSIRO.
Contact him at firstname.lastname@example.org or join in our discussion at our LinkedIn Energy Storage World Forum group.
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