The growing deployment of home energy storage is commonly viewed as yet another threat to the traditional utility business model, with its ability to potentially make total independence from the grid a reality.
But the findings of a new trial indicate this may not be so and rather that not only are there benefits to the consumer, but there can also be even greater benefits for the utility.
The 3-year trial undertaken by AusNet Services, presumably in Melbourne where the company is headquartered, found that a typical residential customer with solar panels could save Au$1,500 (US$1,150) over five years by adding a battery storage system. But the potential benefit for a network from the same system, depending on its location, could be up to double, i.e. Au$3,000 (US$2,300) over the five years.
“The findings show that network businesses have real incentives to support the take-up of this new technology,” comments AusNet Services’ General Manager Asset Management Alistair Parker. “The trick is to find ways to share those benefits with customers so that both parties have the incentive to move forward together.”
Residential battery trial
The pioneering trial, one of the first of its kind in Australia, if not in the world, was launched in December 2012. The focus was to establish the potential for residential batteries to flatten residential customer demand profiles, manage the peaks in network demand that are driven by residential customers and improve the integration of residential solar power into the network, along with an assessment of the ensuing financial benefits.
Ten customers in different locations and with different consumption patterns were selected to participate and were provided with systems comprised of a 6.6kWh lithium-ion battery and either 1.2kW or 3kW solar PV along with an inverter and other equipment.
Over two summers, five different ways of providing demand management were tested – peak lopping with fixed and dynamic setpoints, solar charging, tariff optimization and scheduled operation (in which the battery was discharged 100% during network peak times). These were chosen to vary the source of battery charging (off peak grid electricity or solar) and vary the balance between targeting customer benefits or network benefits.
In addition to demonstrating that residential battery storage can provide significant benefits, the study found that battery system costs are still generally uneconomic at the present time, even when the customer and network benefits are captured and combined. For systems similar to those supplied in the trial the 2015 cost is estimated at Au$12,900 (US$9,800).
However, this is expected to change in the near future with technology cost reductions and potentially the development of business models that unlock additional value. Projected cost estimates are Au$9,800 (US$7,500) in 2018 and Au$6,100 (US$4,600) in 2023.
Grid potential of residential storage
With Australia having a large number of residential PV systems – an estimated 1.4 million – these could, if paired with battery storage, play a significant role in the operation of the grid. [Engerati-Australian Households To Lead the Energy Revolution]
However, Parker cautions that facilitating the widespread take-up of these technologies is a massive challenge for the industry, governments and consumers.
“Network businesses must understand how to integrate these technologies into the existing grid before they penetrate the mass market, potentially causing massive network disruption,” he says, adding that it’s still only early days.
A key will be to define what goals Australia wants to achieve, and for providers to develop products, services and tariffs that deliver those goals.
AusNet Services is now taking forward the learning from the study with further activities. These include local aggregation of storage and potential exchange of energy through “mini grids”; the investigation of potential new demand-based tariffs or other financial benefits for customers; facilitating the deployment of storage to address network issues; and testing backup power supply capability that could maintain supply to customers in the event of a network outage.