Image: McKell Institute (Note: the DC stands for “Distribution Centre” not “Direct Current”)
There’s been a lot of chatter about community batteries recently – here’s a brief overview of what they are, how they work and some of their benefits.
Home battery storage is still costly and likely will still be for some time. An alternative is the community battery concept, which can provide cheaper access to energy storage while providing many benefits – including to non-solar owners.
What Is A Community Battery?
A community battery is essentially a large shared battery installed in a neighbourhood enabling local solar power system owners to virtually store their surplus electricity for use when their solar panels aren’t meeting household energy demand. A portion of the battery’s capacity may also be set aside for other purposes.
Community batteries have been around for a while. Among the first was a trial by WA’s Western Power/Synergy involving a 420kWh Tesla Powerpack battery system connected to the grid in the Mandurah suburb of Meadow Springs that kicked off in 2018.
Since that initial trial, a bunch more batteries have been installed under the program. Each participating customer is allotted 8kWh of virtual storage at a cost of $1 to $1.90 per day depending on the location. In addition to that cost, the participants also forego the feed-in tariff for whatever they are storing. But assuming sufficient utilisation, it’s still cheaper than buying a battery system. A drawback is a lack of backup power if there’s mains grid supply interruption.
The experience in Western Australia has been pretty positive overall and community batteries are starting to pop up elsewhere across Australia. While already financially viable, costs should continue to decrease and functionality and flexibility will improve as uptake increases to cater to the individual needs of customers. For example, allotted storage may be flexible to meet individual requirements.
Benefits Of Community Batteries
In addition to reducing the cost of storing solar energy, some of the other benefits include:
- Enabling more solar systems to be installed on a network without costly infrastructure upgrades.
- Helping to keep the grid stable by absorbing surplus rooftop PV electricity generation during the day and releasing it during peak times and at night.
- Further reducing emissions.
- Enabling households to potentially participate in the electricity market.
- Providing local apartment residents with access to solar-generated electricity.
- Cutting electricity costs by reducing reliance on fossil fuels during periods of peak energy demand when electricity prices are at their highest.
More detail on community batteries can be found in a recently released report from the McKell Institute, including recommendations on how government and regulators can support their uptake.
“Batteries are a big part of reducing electricity prices as Australia becomes a renewable energy superpower,” it states.
The Institute is an independent body dedicated to providing practical and innovative solutions to contemporary policy challenges.
About Michael Bloch
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Front of meter batteries are not of much use, when the grid supply fails, as happened on Saturday night, when the local area had a grid supply failure – the SWIS grid has difficulty coping with almost everything, especially, when it went down for about an hour, due to the 0200 switch back of clocks for the summer time time shift.
If we lose our grid connection, due to the bodgy SWIS grid, then, what use are community batteries?
About as much use as the electric cars that are available to common people in most countries other than Australia.
We need the government to supply us with free behind the meter batteries, to cope with the grid failures.
You might like to add the following benefits:
– uses less materials for a large single battery rather than many individual installs
– diversity of household loads (i.e. on any given day, some households will be away etc.) means the total battery size can be smaller i.e. 100 homes wanting 8kWh of storage will only need a community battery of say 500kWh to serve their needs, not 800kWh…hence a more efficient use of resources
Hi,
Community Batteries sound great. To make it even better they should be able to supply the community (choose your own definition of a community, could be a suburb) with power during mains failure (for a reasonable time), allow people to receive a decent FiT (more than now, but less than what it will cost others to buy), and that power can be sold to others in the community for less than a retail provider.
You’re gunna need a bigger battery!
I think I’ll be keeping my existing battery for the near future.
dRdoS7
Can you expand on these claimed benefits:
– Further reducing emissions.
– Cutting electricity costs by reducing reliance on fossil fuels during periods of peak energy demand when electricity prices are at their highest.
I’m struggling to see how a battery reduces emissions, unless it is fed energy that otherwise could not be exported (which I doubt since it has to be exported from a home to get to the battery, even if the export is “virtual”), or is on a grid with little to no daytime fossil fuel electricity generation but requires FF in the evening (IOW Sth Australia only). All a battery does is shift the time of day fossil fuel offsets occur. And because it loses energy between charging and discharging, it’s a net consumer of energy and results in more emissions.
How does it reduce electricity costs? At the moment I buy energy for less than 25c/kWh (pretty common in most on the NEM). The daily access costs alone mean it’s more expensive than simply buying from the grid. Then add lost FIT on top of that. People might say “yeah but TOU peak rates!”. Well it’s about 2 weeks since you published an item saying no one with solar PV has to be on TOU.
And on that latter point, the reason prices are higher in peak times in not because it’s fossil fuel generation, but rather because demand is high and supply is constrained. It’s misleading to blame generators which are able to operate when others are not.
Community batteries are like the NBN. They sound like a great idea at first until you delve into the details, where it becomes apparent that the ecomomics of them does not look so good, and they just wind up becoming another expensive subsidy.
Taking Anthony Albanese’s latest announcement as an example, the plan is to deploy 400 x 500 KW/h batteries in various locations, at at cost of $500K each. So we are back to $1000 per KW/h cost. If we use a very, very optimistic lifespan of 5000 charge/discharge cycles then we need an arbitrage rate of 20c per KW/h just to recover the cost of the battery. So we need to make some hard decisions….
1 Do we expect to recover the costs of these batteries, if not, why not?
2 Do we still expect to support solar feed in tarriffs that exceed the spot wholesale electricity price?
3 Do we have an expectation that these will lead to lower retail prices?
Based on current (announced) battery pricing, and typical NSW tarriffs (9.5c FIT, 24C retail single rate), it is not possible to answer yes to all three questions 1, 2 and 3. The way I see it, the costs of these community batteries will need to be written off, and it just becomes another example of solar haves (in this case those connected to a CB) benefitting from yet more government largess at the expense of the solar have nots..
So what’s it going to be? Yet another government built white elephant?