Battery Storage Trial Shows Benefits To Both Consumers & Networks

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Originally published on RenewEconomy.
By Sophie Vorrath

The first completed battery storage trial by an Australian network operator has shown that the combined benefits of battery storage nearly match the costs of technology, and should exceed them as battery storage costs continue to fall.

AusNet Services’ three-year battery storage trial, the results of which were released on Thursday, tested a range of ways to use residential batteries, including exporting electricity into the grid at peak demand times, that might delay or offset costly network investment.

The trial tested battery systems using five different ways of providing demand management, including varying the source of battery charging (off peak grid electricity or solar) and varying the balance between targeting customer benefits or network benefits.

It also explored the potential of residential batteries to flatten customer demand profiles – and thus reduce electricity bills; to manage the peaks in network demand; and improve the integration of residential solar power into the network.

The trial found that a typical residential customer with solar panels could save $1,500 over five years by adding a battery storage system, and $3,500 over the lifetime of the system. Those benefits could increase by one third if customers took up flexible pricing tariffs.

The potential benefit for a network from the same system – depending on its location – could be double that amount, at $3,000 over five years. That mostly comes from avoided network spending, but this value could increase by 10 per cent if load levelling was also included.

“Combining the maximum customer benefits of $3,500 over first five years with the potential network peak demand benefits of $3,300 yields a combined present benefit of $6,800,” the report says.

“This falls some way short of the 2018 forecast total cost of $10,700. However, the shortfall could feasibly be made up through either non-financial customer benefits, benefits that vest with other parties such as energy retailers, or further technology cost reductions over a period of around 5 years.”

There are also non-financial customer benefits , such as increased energy independence and backup power supply provision. The value to customers of these benefits may be significant, but is not yet known with sufficient certainty to include in an analysis, the report said.

“The findings show that network businesses have real incentives to support the take-up of this new technology,” said AusNet spokesman Alistair Parker. “There are an estimated 1.4 million solar systems in Australia that, if paired with residential battery systems, could revolutionise the role these customer assets play at the macro-grid level.

But Parker stressed that while the benefits for both consumers and networks looked to be substantial, facilitating the smooth, fair and efficient take-up of battery storage remained a “massive challenge” for industry and policy makers.

“Network businesses must understand how to integrate these technologies into the existing grid before they penetrate the mass market, causing massive network disruption. It’s only early days, but this trial is a milestone along that path,” he said.

On battery system costs, the trial found that these were “still generally uneconomic” at this time, even factoring in customer and network benefits.

But the rapid evolution of the technology meant that it was likely to become economic in the “near future,” either through the development of business models that unlock additional value, or through continuing technology cost reduction.

Reprinted with permission.

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3 thoughts on “Battery Storage Trial Shows Benefits To Both Consumers & Networks

  • Wasn’t there an article on Cleantechnica recently about one of the players in solar in Austria adding battery to there options for little to no cost? I could be remembering that wrong.

  • It’s only uneconomic if your horizon is five years as stated in the article. Fact is, the report basically says that battery systems can provide a 12% ROI, which is fantastic. Getting to the policy environment and business model that will enable that ROI to be realised is definitely an issue though.

    It’s also important to keep in mind that the networks operate on a cost-plus, non-competitive basis so “avoided network spending” hurts their profits. It’s very likely that this report was doctored to down-play the benefits of battery storage.

    • Exactly. About half of the cost benefit is to the utility, but they have no incentive to implement any efficiency improvements, because they’re paid according to how much they spend on building the network.
      Clearly, the current system needs to change.

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