Early days for community batteries

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Example of a community battery in Western Australia

One of the election promises the new Labor Government must keep is the rollout of 400 community batteries to help store rooftop solar energy – it is a step in the right direction but there are quite a few practical challenges that will need to be overcome first.

Federal Labor’s Chris Bowen traversed the country during the 2022 election campaign in his role as Shadow Minister for Climate, to announce 400 towns would receive “community batteries”. At the Narara announcement on the NSW Central Coast, Bowen started the sales pitch with cost of living.

“Everybody knows that everything is going up except for your wages and another thing that is going up is power bills,” Bowen says.

“One way we can reduce people’s power bills is to enable them to better store renewable energy. Here in Narara there are 4745 houses with solar panels on their rooves but less than 100 of those houses have a battery at home,” he said.

It is well known that, at present, household batteries are expensive and not very effective.

According to Chris Bowen, a community battery “would enable those people with solar panels on their roof to store their energy in the community battery, to store it during the day when they are at work and school and to feed off it at night. It reduces power bills. It reduces emissions.

“It’s good for the economy. It is good for the environment. It’s a win-win.

“It is part of our community battery program we are rolling out across the country.”

According to Bowen, a community battery is about the size of a car so it can go somewhere in a park or a public space. It is run by the network operator, by the energy companies.

“People in the local area are invited to participate. They can sign up. They pay a couple of dollars a week to participate. They just feed in. Instead of their renewable energy just feeding into the grid and being paid a small amount by the energy providers, it gets fed in, it gets noted what they are feeding in, the battery stores the energy and then they use the energy. They feed off it at night and then of course when the battery runs out, if it runs out, they go back onto the grid.

“Even if you don’t have solar panels on your roof there is still a capacity to participate. You just don’t feed in. You pay a couple of dollars extra and you can access some of the energy at night.

“Some people are renters and the landlord won’t let you put solar panels on and some people simply can’t afford it and some people just live in a shady street and the solar panels just can’t be made to work. The good thing about a community battery is it works in a number of ways in different communities, fit for the purpose for the issues of that community.”

Labor’s commitment, which it must now deliver as government, was $200 million or $500,000 per battery.

Locations were chosen based on high solar uptake but low battery penetration.

Jo Muller of Climate Future, who formerly headed a Community Energy Association, has the following take on the new Labor Government’s commitment to community batteries: “They are certainly one or two steps in the right direction potentially providing mutual benefits to all stakeholders and to the deployment of domestic solar PV systems but it is early days and there are many unknowns.”

There are currently three ways to store renewable energy, according to Muller – household battery, large-scale battery and the community-scale battery.

Large-scale batteries are now popping up everywhere, Muller says.

“They are there to compensate for the fluctuations in the grid on a large scale and overcome the problem that some houses can’t export solar at some times because the network cannot cope with it.

“In the case of many solar installations in one location on the grid there can be two technical issues. The first is that too much energy gets back into the grid which can raise the local voltage above an acceptable level. About 100 to 200 houses are connected to the same transformer reducing the higher voltage from the supply grid to the voltage used in homes (240V) – it is a bit more complicated but no need to go further here.”

“This can result in two consequences. Solar inverters have inbuilt settings which turn them off when the voltage is too high. These households will produce less solar energy.

“A cheap fix would be to change the transformer settings (done by the grid operator on request by customers). If that is not sufficient, the households will keep losing solar production and possibly the next point could come into play.

“New solar systems can be capped to a certain size or not allowed at all or the output of solar systems can be limited by a special switch. Overcoming these hurdles is what is called ‘more access to solar’ or so.

“If the voltage is not sufficiently regulated there can be more severe consequences like failing household equipment or transformer failures in the power supply grid. In some remote areas the wires are too ‘thin’ and cannot carry the load if all users are using their maximum amount of energy at the same time.

“The large batteries of several hundred MW are too far away to be able to deal with this problem.

“However, mid-size batteries of around 500kWh each can buffer the electrical power for all houses connected to the same grid transformer. During the day excess electrical power is stored and released as needed in the evening and night.

“Some call such batteries ‘Community Batteries’ but in most models there is no opportunity for the community to either own or control the battery or just to engage so this name is overhyped and it would be better to use the name that is used in Victoria: Neighbourhood scale batteries (also called community scale batteries).

The documentation from the Victorian government (https://engage.vic.gov.au/victorian-neighbourhood-battery-initiative-consultation) offers the following description:

“… Neighbourhood scale batteries (also called community scale batteries) are a type of energy storage model that can provide multiple benefits to consumers, communities and the electricity system. Neighbourhood scale batteries are bigger than household solar batteries, ranging in power capacity from approximately 100 kilowatts (kW) to five megawatts (MW). Neighbourhood scale batteries are connected ‘in front of the meter’ to the electricity distribution network, rather than ‘behind the meter’ in a household or business premises. They would typically be located at street level in proximity to where electricity is being both consumed by homes and generated from rooftop solar….”

According to Jo Mulller, community scale batteries are certainly cheaper (economy of scale) and easier to install (one site instead of more than 100 sites) and to service than individual batteries at homes.

“There are so many parameters. Who owns the battery? How is the export to and the import from the battery measured? What happens with the solar feed in tariff? In regard of the Labor plans: If a grant of $500,000 is given per battery, who is actually getting the grant and becomes the owner of the battery?

“As a customer I pay the generators and the grid operator for their hardware services of producing and transporting the electrical energy to me so where is ‘community’ in community batteries?

“Community battery is a bad name because it implies the community is involved in some way and I am not sure the community will be involved,” he said. “In Victoria it is called a community-scale battery.”

Muller argues that household batteries are not efficient because “on some days you produce more than your battery can hold and on other days you have nothing to charge the battery with so your battery and your use don’t match.

“One battery for a couple of hundred houses is cheaper because of economy of scale,” he says. That’s the upside but it comes with a ‘but’.

“Victoria did a consultation and there are so many questions in this. Who owns the battery is not defined at the moment. Is it a council? Is it an operator?

How can you benefit from it?

Energy retailers will need to sign up to the new government’s program and it is not clear whether they will have to compete or tender, and one operator will win the business.

“The grid operator would charge for the transport of electricity twice, from my house to the battery and then from the battery to my house, these charges are high because they are a flat rate, they don’t consider the distance.

“They call it a wheeling charge. Imagine a wheelbarrow carrying electricity from one location to another. Those houses a short distance from the community battery will end up subsidizing the big guys pushing power from Queensland.

“Will the user have to pay the wheeling charge twice to the grid operator when charging and discharging the battery?

“The grid operator has many benefits from a ‘community battery’ including: wheeling charges; they can sell the stored energy to the highest bidder and provide the customer with cheap energy from the grid; they can profit from other ‘sellable’ benefits of a battery like grid stabilisation, frequency stabilisation, grid protection, overvoltage protection but can we trust the grid operator to pass some of this on to the customer?

“Our rules need to change. Even in Victoria where they have made some more progress, they made it to a consultation paper. They are only collecting information from industry and consumers about what they want.”

“I think there should be batteries of mid-size but we as a community shouldn’t be bothered about it. I pay for electricity coming through the poles and wires, so a battery for me as a consumer is in no way different from poles and wires. If they have $200 million to spend, they could think about a method to incentivise the grid operator to build these things. To bring in the word community implies influence but if you are down to a single user it is not community.

“I think doing this is a step in the right direction but the thing is nothing is sorted out yet and I see this as still like a pilot program.”

Jo Muller doesn’t think the price of batteries is going to come down, at least not in the short-term.

“Electric cars will suck up all the lithium available because there will be more and more demand and more demand mean higher prices not lower prices.

“How about I have an electric car and it becomes my [household] battery?” Jo proposes.

At the moment only two brands allow that and you need a “kind of inverter” between your car and house.

“That is $10,000 but it should fall in price to maybe $2000 but I would say that is a transient situation at the moment.”

Privatisation a problem

“Another problem with our electricity market is that everything got privatised, so now we have this funny situation where the retailers do nothing but meter what you use and send out the bill which costs about 30 per cent of your electricity costs, which is such a nonsense,” Muller says.

“From the view of the community it is a waste because if this work was done by a monopoly organisation they could do it more efficiently and at a lower price,” he says.

According to Muller, Labor also plans to build solar farms, which they call solar banks but they don’t appear to have connected this promise with their community batteries proposal.

“They could in theory be connected but they are not,” he says.

“You have to start somewhere so I hope they will go back and use the Victorian experience because they are a bit further along with their community engagement. There is not a succinct answer. It is complicated because our electricity systems and regulations are very complicated.”

Ausgrid model

Ausgrid is already working on its own community battery program but, again, there’s not much ‘community’ in its program.

“It solves the question about retailers elegantly because the retailers are not involved!

So Ausgrid is dealing with each customer individually. Does that make Ausgrid a retailer?” questions Muller.

In regard to the Ausgrid proposal, Muller also wants to know why it only allow 10kWh per day for storage

“Some solar feed-in tariffs allow for more. Why can I only use it back, and not sell it to somebody else in the local network?

“It appears that Ausgrid, the battery owner, can do with the stored energy whatever they want. So how is this different to just a solar feed-in tariff?

“What is the cost and income for the consumer? Is it overall better than the solar feed in tariff?

“If Ausgrid can do it without $500,000 per battery from the government, would Labor’s $200 million not better be used to improve something else?

“Ausgrid is providing a new service and the customer can use it or not. The user would actually not know what is happening with ‘her/his’ energy. It is not even possible to know if there is a battery or not because most could be solved by the grid operator in other ways.”

What you can do

1. If we are going to reduce dependence on fossil fuels, as many households as possible need to switch to solar so learn all you can about the costs and advantages of installing solar PV on your home.

2. Once those solar panels are installed it becomes critically obvious how much electricity you use. You pay closer attention to the tariffs for different time periods and you earnestly re-arrange how you use energy – using your most power-guzzling appliances such as dish washes and washing machines when the sun is shining, for example. Energy waste becomes obvious and you realise that the key to reducing costs is to reduce use and be smarter with what electricity you use and when.

3. Learn all you can about mid-size batteries and take an active interest in the rollout of the Labor scheme and any others that pop up.

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