They may not boast the impressive size of “big batteries” but a growing trend in the energy storage space is being hailed as a game changer for communities and “petrifying” for power companies.
- Mid-sized battery systems are growing in popularity in communities and housing developments
- Manufacturers are opening factories to start making them
- Experts say they are a game changer but there are logistical barriers
Battery manufacturers across Australia are pushing into the production of mid-sized batteries for remote towns, schools, retailers, and even greenfield housing developments.
But they are expensive and experts say the logistics are fraught.
A tiny country town has just received a 274-kilowatt-hour battery with help from government grants.
Ben McGowan is one of the Yackandandah locals who helped bring the storage system affectionately known as “Yak01” to the Victorian community of just 1,800 people.
“When it first came in, I was actually very nervous as it is four tonne and I’ve never craned a battery from a truck,” he said.
Yack01’s new home is inside an old sawmill on the edge of town.
Solar panels on the sawmill’s roof will soon be connected to the battery to supply it with renewable energy when the sun is shining.
The battery’s stored solar energy will then be sent out to about 40 homes around the town to use at any time of day or night.
That is happening through a trial led by Indigo Power, an energy company that Mr McGowan helped set up to power his local community with clean energy.
Battery a ‘game changer’ for Yackandandah
It may only be the size of a 4WD but the battery is a big deal for the small town.
A group of Yackandandah locals are on a mission to have the entire town powered by renewable energy.
And they are charging ahead.
The town’s medical centre, supermarket and even fire station now have solar systems and batteries, along with many households.
Totally Renewable Yackandandah president Juliette Milbank said Yack01 was “the start of the final part of our push towards 100 per cent renewable”.
“We’re incredibly excited. It’s the culmination of quite a lot of work,” she said.
As well as turning on the lights for locals, the battery will also give Yackandandah a backup power supply. That is a big concern for a rural town on the edge of the power grid.
“If the main electricity line does go down, we can still keep running essential services for a period of time. So it’s about reliability, it’s about resilience,” Ms Milbank said.
“It’s also about renewable energy, reducing carbon emissions and saving money on electricity costs.
Developers and schools investing too
It is not just Yackandandah pushing into so-called “community batteries”.
Network provider Ausgrid has also just installed two 267kWh batteries around Sydney and is set to announce a third site in coming weeks.
Its trial is hoping to get solar households around several suburbs supplying power to the batteries, so that those connected can share it during low-generation times.
As a network provider, Ausgrid traditionally supplies the poles and wires that households use to transmit electricity from the grid, so installing batteries is a new area for the company.
Ausgrid’s Rob Amphlett Lewis said in a media announcement for its Bankstown launch that it has even been receiving interest from homeowners who don’t currently have solar but want to install it so they can participate.
“We’re confident our community battery project will transform the way solar energy is stored, reduce resident’s hip pocket costs, reduce peak demand and support the use of renewable energy,” he said.
In Fremantle, energy trading company Power Ledger is also working on a housing development with a communal 670kWh battery.
The 36 homes that it is building will each have solar on their rooftops to send power to this storage system.
“There’ll be supplying their own electricity from those solar panels during the day and trading with each other via the battery when the sun is not shining,” Power Ledger’s Jemma Green said.
Dr Green said the so-called “micro-grid” system was made possible using strata law, which traditionally is what apartment blocks and units use to manage their buildings.
Traditionally, rooftop solar and small battery storage has been taken up by individual homes that have control over their own infrastructure.
Dr Green is hopeful their concept can show how solar and battery storage can be made available to more people who live in apartments or units.
“This next wave of deployment of renewables is focused on shared housing developments,” she said.
It could also cut down costs for the developers because the greenfields development site will have lower overheads on connecting the homes to the grid.
“Property developers might have to upgrade a substation or a transformer to put like 100 new homes on that,” she said.
“But if you put an onsite battery, it may reduce the draw on the grid and avoid those costly upgrades that the developer would have to pay for.”
At least two Australian companies are pushing into the space.
A factory in Melbourne owned by EVO Power is about to start making them and hopes to sell 200 this year.
A factory in regional NSW owned by Energy Renaissance is also in the works and it hopes to get into the market.
“Residentially, I think we’re going to see more and more shared batteries and apartments and community clusters or houses,” Energy Renaissance director Brian Craighead said.
“And that’s where it’s going to go in the truly residential space.”
Network providers are ‘petrified’ about this trend
Victoria University energy economist and the director of the Victoria Energy Policy Centre, Bruce Mountain, believes communities are picking up these batteries because of their desire to be self-sufficient.
“These batteries tap into a trend in local groups of people for environmentally driven solutions,” he said.
“They like to grow their own vegetables, and they like to share their vegetables amongst themselves. And they see electricity in much the same way.”
He believes the batteries could be a big disruptor in a market dominated by network providers who manage large-scale grids and energy companies who sell power from large-scale generators like coal-fired power stations.
“If it’s taken up, it will lead to the fragmentation of the electricity system,” he said.
“Ausgrid’s battery trials are an excellent case in point. They want the batteries to be on the network so that their network continues to ship electricity.
“Even if it’s not shipping it from a large generator far away. It’s shipping it from customers who have their own sources of power. As long as there’s that shipping transaction to and from the customer, they still have a role.”
However, there are a lot of logistical hurdles standing in the way of both communities and network providers trying to get into the space.
At the big end of town, Ausgrid’s trial is seeing it challenge electricity providers, who traditionally take on the role of supplying power.
“The energy retailers see themselves as the agents who should be in this business,” Professor Mountain said.
And at the smaller scale, it requires great investment and it still can’t be done alone without the involvement of an electricity provider.
Indigo Power’s Ben McGowan said Yack01 is not initially being set up for local solar homes to store power on too, because that requires “complicated” wrangling.
“There’s more parties involved. You have the grid operator involved, you have the customers involved with the in and the out, so you have to set up that relationship,” he said.
Logistics aside, the batteries are also expensive
Lots of the price decreases in the storage space have been at the top end of town with the “big batteries” increasingly being invested in by state governments and energy providers.
Yackandandah’s battery cost $200,000 plus the same all over again to bring to town, and this was only possible with government grants.
“The business model really is only just emerging,” Mr McGowan said.
Bruce Mountain doesn’t believe the market for the batteries will really take off until they halve in cost. Most manufacturers are only estimating a 10 per cent decline in prices at best this year.
Some in the battery space are pushing a dual role for the batteries to help drive down costs.
GEM Energy is a battery company that has supplied mid-sized battery storage systems to schools in regional Queensland and has just connected them to the so-called FCAS and ancillary services markets.
This is another complicated area. It involves using a battery to help stabilise the physics of the grid when it needs a fast injection of energy or a fast reduction.
“You send the power to the grid when energy prices are high and the grid needs extra stability,” GEM Energy’s Jack Hooper said.
“So we access our clients’ batteries at those times. It helps the grid but it also allows them to get revenue when needed.
“In order for batteries to be viable, you need to maximise that value stack. That participation in the wholesale market is vital to improving the economics of battery storage.
Power Ledger’s Jemma Green also believes this area is a way to make community batteries viable.
“These are emerging areas and value propositions for batteries that could feed into a reduced payback time on an investment in a battery,” she said.
But energy economist Bruce Mountain is not convinced this will become a huge market for community batteries.
“It’s a very small market, it will be saturated shortly, not by little distributed batteries but by the big batteries. So I’m afraid I don’t think it’s a big source of revenue for the future,” he said.
“We simply need the capital cost of the batteries to decline to around half their levels. And then we’re going to see very rapid uptake.”
If not market revenue, then what?
Totally Renewable Yackandandah’s Juliette Milbank wants more buy-in from government.
“I think there’s a role for the government to help with the commerciality of batteries in these initial stages. Certainly, a role for further research into the way batteries can be incorporated into the network.”
In a sign of the emerging interest in this space, just a few months ago Federal Labor made a $200 million election pledge to erect community batteries around Australia.
The Federal Government is also spending $480 million on battery storage but much of it is going to the “big batteries” that have been grabbing headlines until now.
Through ARENA, it is also giving $50 million for the deployment of micro-grids to remote and regional communities, including the Daintree in Queensland and some remote Indigenous communities.
The federal government said it also provided almost $350,000 towards Yackandandah’s microgrid project and its new battery through its Regional and Remote Communities Reliability Fund. The Victorian Government also contributed.
Yackandandah’s federal representative, independent member for Indi Helen Haines, wants more money spent in this area.
“I think that the federal government in particular have not put enough focus on energy storage,” Ms Haines said.
“There’s been a lot of discussion about technology. But the technology right now is telling us that renewables are the cheapest form of energy. The part of the puzzle that hasn’t been invested in sufficiently is storage.”