Saturday, August 01, 2015 5:44:54 AM
b]How battery-powered homes are unplugging Australia
Date August 1, 2015 - 12:09AM
http://www.brisbanetimes.com.au/business/energy/how-batterypowered-homes-are-unplugging-australia-20150731-giogk2.html
Lithium-ion batteries have been on offer to Australian homes and businesses for the last year or so.
A brief history of the battery
When Jane Whiltsher used to open her power bill it grated.
"I always felt that I was being ripped off," she says.
The implications from a large re-engineering of the nation's power supply, if that happens, are everywhere.
"It's just the way they operate. It keeps going up and up."
Two months after having a rooftop solar and battery system installed, it's a different story.
Whiltsher's bill has more than halved. She enjoys the novelty of watching her "new toy" transforming the flow of energy around her house, leaving her largely independent of the wires outside.
The battery set-up of Jane Whiltsher. Photo: Bradley Kanaris
At approaching $40,000, it hasn't been a cheap investment. But that's not the point.
"As far as I am concerned if it takes me off the grid then it's paid for itself already," she says.
Whiltsher's enthusiasm to invest hard-earned cash for a home power system that may take as long as 12 years to pay for itself is being echoed around the country as Australians race to install batteries.
Ian Smith was looking for a way to cut his power costs. Photo: Glenn Hunt
While the much-hyped Powerwall home battery system from Californian electric car pioneer Tesla Motors won't be available locally until 2016, lithium-ion batteries have been on offer to Australian homes and businesses for the last year or so.
High-tech, adaptable and controllable and typically the size of a small fridge, these systems have left clumsy and ugly lead acid batteries far behind.
Less than a week after the soft launch of the sleek Powerwall and larger Powerpack batteries in late April, Tesla was said to have sold out until mid-2016 after about $US800 million of orders for some 55,000 Powerwalls and 25,000 commercial units.
Jane Whiltsher poses with her "new toy" - the battery that powers her home. Photo: Bradley Kanaris
In Australia, the 1.4 million homes with rooftop solar panels are the battleground for battery providers and retailers.
Others, like Whiltsher, are starting from scratch, having batteries and rooftop solar fitted at the same time. Even for homes without solar PV panels, batteries could make economic sense down the track, many say.
Massive growth
Tesla sold out of its battery within a week.
Certainly that's what experts predict. The International Renewable Energy Agency predicts the global market for battery storage will grow from $US220 million ($302 million) in 2014 to $US18 billion by 2023.
Ivor Frischknecht, chief executive of Australian Renewable Energy Agency, calls it an "energy revolution".
"If batteries are cheap enough this value proposition will ensure that most homes have solar and storage within a few years," he says.
With the world's highest uptake of residential solar per capita, Australian demand for batteries that allow households to better match up the power generated from their rooftop panels with when they want to use it is primed to take off.
The implications from a large re-engineering of the nation's power supply, if that happens, are everywhere one looks from housing design to streetscapes without powerlines and the electricity grid and its power stations to rent in office buildings.
Morgan Stanley estimates that 2.4 million east coast homes will have batteries installed within the next few years. That has real implications for retailers such as AGL Energy and Origin Energy.
Those retailers are in turn making sure they are in on the action. AGL has started offering suitcase-sized batteries with a 6 kilowatt-hour lithium-ion system, storing enough to power a home for a few hours.
Origin is set to introduce its battery offer within weeks, while Snowy Hydro's Red Energy retail business is trialling a Panasonic battery.
"We felt there was such a market in the 1.4 million that have solar that you can't turn away from it," says Snowy chief executive Paul Broad.
"Our customers have clearly said they are into the whole renewable alternative energy source, so we will respond."
ActewAGL managing director Michael Costello puts it more bluntly: "It's what our customers want, and if we don't supply, they'll ask another retailer."
Supply is coming
Lithium-ion batteries from maker such as China's Tianjin Lishen are already available in Australia, while consumer electronics giant LG Chem is also targeting Australia, as are California's Enphase Energy and the Warren Buffett-backed BYD, also based in China.
Luring them here is the popularity of rooftop solar, which has created a huge market for storage systems that can soak up the excess power generated by solar PV panels during the day, which otherwise has to be fed back into the grid at little financial gain to homeowners.
Instead of having to draw on peak-tariff electricity from the grid in the evenings, a household can then use stored energy, saving money and helping prevent the grid from overloading. Batteries also provide back-up power for computers, lighting and life-support systems that have to stay on during power cuts.
Households could in theory even move into energy trading, based on power from their battery storage system.
John Grimes of the Energy Storage Council describes storage as "the missing link" and expects strong demand among those with rooftop solar, partly driven by the slashing of the tariffs paid by state governments for electricity fed back into the grid.
"Feed-in tariffs for solar PV around the country have really been cut to a punitive level so many people are now receiving 6¢ or 8¢ per kilowatt hour for the energy that they feed into the grid and are having to buy energy back at the full retail rate of 25 to 28¢ per kilowatt hour," Grimes says.
With batteries such as Panasonic's able to be controlled remotely by a utility company, suppliers and network owners also benefit from being able to match energy demand more closely with supply.
Large thermal power stations then need to be ramped up and down less frequently, while bottlenecks on the grid can be relieved. For intermittent renewable sources, whether solar or wind, storage allows more renewable power to be used.
"In a world envisaged to be entirely solar and wind, you'd better have batteries otherwise you'll be spending a lot of time in the dark," says Origin chief executive Grant King.
"[But] I believe there are other fuels such as hydro and nuclear, for example, that should be in that mix and they don't need batteries. Hydro is a battery."
Not cheap, yet
But while costs have already plunged for solar and are reducing for storage, the economics are far from compelling, particularly for those wanting to move largely or entirely off the grid.
A Powerwall or equivalent battery is expected to cost $7000-$10,000 including an inverter to convert direct current to alternating current, control system and installation costs. But one 7 kilowatt-hour Powerwall on its own would do little to reduce reliance on the grid, requiring several units to be installed.
Grattan Institute puts the cost of taking a home 95 per cent off the grid at $37,000, for a 7 kilowatt solar system plus 35kWh of storage. But that surges to $72,000 if the same house cannot rely on a centralised network for back-up and goes off grid altogether, requiring a much larger 15kW solar system plus 85kWh of storage.
Panasonic hasn't disclosed how much it will charge for its battery, which can produce 2kW of power for four hours and which the company says could double a household's "self-consumption" rate from rooftop panels – the proportion of a home's energy use that it generates itself – to 60 per cent from 30 per cent.
Panasonic Australia head Paul Reid says it will be "competitive" with similar products but acknowledges that initially prices will be "somewhat high" as they will be for any battery system, but come down over time.
Still, Reid reckons the take-up will be faster than many are predicting, even as King, Broad and others predict only limited adoption in the first few years until prices fall.
"It's important to realise that consumers make purchasing decisions for lots of different reasons; very rational economic considerations are one reason but it's not the only reason. We shouldn't only look at financial economic payback periods as the only determination of potential take-up."
Still, economics are still a driver for many of the households that have chosen to sign up so far, suppliers say.
Cost motivates
"For 90 per cent of our customers their first priority is the reduction in the cost of living or the stabilisation of costs, plus a reliable power source," says Darrell Wilson at Off Grid Power Solutions in Brisbane, which supplied Whiltsher's system.
"If they are helping the environment as a result that's great but it's not their first consideration."
Grimes says many are being motivated by the low prices they get for selling excess power from their panels back into the grid.
"People really hate the idea that they are really donating that energy to the bottom line of the utilities, because that energy is just sold next door and goes through your neighbour's meter at the full rate," he says.
Grimes says the trend will be reinforced at the end of 2016 when generous feed-in tariffs in NSW come to an end, falling from 60¢ or 44¢ a kilowatt hour to just 4¢ for some 130,000 homes.
"Those people who do more than cover their own base needs, who export to the grid and have probably been getting over-generous tariffs, will be looking for a solution."
Other consumers just feel disempowered when it comes to energy supply and want to take control after suffering a spiralling in prices in the past several years.
"For me it was a thing of trying to cut the bills and also probably just a way to keep my hand on my own destiny," says Ian Smith, who spent about $28,000 in July to have a 6kW solar and 10kWh battery installed in the garage of its home in Banjo near Brisbane airport.
Smith says he missed the boat on the "huge" solar rebates on offer a few years ago and was keen to cut his typical $900 quarterly bill in summer to power three airconditioning units and "two kids living in bedrooms about 20 hours a day".
"I was thinking about if I get solar now it's only good during the day and all my power [use] is at night," he says.
On the day Smith spoke to BusinessDay, his home had generated 22kW of power, and was consuming 13.5kW. The battery got charged back up to 100 per cent at 3pm.
No power had been taken from the grid all day, but some had been returned into the network, for which Smith gets just 4¢/kWh.
Grimes says batteries "give people back a sense of control" over their energy use and costs, posing an issue for suppliers.
"The reality is that energy companies have come to be at the centre of the energy market, but what they have failed to recognise is that consumers are and should be at the centre of the energy market," he says.
Still, retailers are showing they're determined not to get left behind in the way that some were in the rush to solar PV.
"We sat back on the solar PV explosion and this time we have to be cognisant that this is a fundamental change in the market," Red Energy's Ramy Soussou says.
"We at Red have decided we want to play in the market. I think you'll see in particular the big four retailers getting heavily involved."
Suppliers should also benefit from being able to better manage network costs, and potentially allow them to defer or avoid investments in grid bottlenecks.
Illustration: Simon Bosch
"Network storage will allow energy companies to defer or avoid upgrading networks, which ultimately leads to lower energy bills for consumers," Mr Frischknecht said in June.
"I'm confident that retailers and network companies will come to see network storage as something they can also greatly benefit from."
Regulators catching up
Aside from the cost, several other hurdles still have to be overcome however for batteries to realise their potential. Regulations in the ACT, for example, are designed with old-fashioned lead-acid batteries in mind and prohibit the installation of a home battery system indoors, while high installation costs could double the cost for a household.
Uncertainty over how electricity tariffs will be restructured is also a problem. Introducing time-of-use tariffs should help drive battery take-up, but that still leaves the problem of network costs, given networks face a reduction in revenues because of a lower volume of power flowing through their distribution grid but still face high costs from peak demand, which may fall only modestly.
"Batteries only have a certain amount of storage so at night on really hot days when everyone turns on their airconditioning, batteries for the foreseeable future will not meet that demand," Broad says.
Still, it's a problem for the networks given that for all the drive toward self-sufficiency in power supply, few households are likely to move off the grid completely, relying on it for back-up yet potentially drawing little power from it.
Whiltsher is running her Brisbane home "in the high 90s" per cent range in self sufficiency and doesn't expect much change in the summer given she has no airconditioning.
"It's fantastic. I'm really happy with it."
Recent NEWH News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/01/2024 09:00:28 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/22/2024 08:30:33 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/08/2024 08:30:27 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/01/2024 08:30:20 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/24/2024 08:30:09 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/10/2024 08:30:22 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/29/2024 08:30:30 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/27/2024 08:30:39 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/13/2024 09:03:02 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/12/2024 08:30:49 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/30/2024 08:30:13 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/17/2024 08:30:24 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/20/2024 10:05:22 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/04/2024 08:15:29 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/13/2024 08:31:01 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/07/2024 08:30:28 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/05/2024 09:30:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/27/2024 09:30:09 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/13/2024 09:30:24 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/30/2024 09:30:29 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/23/2024 09:30:43 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/16/2024 09:30:29 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/05/2024 09:30:24 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/19/2023 09:30:36 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/07/2023 09:30:21 PM
FEATURED North Bay Resources Announces Assays up to 9.5% Copper at Murex Copper Project, British Columbia • Nov 4, 2024 9:00 AM
Rainmaker Worldwide Inc. to Assume Direct, Non-Dealer Sales of Miranda Water Technologies in U.S. and Mexico in First Quarter of 2025 • RAKR • Nov 4, 2024 8:31 AM
CBD Life Sciences Inc. (CBDL) Launches High-Demand Mushroom Gummy Line for Targeted Wellness Needs, Tapping into a Booming $20 Billion Market • CBDL • Oct 31, 2024 8:00 AM
Nerds On Site Announces Q1 Growth and New Initiatives for the Remainder of 2024 • NOSUF • Oct 31, 2024 7:01 AM
Innovation Beverage Group Receives Largest Shipment of its Top-Selling Bitters to Date in the U.S.-Ready to Meet Growing Demand from Expanding Distribution Network • IBG • Oct 30, 2024 12:22 PM
Element79 Gold Corp to Update Investors on the Emerging Growth Conference on October 31, 2024 • ELMGF • Oct 30, 2024 9:08 AM