Ausgrid hopes its trial of community batteries in and near Sydney will be a first step in a major rollout of shared storage.

The country’s most energy-hungry state needs to catch up. Black coal fuelled nearly 72% of generation in NSW in the past year and only Queensland has lower penetration of renewables, going on CEC data for 2019. At the start of 2020 there were more rooftop PV systems under 100kW in Queensland than in NSW.

In anticipation of rising demand for solar and vehicle-charging connections among its 1.8 million customers, the Ausgrid network – which covers much of Sydney and the NSW Central Coast and Hunter Valley – is testing the efficacy of community batteries. Ausgrid chief customer officer Rob Amphlett Lewis explains the strategy to EcoGeneration.

Rob Amphlett Lewis says a system of well-distributed storage assets can create value for all consumers in parts of networks where solar penetration is high.

What are the problems you are trying to solve with community batteries?

The problem is decarbonisation, to be honest, and how can an electricity network support the endeavours of society to decarbonise its energy system and become cleaner and greener. One of the ways we can do that is by providing a community battery service. That provides three really valuable services to the community, customers and the whole energy system: it provides cheaper energy to the end customer, as they get to consume their own solar; we get to defer network investment because we can manage those really short periods in which the network is constrained; and we get to manage voltage and power quality issues, sometimes associated with very high levels of solar.

If you look at the community battery as a suite of connected batteries, those batteries can then bid into the FCAS markets, the power arbitrage markets and all of those value streams a battery can access. So, there are three targets: the customer, the network and the system. The battery can provide value to all three.

You haven’t partnered with a retailer yet but can you explain how customers with solar will interact with the battery?

We are not charging the customer anything; we are effectively running this as a net benefit to the [solar-owning] customer. If the customer was going to rent this from us for, say, $500 a year, and he saves $800 a year, he’s $300 a year better off. We won’t have a situation where we are charging the customer for the service, and that’s a way we can get around the [Australian Energy Regulator’s] ring-fencing process.

If this trial was never going to use a retailer, we would need a market participant to access FCAS and wholesale markets. But we don’t need a retailer to provide the service to the end customer.

That’s the benefit of networks providing this service; you can have a rental space within a community battery and you can switch your retailer without having to have a new contract with a different retailer.

How did you choose the three locations for the trial?

There is a confluence of a few different things: one, high solar penetration; two, interest from customers signing up to the community battery trial, and; three, a council that was supportive and innovative. The solar penetration at the Beacon Hill site [where the first unit is installed] is about 25%. [Batteries will also be deployed in Lake Macquarie and the Canterbury Bankstown areas.]

Do you have any thoughts on what would be a saturation level for solar?

It’s an interesting question but it really depends on the network characteristics. There is no one simple answer. In an area with high solar penetration, when you get to minimum load you can have power quality and voltage issues. I know in parts of Queensland and South Australia penetration levels around 40% are creating problems. We don’t have a lot of those issues in our grid. We’re trying to set ourselves up for the arrival of electric vehicles and ensure we have the solutions before we get to those levels of penetration.

How do you choose a battery?

It’s a combination of a number of variables: how big do you want the physical battery to be, how long do you want it to operate for, how long are you going to need it to support the network and how many customers are likely to use it. We’ve got a 256kWh unit and a 450kWh one and that’s set by the number of customers that are expected to sign up.

What are your thoughts on residential storage?

For us, we think sharing is always so much better. Residential storage is fairly high-cost. You don’t have the scale benefits or the diversity benefits that come from sharing. We feel shared community batteries offer a much better economic outcome and can really support decarbonisation in a much broader sense than just an individual home battery.

Tesla has recently put its battery costs up; we think there is going to be a large drive for EVs globally, which is likely to put upward pressure on batteries. That just makes it more important to do things as efficiently as you can. In that case, it’s generally better to share assets and share infrastructure.

What happens in the middle of a hot day if it’s more profitable to discharge than charge with solar exports?

The battery will operate to make sure the network is stable; that’s our primary concern. The beautiful thing about the virtual battery is that if that solar energy gets used to prevent a problem occurring for the community, when an individual draws down from the battery – and the battery hasn’t got spare capacity – they’ll be charged as if they had drawn their own power from the battery.

Where there is surplus, and the battery is discharged, the individual will draw down from the grid and be charged as if they were drawing from the battery. It’s that characteristic that makes it cheaper than owning your own battery. The customer will have the financial experience of owning her own battery, but the battery she is contributing to will perform the best outcome for the local community.

Flexibility in the network is the most important characteristic that will help us decarbonise. We think this has a huge role in providing flexibility of demand supply into the grid at a low cost.

If the trial goes well, how many community batteries would you expect to deploy around Sydney?

The NSW Electricity Infrastructure Roadmap calls for 2GW of storage by 2030, and we could provide 400MW of batteries through this model – effectively 20% of the batteries required by the state. That would mean 2,000 or 3,000 [of Ausgrid or similar-sized community batteries] across the state.

Lastly, what’s the benefit for anyone who doesn’t own solar?

Batteries will allow us to avoid further network upgrades, they will provide power quality support within a community and they act as a lung that can breathe in surplus renewable energy from anywhere in the state and breathe out when it’s needed. That reduces the cost of the network and reduces the cost of firming renewables – and that benefits everyone. It’s downward pressure on the full system cost of transitioning to a decarbonised economy.