Batteries have much to offer to help secure and supply our electricity system. To get maximum bang for our buck, however, we need to think beyond just how many we plug in. Different factors, including when they are used, how big they are and if we can see them, impact the benefits they deliver.

So, how do these characteristics impact the system and customers’ hip pockets?

Our networks need to cater for the peak demand. Smoother, less “peakier” demand makes for a more cost-effective system. Batteries help manage demand but, for now, they’re acting more like sugar hits, shifting demand more than smoothing it.

This is demonstrated in Figure 1, showing data from Powerlink on what typically happens in households with solar plus batteries.

In the morning, when people typically leave for work, demand drops just as supply (sunshine) and subsequent rooftop solar generation increases. Batteries soak up this charge but quickly reach capacity. Once full, they are no longer helping soak up excess energy. All energy from the solar system is now being exported to the grid.

At night, when the sun goes down and people return home, batteries start to discharge and are rapidly depleted.

Figure 1: Impact of battery on household demand – Present Behavior (Source: Powerlink analysis)

Once depleted, energy is again imported from the grid. This switch causes a spike in demand that will generally be met by at-call generation such as gas.

What we want to happen is shown in Figure 2. If in the morning we can get the battery systems to charge more slowly, by partially exporting excess solar and partially charging, we can smooth out this demand. The battery completely charges, but over a longer period.

In the evening, rather than allowing batteries to discharge at their maximum rate, the system could partially import and partially discharge.

Figure 2: Impact of battery on household demand – Desired response (Source: Powerlink analysis)

To implement this, we would need price signals to incentivise customers to export and import at different times of the day. Price signals could financially benefit customers who own battery systems. All customers will benefit from avoiding unnecessary infrastructure spending that would otherwise add to their bills.

Big or small?

In terms of batteries in our electricity system, behind-the-meter batteries and grid-connected larger-scale batteries have different benefits. A small-scale behind-the-meter battery accompanies one in eight roof-top solar PV installations in Australia.

There have also been several trials exploring the potential of aggregating behind-the-meter batteries to provide system support, such as the ARENA-funded SA Power Networks Virtual Power Plant (VPP) Trial.

Behind-the-meter domestic-scale batteries are going to be an established feature of our system.

Other projects are exploring large network-connected batteries, such as the ARENA-funded community 1.1MWh battery at Western Australia’s Alkimos Beach and the 8MWh ElectraNet battery at Dalrymple in South Australia. The latter uses an innovative business model to maximise the benefits the battery delivers to the network while improving reliability for customers.

So, there is a role for batteries big and small in our power system, but is it possible to pick a winner based on size?

An important difference between a battery in the home and the network battery is that the customer has invested in the home battery and, therefore, the priority for who gets to use that battery rests with the customer. Because of customer priority, this means that sometimes the battery won’t be available for use by the system.

Trials in the UK have shown that domestic customers who signed up their batteries to provide a system support service were only available 24% of the time. The result is that to guarantee a 1MW frequency service the aggregator has to hold 4.2MW.

Another issue with domestic-scale batteries is ensuring they are ready to provide the service.

A network battery can be sized appropriately to provide a particular function and will be maintained by experts who deliver safe and reliable services every day. A network battery can also be located where network issues are likely to arise.

The ability of customer-owned batteries to deliver location-specific services depends on how many customers in that area have invested in a battery. As we have seen from solar, take-up rates are likely to vary significantly from region to region. 

From a financial perspective, to deliver 1MW frequency service, hundreds of customers have invested $6.7m, while the network option only requires $1m of investment. While a network-owned battery would be part of the asset base, meaning customers ultimately pay for it, the customers investing $6.7m would also be expecting a return on their investment.

Another possibility for larger-scale batteries is community ownership via investment from individual customers. There are many models for how this could be operated and funded.

In Western Australia, the Alkimos Beach battery is owned and operated by a third party (Lendlease), and access is provided via a tariff that customers can select from their supplier (Synergy). Ausgrid is developing a trial of community batteries, and other networks are exploring how large-scale battery benefits can be shared with communities.

These community energy projects create opportunities for all members of the community – whether or not they have invested in solar PV and batteries – to participate in the battery revolution.

More and more complex

With the growth of low-voltage network connections of distributed energy resources (DER), the grid is increasingly being asked to perform in a manner for which it was never designed. It is the equivalent of expecting a single lane dirt road that services a small farm to cope with the traffic of a street full of homes that would be better served by a two-way bitumen thoroughfare.

With increasing DER, the potential for the network to experience reverse power flows, voltage fluctuations and power quality issues grow. These can damage assets and cause blackouts for customers.

It also impacts the ability of the Australian Energy Market Operator (AEMO) to manage system inertia for changes in generation or demand.

As rooftop solar PV operates behind the meter, the actual generation is not known and can only be estimated – networks can only see the net energy at the meter.

The lack of visibility makes it harder for AEMO to accurately observe power flows and demand across the entire energy system, and therefore accurately predict forecast demand. It also makes it harder for AEMO to fulfil its role of economically optimising the associated supply of energy without compromising system security or reliability.

How do we get visibility?

A combination of targeted network investment, data sourced from other market providers of DER (like aggregators) and AEMO’s DER register, will help provide the information networks need to obtain the necessary visibility of where DER resources are in their networks and what they are doing at any point in time.

Visibility will help them to more accurately predict the behaviour of DER across the system on a daily, hourly, or even more frequent basis, and devise appropriate plans to maintain system security and optimise network investments.

As network visibility and the knowledge of DER actions increases, the ability for AEMO to more accurately estimate power flows and demand across the entire energy system will also improve.

However, unlike the transmission network which was specifically built to transport bulk energy from a few large-scale generators, the sheer number of small-scale DER installations means a much greater level of network visibility and coordination is required.

While DER are helping households in reducing electricity consumption and lowering their electricity bills now, the addition of smarter technologies will extend the potential benefits past their meter, allowing those DER owners who want to participate in the energy market to do so.

With visibility of the local network, distributors (or aggregators) will be able to offer real-time price signals to the market allowing nearby participating DER customers to be paid to assist in maintaining system security on the occasions it is required to: provide energy into the network; stop exporting energy to the network; lower demand, or; absorb excess supply (through storage).

Customers who choose to purchase a sophisticated home energy management system or upgrade their “dumb” inverter or battery technology to make it smart will, in time, be able to receive these network signals and participate in these markets.

While a single household DER system offers just a small benefit to the electricity network, in aggregate, their power can be harnessed by market operators to form virtual power plants (VPPs), providing energy as well as network support services in return for payment.

This approach will reward those households willing to participate in such a market. It also provides a much cheaper option for all electricity customers than the alternative of undertaking network investment, especially as the network challenges created by DER tend to affect only small areas or pockets of the network and for only short periods of the year.

It will also improve the efficiency of the low voltage network and avoid the possibility of having to limit DER connections or exports, which could otherwise undermine the payback period of customer’s DER investments.

United in power

Establishing exactly what is needed to ensure the energy system and markets can accommodate and optimise household DER is the focus of Energy Networks Australia and AEMO’s joint Open Energy Networks (OpEN) project.

A coordinated approach is in the best interests of customers as it will optimise existing network assets as well as the collective generation, storage and peak demand management opportunities of customers’ DER.

The project’s interim report estimates that this optimisation will bring $1 billion of net benefits by 2030.

Batteries have huge potential and are already aiding grid stability and electricity security. While bigger batteries may be more efficient, we don’t want to discourage private consumers from investing in their own systems.

To unlock the full potential these smaller systems bring, we need to be able to see them and be smart about how they’re used.

The future will have more batteries and networks will be here to enable their use.

Michael Lewis is the media and communications manager at Energy Networks Australia.