Slowly but surely batteries are being introduced to the grid to help consumers make the most of solar energy captured during the day. It’s happening at utility scale and in households as system owners budget to get the most out of their PV arrays.
In Western Australia the government-owned utility Horizon Power is looking to solve the expensive problem of servicing far-flung spots on its network by testing a microgrid model where solar is deployed along with small- and large-scale storage and supply is centrally orchestrated to match demand.
The objective of Horizon’s Renewable Energy Pilot in Onslow, a town of nearly 900 residents about 1,380km north of Perth, is to test the limits of renewables as complements to traditional energy sources such as gas. It hopes for clean energy sources to fulfil at least 50% of the load.
The first stage included a 5.25MW gas-fired power plant and a utility-scale solar plant is in the works.
The second stage of the project is underway, with German battery-maker Senec selected to supply the technology offered to households as part of the network of subsidised solar-and-storage capacity included in the system.
“Those microgrids are ideal testing grounds,” Senec managing director Jaron Schächter told EcoGeneration during a visit to Sydney in March. “[Horizon] is looking at it not just from a virtual power plant perspective but from the perspective of really controlling that whole grid through technology. A lot of those learnings will then be transferred to the rest of Western Australia.”
Schächter sees Australia as a case-by-case market, where the states each have their own energy personality. “Western Australia is very, very different from other places in Australia,” he says, “and you really need to understand the specifics of that individual market to see what role batteries would play in that ecosystem.”
Senec is a subsidiary of German grid-operator EnBW, which Schächter suspects would have helped it secure the Horizon contract. “We work very closely on these topics.” He says Senec was the first company to showcase controlled energy balancing by using residential storage, in 2015.
Brains and braun
In Senec’s vision the battery is an “intelligence system” that does all the energy management. In Germany that means heating; in Australia it’s air-conditioning. “And EVs will become a major consumer in the long run,” he says. “We will need the battery with its energy management system to also become the intelligent load-balancer on the last mile, so that in developments with lots of houses where [EV ownership is high] when everyone comes home and charges we ensure the grid doesn’t go down.”
In Germany he has seen owners rationalise a battery purchase on the raw economics of cost savings and for heart-felt ideological reasons. “All of a sudden you had a marketplace where 50,000, 60,000 households a year would buy storage,” he says, “which is one of the reasons we were bought by EnBW.”
In Australia it feels like the opposite is happening, he says, where utilities might be drawn to form a relationship with a battery brand to help solve the expensive problem of supplying hard-to-reach remote customers they can only charge a fixed rate. “You can really lose money on every kilowatt in certain states,” he says, also pointing out that rising rates of storage retrofits would help manage grid instability in areas with high rates of rooftop solar.
But batteries are a tough sell in Australia. We expect shorter payback periods than Germans, he says, who are willing to accept a 12-year horizon whereas Australians hope for storage to pay for itself within 5-7 years. “It’s very hard to get a battery to pay back its cost in that period.”
Retailers need to refine their sales skills so that the message is heard, he says. Think of it this way: for 10 years, about 80% of what you would otherwise pay for your electricity is going towards paying for your solar, inverter and battery system; for the next 10 years – about the life of the system – you’re paying about 20% of your pre-solar energy costs (a back-of-envelope estimate from Schächter). “That’s how you need to look at it and that’s the point you need to make clear to the customer.”
EnBW is thinking ahead on EVs, he says, and has a strong fast-charging network in place and a “roaming operator” that allows connection to more than 20,000 charging stations. Research by the company has found EV owners do not favour using the batteries in their cars to power the house when they get home because they are worried about running out of charge while out and about. “There is already a lot of range anxiety,” he says. “And consumers are very reluctant to that concept of the energy company or your house coming into control of what’s happening to your car.”
That’s not to say he thinks it’s a bad idea. “I strongly believe the model is viable and will work.”
Schächter isn’t convinced by optimistic forecasts for battery sales, such that Australia will be the world’s biggest battery market in 2019 with sales of more than 70,000 units. “I think if the market this year ends up at 40,000 to 50,000 units that’s fantastic growth,” he says.
Beyond that, the German battery-maker wants to become a number five player in Australia this year and a number three player next year.
“We’re not going to sell directly to the consumer and treat the installer as a means to an end, like the competition is doing,” says Schächter, also hinting at a “very sizable” margin to retail partners on sales. “We are taking the long view here.”