A battery of dilemmas

A battery of dilemmas


 A battery of dilemmas


From pv magazine ISSUE 02/23

Community battery is a phrase on everybody’s lips – it promises the balance increasingly distributed electricity grids in equitable and efficient ways. The local community battery concept in Australia is championed by solar households, councils, state governments and the new, net-zero-motivated federal government. Many solar-heavy neighbourhoods want a community battery, but can they deliver on their promise?

Feasibility studies, simulations, trials, and pilots are taking place nationwide. And that represents a valid and necessary outpouring of funds, according to Greg Hannan. He is head of network strategy and non-network solutions at CitiPower, Powercor, and United Energy, three electricity distributors in the state of Victoria. In July 2022, the group published its “Electric Avenue Feasibility Study” after identifying the 30 most suitable community battery locations in the state. On release of the report, Hannan said, “The scale and speed of the transformation toward a clean energy future” means “all types of neighbourhood battery projects are needed.”

As much scope as there is for storage, Marnie Shaw – senior research fellow at the Australian National University’s (ANU) battery storage and grid integration program – says, “it’s very important that we do the right social and technical research to make good decisions about the best options.”

Community battery ownership models can take many forms, ranging from projects owned by community members or councils to neighbourhood batteries owned by distribution network service providers (DNSPs), energy retailers, or other renewables investors. Projects can also involve a mix of ownership models.

Kate Clarke, program manager of the Victorian government’s $10.92 million (USD 7.66 million) Neighbourhood Battery Initiative (NBI), told the All-Energy conference in October 2022, that phase one had seen 13 feasibility studies and three implementations funded over 14 months. Clarke says the studies have shown “for communities, many of the perceived neighbourhood battery benefits are tied with community identity and aspirations.” Perceived battery benefits include enabling more grid export of power from solar rooftops, widening access to local clean generation, raised community resilience via islanded microgrids and progress on net zero targets. Commercial community battery operators can also enjoy a return on investment from trading stored energy on wholesale and grid-balancing-service markets, Clarke says.

Enabling microgrids

Renewable energy and embedded microgrids constitute a specific application for shared batteries that help communities that are already isolated – or prone to isolation by natural disaster – have access to reliable clean energy. Microgrids have also proven cheaper for networks to operate than stringing grid-connected lines to far-flung areas. The Australian National University’s Bjorn Sturmberg believes such microgrids are perhaps most closely aligned to community expectations of shared batteries. That is, such facilities naturally shift residents’ solar power consumption and provide communities with genuine energy independence.

In many cases, “the assumed benefits of neighbourhood batteries can distract enthusiastic communities from making a logical and dispassionate examination of their objective and how best to achieve it,” says Clarke, summarising the NBI findings. “All of the technical, the financial, the environmental, and the social costs and benefits of neighbourhood batteries should be considered when assessing the viability of installing one.” The NBI and ANU plan to publish neighbourhood battery guidelines.

Community hurdles

Chris Wallin, commercial program manager for zero-carbon not-for-profit the Yarra Energy Foundation, says the development of the North Fitzroy community battery, “encountered equity issues.” With only 30 solar households in a 200-strong low-voltage network “that’s only 15% of people who can take advantage of the common land [used to host the battery],” Wallin says. The answer was to provide renewable energy to the whole local low-voltage network. With the stored energy sold at market rates and subject to network charges, it may not be any cheaper but it is greener.

Other community battery models eschew universal access in favour of “solar soaking.” The PowerBank 3 trial in Western Australia – the third phase of a community battery rollout that began in 2018 – smoothed electricity demand peaks in the South West Interconnected System grid, enabling more solar to be integrated.

Solar customers of state-owned energy retailer Synergy and network company Western Power could sign up to store and retrieve power from the battery – at a rate of $1.20 per day for 6 kWh or $1.40 per day for 8 kWh. Outcomes from phase one of the trial showed substantial savings against the price of grid electricity for a fraction of the price of households owning their own battery.

Business case

Community battery pioneers have to deal with finding land, agreeing a battery use model, sourcing software, and engaging with DNSPs for network use even before finding a way to finance their project. Thus far, most community batteries have been state financed or grant supported. Wallin says the North Fitzroy community found making a business case for a single battery was too difficult because prices are too high and revenue too low. His business-case advice is, “Do it for a network of batteries – think tens or, if possible, hundreds.” The NBI’s Clarke says people need data that define the problem or opportunity a neighbourhood battery will address.

For instance, if the objective is to increase consumption of locally generated clean power, the North Fitzroy model of charging with PV all day and discharging during evening peaks would be suitable. Solar penetration data can help place batteries in areas with high solar density.

If the aim “is to remove constraints that are limiting solar energy export, your operating model will be more based on providing network services and arbitrage, and the data you want will be around thermal constraints associated with peak demand and voltage constraints underpinning DER [distributed energy resources]-hosting capacity challenges,” Clarke adds.

Most of this data is held by network companies which, until now, have not needed to share it. “The rise of network batteries has prompted distributors to examine their customer services and data provision channels,” says Clarke. She adds that despite great strides being made by some “in improving their customer data portals, it’s early days, and everyone knows more needs to be done.”

Limited grid benefits

Electricity networks in Australia operate under a “postage stamp pricing” mandate which dictates every customer in the service area pays the same even though it costs orders of magnitude more to maintain services to far flung farms than to urban consumers. This principle, while based on maintaining equity in the community, sets up a structure where using locally generated power has no financial reward, according to Bjorn Sturmberg, research leader in the battery storage and grid integration program at ANU. In his eyes, this seriously weakens the case for using community batteries as solar-shifting devices when big batteries such as Australia’s Hornsdale Power Reserve are fitted with far more sophisticated software systems and benefit from economies of scale.

Where community batteries are unique is as a solution to particular local network issues, Sturmberg says. Reliability, daily voltage control, reverse power flows, and energy resilience in the face of natural disasters simply can’t be worked out on the continental electricity system, they have to be addressed locally. “That’s the kind of value that you’re unlocking,” Sturmberg tells pv magazine.

Because energy distributors are responsible for regulating those conditions, he feels they are the natural choice to own and operate community batteries. It may be an unpopular view with those seeking greater energy independence but, for Sturmberg, network ownership makes practical and ethical sense, given the postage stamp pricing mandate. “The benefit is then shared among a very diverse set of customers,” he says. “That, for me, makes it the best outcome for the community at large rather than the community of one street.”

Grid services

If local grid support is identified as the primary value of installing a neighbourhood battery, Sturmberg describes integrating voltage control – such as that offered by Statcom (static synchronous compensator) devices – as the “ideal thing to do.”

That is precisely what Queensland company EcoJoule Energy has done in going to market with pole-mounted batteries fitted with voltage control and other grid support functionalities. The pole-mounted design, says Ecojoule CEO Mike Wishart, speaks to both the safety concerns of storing large lithium batteries in homes and the question of where to put community batteries.

EcoStore devices, as they are called, have already been sold to New South Wales network companies. The business case of these companies, Wishart tells pv magazine, rests primarily on providing local grid support since they are precluded from buying and selling energy.

Grid companies

The Ecojoule CEO is referring to the fact network companies in Australia’s national energy market are barred from participating in wholesale energy markets on the premise they have unfair advantages. Networks are currently applying to the Australian Energy Regulator for an exception to this rule for community batteries, but it is far from certain that such an exemption will be granted.

The prohibition narrows the potential revenue a battery asset could earn for the network. But the fact EcoJoule’s units are selling goes some way to confirming Sturmberg’s impression that existing pricing and regulations around reliability are enough to make distributed community batteries stack up for networks in the near term.

More work needed

Community-based energy storage may be frontier territory in helping support Australia’s solar-rich grid and, thus far, experts have come to starkly differing conclusions about which community battery models will work best for all stakeholders. Saul Griffith, founder of electrification body Rewiring Australia, has described the community battery market and its plethora of potential models as “the Wild West.”

Shifting the value metrics for community batteries, from being seen as shared storage devices with the potential to offer revenues to instead being considered grid support equipment, may be the key, especially given the findings from software company Orkestra’s investigation into the economics of such projects.

North Fitzroy community battery

The 100 kW (284 kWh) North Fitzroy community battery was funded under Victoria’s Neighbourhood Battery Initiative and developed by a partnership between the non-profit Yarra Energy Foundation and DNSP CitiPower. The battery seeks to reduce the carbon footprint of the city of Yarra by reducing its reliance on coal-fired power. The local government area which includes Fitzroy was one of the first jurisdictions in Australia to declare a climate emergency and has set a target to achieve net-zero emissions by 2030. The battery cycles once per day, storing excess electricity from participating households between noon and 5 p.m., and selling that energy through retailer Acacia Energy onto the local network between 5 p.m. and 9 p.m. Bespoke battery operating software developed by the Australia National University and integrated by Mill Software runs the North Fitzroy battery. It manages trading on the energy market and includes an optimiser that makes minute-by-minute decisions based on market conditions.

Undertaken for local government entity the Central Victorian Greenhouse Alliance, and published in November 2022, Orkestra’s study considered projects located at 118 potential transformer locations in Powercor’s network in regional western Victoria, assessing 11,640 different project permutations and analysing both direct revenue and indirect economic benefits. Despite the study’s depth, Orkestra didn’t find a single project that came close to breaking even over a 15-year lifespan. This “disappointing” result echoes the findings of ANU as Sturmberg says colleagues researching community batteries have been unable to nail down any standout model.

Given the crevasse between the expectation inspired by the term “community battery” and the deliverable reality, Sturmberg believes it is worth returning to what motivates people’s pursuit of this logistical conundrum. That is, citizens want to have more power in the energy transition. “I think that’s an underlying emotion in all of this,” says Sturmberg. This sentiment helped drive Australia’s remarkable rooftop solar uptake and is undeniably part of the enthusiasm surrounding community batteries.

If citizens want to be involved in their country’s energy transformation, how can that energy be harnessed for the greatest good? “My view is that having those people own batteries on their street is probably not the best way,” concludes the ANU researcher.

Sturmberg and the team at Orkestra believe that encouraging communities to work with bodies such as their local network companies to co-design energy projects – whether battery related or otherwise – is a good place to start. Using local desire to participate and grow cognisance around energy efficiency and demand management – the “elephant in the room” according to Sturmberg – would also provide a more streamlined path to the shared destination of a zero carbon electricity system.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Subscribe to our newsletter

Promotions, new products and sales. Directly to your inbox.