The power of sharing: community batteries benefit domestic solar users

The decreasing costs of energy storage technology, combined with the increasing need for demand flexibility, are opening new possibilities for energy storage deployment across electricity distribution networks. The introduction of community batteries will capture these trends through locally based shared battery systems which will allow customers to store excess solar photovoltaics (PV) production.

What are Community Batteries?

Gaining notoriety back in September 2016 when Tesla CEO, Elon Musk made the bullish claim he could solve South Australia’s ongoing power woes in 100 days, battery technology has become a widely embraced solution to smooth the variability of wind and solar power.

Just like the name suggests, a community battery is just that – a large contraption that powers local distribution networks in both metropolitan and rural areas.

Particularly benefiting consumers who choose to use solar energy, the community element ensures that a region only needs to have one single installation cost, while also ensuring that all the power generated is securely stored. Just like an ordinary AA battery powering your TV remote – it only utilises power when required.

A flexible solution to existing and emerging challenges faced by networks and customers in the new electricity marketplace, the battery offers a unique opportunity.

The Benefits

In collaboration with Ausgrid, KPMG recently investigated the feasibility of community batteries compared with traditional electricity options to determine the positive benefits over the next three years.

The positives are:

1. If you don’t need it now, you can use it later

As the generated electricity is stored in a central location, nothing generated will go to waste. Networks will also be able to draw on the battery to improve network reliability while retailers could access the battery to trade and lower electricity prices.

2. A leading innovation

Community batteries could play an innovative role in the transition of the energy sector by helping to address the increasing mismatch between supply and demand on the network caused by deployment of solar PV.

3. Solar customers to save

Community batteries will provide a cheaper and more equitable way for customers with solar PV to be rewarded for participating in the market. A key benefit is that the community battery can capture the value of diversity of customer load patterns and be sized optimally. This avoids the risk and extra costs that individual households face of investing in too much battery storage capability which they don’t always fully utilise.

4. Distribution Centre (DC) a thing of the past

A community battery can offer an alternative network solution to address overloads at the DC level. Depending on the type of DC, the number of customers that a 500kWh battery could serve may be limited to 50-100, or in other cases it may be able to service up to 250 customers, which is considered the largest typical DC size.

What’s next?

For community batteries to succeed it is important to satisfy the needs and objectives of local energy communities. Trialling the technology will provide a great opportunity to better understand the value of community batteries and how to engage with customers and encourage participation in these community energy solutions.

When it comes to the physical size of any potential community battery, our analysis indicated that the economics of larger batteries would be more favourable overall due to higher market revenue potential and irrespective of the overload condition.

However, it is not always possible to install a large kiosk for various reasons and as such an option for a kiosk of a smaller size must also be considered. With a continually expanding population and requirement for electricity, it’s going to be a balancing act.

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