Australia 2035

Australian Electric Grid Operator Predicts Half Its Customers Will Have Home Battery Storage by 2035

Australian Electric Grid Operator Predicts Half Its Customers Will Have Home Battery Storage by 2035

The boss of Australia’s fifth-largest electricity distributor has hinted that residential solar-plus-storage could help prevent blackouts like the one that rocked South Australia last September.

SA Power Networks CEO Rob Stobbe predicted that 50 percent of his company’s customers would have home battery storage by 2035, and 30 percent would have electric vehicles.

The battery storage in the vehicles alone would amount to 2 gigawatts of potential load or reserve, Stobbe told attendees last month at a gathering to reveal the findings of an Australian Energy Market Operator (AEMO) final report about South Australia’s September outage.

SA Power Networks is already encouraging customers to take up storage. It finished building Australia’s largest virtual power plant, covering 100 Tesla battery systems and costing AUD $3 million (USD $2.3 million), in Adelaide, South Australia, in December.

The project, which will “ease pressure on the state’s vulnerable network,” according toThe Australian, was completed amid concerns about renewable energy’s role in the September blackout.

“By 2035, at least 70 percent of our customers in South Australia will have solar on their roofs, with about 2,000 megawatts of capacity,” Stobbe said at the event, hosted by the Committee for Economic Development of Australia.

“When you consider our peak is about 3,000 megawatts and average demand about half that, you can see that solar from the roof, even though it is intermittent, will have a big impact,” he said.

That impact could help avoid widespread power losses like the one experienced by thousands of homeowners last September. The AEMO report pinned the blackout on thunderstorm supercells bringing down more than 20 transmission towers, and also causing wind farm protections to switch turbines off.

Australian politicians, including Prime Minister Malcolm Turnbull, blamed South Australia’s reliance on wind power for the outage. Stobbe, though, suggested renewables may be part of the solution rather than part of the problem.

“We are moving from a one-size-fits-all industry arrangement, with centralized generation flowing to customers through the transmission and distribution networks, to more diverse kinds of generation, large- and small-scale,” he said.

“There is no doubt in the next 20 to 30 years the whole network arrangement we have in Australia will be totally different. And why wouldn’t it be?”

Even now, he said, network operators in Australia are beginning to see two-way energy flows as distributed generation takes over from the traditional hub-and-spoke distribution arrangement.

“We already are modifying our network to enable all this distributed generation and storage to be linked,” he said.

One consequence of the shift toward distributed generation is that regional distribution network operators such as SA Power Networks might have to take greater responsibility for the security and reliability of electricity supplies at local level.

This role currently falls to AEMO, but the burden could shift as residential solar and storage adoption rises with falling battery costs.

SA Power Networks estimates that within five to 10 years the cost of solar-plus-storage generation could drop to AUD $0.15 (USD $0.11) per kilowatt-hour.

That is more than 57 percent lower than the current retail electricity price of around AUD $0.35 (USD $0.26) per kilowatt-hour.

People in South Australia “will probably be getting electricity from their solar panels at 5 cents per kilowatt-hour and probably batteries in the next five to 10 years will be able to store it at 10 cents per kilowatt-hour,” Stobbe predicted.

This assumes battery storage costs will more than halve in price within the next decade.

Today the most cost-effective battery on the Australian market, from Ampetus, has a cost of AUD $0.19 (USD $0.14) per total warranted kilowatt-hour, based on one cycle per day and without inverter costs, according to SolarQuotes’ product comparison table.

The average cost for battery storage across the 33 models listed by SolarQuotes, though, is AUD $0.57 (USD $0.43) per warranted kilowatt-hour. That is almost 83 percent higher than the level SA Power Networks is predicting within a decade.

The forecast figures are based on a future operating model that the distribution network operator has been refining since 2011, said SA Power Networks’ stakeholder relations manager, Paul Roberts.

“The big driver of cheaper storage in Australia, and most markets for that matter, comes from rapidly declining lithium-ion battery costs,” said Brett Simon, an energy storage analyst with GTM Research.

“Additionally, Australia is uniquely positioned for residential solar-plus-storage growth, given a combination of high retail electricity rates and feed-in tariff rates that are declining or, in cases like New South Wales and Victoria, have expired recently,” said Simon.