CitiPower ponders community battery rollout for Melbourne

The network is moving to pre-empt solar-related constraints with a plan that could see hundreds of storage assets connected by 2030.

Torrents of solar energy exports around noon are forcing some networks to take action unless they want to fork out for expensive upgrades to manage voltage volatility. But if all that excess electricity can be sucked into storage for use later in the day, then who’s to say homeowners and businesses can’t carry on happily adding or extending PV systems into the future?

Residential storage is catching on and some networks have worked out the power they can wield by partnering with retailers and deploying community-scale batteries.

A recent announcement from Victoria shows community storage is going mainsteam. In late January electricity distributor CitiPower and the Yarra Energy Foundation signed an agreement to plan and build a battery network in the Melbourne CBD and inner-city suburbs.

“It’s a fairly complex environment in the urban community we are tackling together here,” Yarra Energy Foundation commercial program manager Chris Wallin tells EcoGeneration. “CitiPower’s network is certainly being challenged a bit with so many people putting on solar and not being able to export or finding it difficult to do so. Community batteries is a way to absorb a lot of that solar energy.”

About 5% of rooftops connected to CitiPower’s infrastructure host PV systems, which doesn’t sound like a lot when you consider some other metropolitan networks are grappling with penetration levels between 33% (Western Australia) and 38% (Queensland). It will be a different story by 2026, Wallin says, when nearly one-in-four rooftops on the CitiPower network are forecast to bear solar arrays.

If Yarra, a not-for-profit energy consultancy established by Yarra City Council in 2010, and CitiPower build an adequate army of storage assets the ground will be set for a rapid uptake of PV by homeowners and businesses.

Wallin expects hundreds of batteries – generally between 120kWh and 500kWh – will be connected to the network over the next seven to eight years.

“On the one hand we want as much energy as possible to offer services,” he says. “On the other hand we don’t want [a typical battery] to be too big, so that we can have more of them visible to each community, so they can develop a connection with them. It’s not so helpful when there is a community battery but it’s five blocks away.”

Storage capacity will increase as the program matures, Wallin expects, in line with improvements in technology.

Yarra expects to finish its investigation into feasibility by April, when it will have information for CitiPower on what extent the network should expect to rely on the services of the battery and what returns institutional and community investors might expect from the project. An initial trial site will also be recommended. Several retailers will need to be involved to ensure retail contestability for the consumer.

Wallin says it’s too early to have set a minimum investment amount for retail investors and indeed declare how much capital is being targeted. Institutional investors, he says, will be tempted by income streams from spot market arbitrage and FCAS support. So far, the response from institutional investors has been positive, he says, “because the assets are not [to be built] far away”.

“We’re looking at different structures on how to allow the community to take advantage of the battery, either as investors, consumers or prosumers – producers of solar energy as well as consumers – whether these consumers are in a flat, a house without suitable roofspace for solar or small-medium businesses,” he says. “It’s a real level playing field with community batteries.

“If we can crack the nut on how to make the business model work I think this could spread very rapidly right across urban settings, whether it’s Melbourne, Sydney, Brisbane or elsewhere.

“The idea is to make it as replicable as possible,” he says. “We can get to 2030 and have many hundreds of these installed – and that’s just in Melbourne.”

The alternative to community batteries is widespread adoption of residential storage.

“Residential batteries are great, if you can afford them,” Wallin says. “They provide a much better way of self-consumption because they can store that energy to use when you need it at home. The issue today is that home batteries are quite expensive and there quite a lot of restrictions of how to have them installed, and the maintenance aspect. All these things are taken away with a community battery, where it is managed by a local structure that has been purposely designed to take care of it.”

The tariff structure or subscription system would be determined based on the type of customer, he says, with storage included as part of a retail offering. The project also aims to take advantage of legislation for crowd-sourced equity funding to find how to create a structure of investment into people’s local battery while offering institutional investment at network level. “The legal structures are also part of this investigation as to how we will structure this.”

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