The power police … community storage comes to calm the market

Behind-the-meter storage might be an efficient way to make the most of a household PV system but far larger batteries are needed at network scale if room is to be made for more solar. The age of community batteries has begun, writes Jeremy Chunn.

The rise of rooftop solar brings plenty of clean, free energy into our homes but the surplus that’s exported into the grid is causing trouble. Daytime demand in parts of the country where as many as every third house might host a PV system is falling to levels where networks are worried. Our electricity system is designed for “one-way” traffic, and dwindling load can trigger issues.

A drastic solution would be to discourage new PV connections or somehow cut back exports from existing ones, but that wouldn’t make sense in a world where any form of clean energy is an obvious contender to replace polluting generation. Instead, it’s a case of catching excess solar energy and storing it for later use. Owners of solar systems can buy their own batteries, of course, but the scale of the problem and the high cost of residential storage indicates bigger applications may prevail.

Shared storage assets that can charge during peak solar generating hours and discharge during peak load times will help calm the market. Networks, who face towering capital expenditure commitments unless solar is contained, will benefit if community-scale batteries are deployed at stress points in their systems. By forming partnerships with retailers, networks are ushering the era of community batteries.

In Western Australia, which is separated from the National Electricity Market, the Western Power network is moving to defer expensive upgrades by investing in 50MW of storage at parts of its system where it is anticipating strong growth in load.

“This is the first foray into giving the market as much notice as we possibly can as to where there are network issues and where we can potentially engage in a commercial service so we’re not upgrading just for a small service of the peak load,” says Western Power principal engineer Nathan Kirby.

Western Power was an early mover in community storage and has so far connected three “PowerBank” batteries to its network – as part of a trial with retailer Synergy – and nine community batteries, each typically providing four hours of storage. Customers with solar who are taking part in the PowerBank trial can see their transactions with the battery on their electricity bill. “The whole principal is that it’s a virtual storage product,” says Kirby. “For those customers who have solar and large energy needs in the peak it’s a perfect product.”

The trials have been popular. Owners of PV systems who had been considering an expensive battery retrofit would be especially tempted. “There are some people who either don’t want to install a behind-the-meter service or aren’t able to,” Kirby says. Tesla technology has been used so far but there’s no guarantee it will be an exclusive arrangement.

Enova’s Beehive Project will rely on Tesla technology.

Over on the east coast there’s a bit of catch-up going on. A trial of two community batteries mounted up power poles on United Energy’s Melbourne network went so well that it is looking to install 40 more similar units, at about 75kWh each, near substations where voltage levels are being affected by solar exports. In NSW, Ausgrid has plans for community batteries around 500kWh each at two Sydney locations and one in Lake Macquarie, north of the city.

About 25km away, in the Hunter Valley town Kurri Kurri, a community battery is planned as a project of Enova Community Energy, keeping with its spirit of shared ownership.

Five-hundred customers – half of them solar owners – will be connected to the 1MW/2MWh battery, otherwise known as The Beehive Project. “We want to store the excess solar from our customers’ rooftops in the battery and discharge it into the grid at times of peak periods and monetise that so we can pass those savings back to our customers,” says Enova Energy CEO Felicity Stening.

Sixty percent of Enova customers have rooftop PV, Stening says, “and that means 50% of the energy we purchase for our customers comes from our own customers’ rooftops” – which she says is about two-thirds more than any other retailer on the east coast.

Daytime solar is a great hedge against price spikes in the wholesale market, where Enova purchases the other 50% of energy it needs to supply customers, but those spikes occur nearer sundown. Solar energy that is stored, therefore, is a doubly powerful lever against high prices.

Enova is a small energy retailer with nearly 10,000 customers and about 1,600 shareholders. The company is working on an agreement that will allow NSW network Ausgrid to access the battery to manage constraints, in exchange for storing the containerised battery on Ausgrid’s land. Enova will be transacting in the spot arbitrage and frequency control ancillary services markets to maximise revenue for the asset.

Customers who use the peer-to-peer energy trading option included with the offer will be able to buy energy from each other or donate it to another customer.

United States-based energy company LO3 has been operating a peer-to-peer platform in Brooklyn, New York, where solar energy can be traded among customers. It opened an operation in Australia some years ago which at once stage was working on a peer-to-peer trial with Yates Electrical Services, builder and owner of solar plants under 5MW. Covid-19 put LO3’s local operation on ice.

Peer-to-peer trading might be facing an uphill battle. The regulations around electricity dictate that network charges are calculated on an import basis, so any power bought from a battery connected to a peer-to-peer platform will bear two whacks of supply charges. Regulatory exemptions would need to be sought for trials to stop participants being double-charged.

Peer-to-peer energy trading has the potential to allow customers to whittle away some of a retailer’s margin and for PV owners to earn a wee bit more than the feed-in tariff, but savings are unlikely to be significant. Also, you have to sit there watching the market like a day trader and be ready to change your behaviour around energy use to have much chance. How likely that is, it’s hard to say.

In the US, LO3’s “Brooklyn electrons” have sold at a premium to the market rate, showing that peer-to-peer is maybe an emotional decision not an economic one.

AusGrid’s community battery in Sydney, the first of three.

Community storage’s strength will be in the provision of system strength, says Bjorn Sturmberg, research leader of the battery storage and grid integration program at the Australian National University. The same can be said in theory for residential behind-the-meter batteries connected in virtual power plants, but research so far has shown community storage is a better solution because there are many fewer customers to deal with and higher surety the asset will provide services at the critical time they are needed.

“There is less variability involved for the customers,” he says. “It’s easier to get the power capacity you need in one hit in one of these community batteries rather than hoping someone can convince a very high percentage of local customers to buy batteries and to make those batteries available. A community battery is a lower-risk proposition than VPPs in that sense.”

The most efficient use of solar is on-site, there is no question about that. Not all the solar energy that is stored in a battery can be retrieved, thanks – or no thanks – to round-trip efficiency losses which can be as high as 15%. Because of such losses the same amount of solar generation will see more electrons exported as surplus into the grid than available to a VPP or peer-to-peer trading platform. “It’s not clear to me how peer-to-peer trading with a battery creates additional value,” Sturmberg says. “In the end the electrons are going to flow to your friends down the street by the laws of physics anyway.”

The no-nonsense additional value in batteries is most evident when they are recruited to manage physical constraints (by allowing more solar), to take parts of a network off-grid, to provide islanding in the case of an emergency to form a microgrid to improve reliability and resilience. Western Power’s plan for application of the technology is a textbook example. It may take operators of community batteries a while to figure out a tariff structure that benefits all owners of solar PV, however, as the trial in Western Australia showed some customers were better off under the pre-trial tariff structure.

Enova will be launching a new tariff structure for the project “to recognise that some of their energy will be coming from the grid and some from their neighbour’s solar system,” Stening says.

A Western Power community battery at Port Kennedy, Western Australia.

Enova’s Beehive Project relies on the Powertracer energy-trading platform developed by technology company Enosi, which allows users large and small to identify the source of energy and see it priced in a differentiated way.

“The heart of traceability is you are not buying energy unless that source is generating, so you can’t buy energy from the battery unless it’s discharging. The only trades that happen with the battery are when it’s charging or when it’s discharging,” says Enosi CEO Steve Hoy.

“True renewable sourcing requires it to be matched on the same grid, in the same half hour.”

A platform that identifies the source of energy allows this to happen. Enova’s actions in the FCAS or arbitrage markets take priority over consumers who are members of the project. Nevertheless, the battery will likely charge during the day and discharge in the evening peak, so consumers can expect a slice of the action.

“Operation of the battery is best put in the hands of the retailer, but the project is hoping to show there is sufficient benefit that can be distributed to the community by means of their power bills,” says Hoy, a former global lead for IBM’s global smart grid systems.

“We’re sharing the use of this asset and doing it physically by proving that when the battery’s charging I’m selling and when the battery’s discharging I’m buying. We’re trying to prove the case that a community-owned battery can deliver to the community.”

The addition of storage in front of and behind the meter is a priority to facilitate the continued uptake of rooftop solar in Western Australia’s South-West Interconnected System (SWIS), a key objective of the state government’s Distributed Energy Resources Roadmap, released in December 2019.

“Large scale front-of-the-meter storage can unlock the full capability of storage to provide power system and network benefits,” the authors of the DER Roadmap wrote. “Larger battery banks also achieve economies of scale and lower installation costs. Battery banks can also allow for centralised management of maintenance and quality control.”

Kirby says Western Power’s little squadron of 12 community batteries, although “hardly material”, is performing as hoped. “The larger you go the more efficiencies you gain in the connection and you also get that network response,” he says. “Unlike the NEM we don’t have anywhere we can pump the excess energy.”

Storage is a priority if renewables are to continue replacing coal and gas in the Western Australia’s energy mix, where coal and gas can make up between 65% and 80% of generation.

The CSIRO has forecast behind-the-meter battery storage in the SWIS will grow 24.9% a year, from 54MWh in June 2020 to 398MWh in June 2029.

To avoid system security issues flaring up over the next few years in parts of the country where solar is becoming standard issue on rooftops, batteries will need to stationed in houses, businesses, on street corners, up poles and next to distribution nodes. They will hold the power in more ways than one.

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