Battery storage may not be economically viable or able to manage peak demand, new research suggests.
New research from the University of Queensland, commissioned by Ergon Energy, has found that battery storage faces several challenges in the future.
The research found that battery storage is not yet at a price point to make it economically viable for mass uptake and a report from the Australian Energy Market Operator says it could be many years away.
Battery storage may not necessarily benefit all customers and may not be the best way to manage or reduce peak demand on our network.
Peak demand for power is a key issue for Ergon Energy and most Australian network distribution
The University of Queensland’s 14-week study analysed usage patterns, load profiles and solar PV generation data from an area in Cairns and simulated what customer bills, network revenue and peak demand impacts would be like if large numbers of customers had standard-sized battery storage devices as part of their home energy mix.
The research included complex interactions between customer bills, revenue and peak demand.
The results revealed tariffs alone may not provide an incentive mechanism to reduce peak demand. It also showed, batteries to a certain penetration level could reduce peak demand and after that they may introduce secondary network peaks. Maximising the network demand benefit from customer-owned batteries was likely to require an integrated interaction between customers and networks.
Other key findings indicated that it was not currently economically viable for a customer to install a battery as the financial gains were negligible – the time it would take to pay-back all the setup costs, at today’s tariff rates, were just not worth it.
The report said this is especially true if customers had the State Government Solar Bonus Scheme 44c per kilowatt feed-in tariff, making it far more lucrative to sell back the electricity generated, rather than storing it in a battery during the day and using it at night.
These results all depend on the size of the battery, the customer’s energy use and local generation, but at standard, affordable sizes, the simulation showed that households could use the stored energy within a few hours upon returning home from school or work in the afternoon, serving little benefit other than pushing back the peak, albeit for a shorter duration.
Ergon said this research revealed unexpected findings but they will continue to explore options to enable customer based energy storage in a way that is economically efficient for customers and utilities.