I’m heading home after a couple of weeks in Australia (hence the lack of posts).
The Aussie government scheme for domestic batteries might be a genius solution to many of the challenges of the energy transition. The federal government is offering around 30% discounts on domestic batteries, and the country is snapping them up in droves. They have plans to install 2 million batteries in the next 3-4 years with 40 GWh of capacity at a cost to the government of around £3.5bn (AUS$7.2bn).
Pretty much everyone I spoke to was planning to take it up and were quoting more like 50% savings on their installation bills (admittedly I was with energy people).
One side effect of the Australia scheme is that homes are installing batteries far larger than they need for a single day. Common practice is to size a battery so that you can fill it cheaply overnight and use the power during the day. The average of 20kWh per house is well over this, so owners will have options of what to do with their excess capacity.
This is where the physics and the money come together. Current market mechanisms encourage price arbitrage of filling cheaply overnight to avoid expensive energy during the day, but it doesn’t have to be like this; an alternative market mechanism could encourage householders to support the grid at peak times or to address local network constraints with flexibility schemes.
If a similar scheme was launched in the UK batteries could be installed in 5 million homes and have a capacity of 100 GWh at a government cost of £9bn. Depending on the season and time of day this could run the UK for several hours.
Bear in mind that the UK target for flexibility services is 30 GW by 2030, so a scheme like this could deliver three times (for one hour) this target in the same timescale.
A targeted roll out could have even more value – roll them out in Scotland less need for curtailment payments, in west London to get that data centre connected, in East Anglia to reduce the need for that new transmission line (this would need batteries at both ends of the line to better balance the power flows on existing lines), build baby build more renewables – connect and manage could be over, and perhaps gas sets the price less often?
£9bn to achieve this doesn’t sound too unrealistic, given curtailment costs are well over £1bn per year, transmission lines cost billions, the value of lost investment from the data centres going to Ireland is also billions.
Worth copying the Aussies?
