Community batteries are everyone’s favorite whipping boy at the moment, which probably is not surprising, given their prominence in current government programs. This kind of golden haired child preference by governments usually generates a tall poppy syndrome. But let's not throw the baby out with the bathwater.
Enough with the euphemisms! Let's talk about the Narrabri Community Battery Trial Project.
Geni.Energy were successful in the first round of the Community Batteries for Household Solar program, being one of only two organisations eligible for Stream 2 of the funding. We had been working on a research project on community battery viability with UNSW’s Digital Grid Futures Institute for a year prior. During the federal election campaign of 2022 we put our case to Labor that Narrabri was an ideal location for a community battery.
Why Narrabri for a community battery?
The key reasons we gave for why Narrabri should host one of the federal government grant program’s community batteries were that:
- Narrabri already had a high penetration of household solar, around 44% of customers, which is the highest proportion in the Essential Energy network. Many of whom signed up in the heady days of the 60c per kWh feed-in-tariff (FIT). This abundant local solar generation makes Narrabri a great community for a pilot community battery.
- Geni.Energy was ideally positioned to deliver it as we had been undertaking research to work out the viability issue and we had history and credibility in our community engagement strategies
- Narrabri needed visible projects that could lead to transition outcomes as we are a “coal impacted community” as determined by the NSW government to help visually show our local community the possibilities of a renewable energy future and workforce planning happening in other coal impacted communities
- The community battery offered an excellent “talking point” that helped Geni.Energy engage the community around the need for a transition, the need for storage in the grid and the importance of renewables
- Members of the community were already talking to us about a community battery and the benefits they were seeking
As it turned out, Labor was elected to government and the Community Batteries for Household Solar program was born, quite quickly.
This program is deliberately trying to drive three key market outcomes. One is to drive down the price of batteries at this scale (around 200 - 800kWh). The second is to create retail opportunities for everyday people who have solar, and those who don't have solar. And the third is to create network tariffs that work for community batteries.
If these outcomes were not mandated in these grant programs it is doubtful that there would ever be the incentive by these players to create these outcomes. All of these outcomes are highly desirable by all of us.
So, yoked with the responsibility to deliver a 360kWh battery in Narrabri, that would be within the grant budget to build and be financially viable to operate, but that would still provide retail opportunities for locals, we leaned into the challenge. We took on the risk willingly but with our eyes wide open.
The first thing we learnt was that we needed to include “trial” in our project name. The vast uncertainties we faced could be somewhat ameliorated when we made it clear it is a trial and that we don't have it all figured out, but that others are sure to learn from our mistakes.
What's the go with financial viability?
Having undertaken a modelling process with UNSW and a second one with our delivery partners on the community battery, Acacia Energy, we can now at least identify the parameters that should change to ensure viability.
Acacia Energy will project manage the installation phase and be our aggregators in the operational phase of the Narrabri Community Battery Trial Project.
By aggregating the energy from the Narrabri Battery with others in Acacia’s fleet, including the Yarra Energy Foundation’s battery, we can all participate in the FCAS market, Frequency Control Ancillary Services (or FCAS for short) which AEMO uses to manage reductions or injections of energy into the grid to ensure grid stability.
This opens up another income stream for the battery that is exceptionally difficult to predict and model but should improve the chances for our financial viability.
Do we get economy of scale benefits?
When looking at the cost of delivery of our Narrabri Community Battery Trial Project, the real world (though yet to be tested) budget is $1,389 per kWh. This includes our prioritisation of the community engagement elements.
Household batteries that we are currently installing in our region have a real world cost of $1,264/kWh. Not so much difference? We are yet to fully implement the Trial project so stay tuned for a final comparison which could see parody with household batteries for our region.
What's the go with a retail deal?
We have been hosting community forums for the last couple of years around the topic of community batteries. We have been exploring with our community members what community batteries are, what role they play, and what benefits could be created for the community.
Meeting face to face with community members, who are hoping to utilise the community battery, made it crystal clear to us the need to incorporate a retail arrangement so locals could directly participate in the battery.
This aspirational goal was reinforced in community members’ minds by the government’s media messages around the grant program. It cannot be dislodged, and it has forced us to work with Acacia Energy to try and find a solution. Providing storage as a service to a retailer is one way to deliver on this. It is a new approach that is challenging to achieve but without the community driving this demand, no one would have tried to solve it.
What's the go with network tariffs?
Essential Energy owns and operates our local electricity distribution network and we have been working with them to deliver the Narrabri Community Battery Trial Project. This has opened up the opportunity for discussion on their two way community battery sun-soaker trial tariff. This tariff is designed to incentivise the assumed activity of a community battery - to absorb excess solar during the day and make it available during the evening peak.
This is core to the value proposition that community batteries should provide. This in turn should allow for more rooftop solar in the local network and reduce the need for curtailment of household solar during the day. All the things that we all want to see.
They do this by providing tariff-free consumption from the grid between 10am and 3pm and a tariff-free export to the grid period 5pm overnight through to 10am. There is also a rebate paid during the peak consumption time of 5pm to 8pm. This all helps improve the financial viability of the battery, however the daily fee in the trial tariff pushed us into unviable territory.
Providing feedback to Essential Energy about the unsuitability of this daily fee for batteries at our scale has meant they have developed a new Low Voltage small scale tariff applicable to our situation soon to be released.
Why do we need community in community batteries?
If groups such as Geni.Energy, who are community-facing and intrinsically linked to the customers that these technologies are designed to benefit, are excluded from community battery projects, they will not evolve, remain relevant and user-friendly.
We have already seen changes to the retail arrangement and the network tariff that will see improvements in the community batteries. By being so closely connected with the community, my hope is to stimulate new innovation, new use cases and flow on benefits from the Narrabri battery.
A key aspect of our Narrabri Community Battery Trial Project is our community engagement elements. We are adamant that all infrastructure based government programs must properly resource the engagement, education and advocacy parts of the project. When the technology must meet face to face with those using the technology, it cannot avoid the feedback loop and it ensures that products continue to evolve to meet the needs.
Equally, community needs to understand the technology, its importance and its use. This is part of our transition.
We believe that the fundamental operating disadvantages, pointed out by others that currently face community batteries, should change. Whilst these disadvantages are the status quo, they do not need to be. Why not change these parameters, in order to make community batteries work, rather than dismiss community batteries out of hand.
We will continue to work hard to road test these technologies, to educate people about their use, and to provide a feedback loop to continue to improve these technologies for the people that they are designed to help. Without “community” in community batteries these projects will atrophy and lose relevance.