You’re my powerwall
ELECTRICITY PRICES HAVE RISEN MARKEDLY, JUST AS SOLAR-PANEL FEED-IN TARIFFS FALL. BUT NEW TECHNOLOGY AIMS TO REVOLUTIONISE OUR POWER USAGE.
THERE HARDLY SEEMS a tech topic more guaranteed to generate controversy these days than how best to meet Australia’s electrical energy needs. Whether it’s keeping coal- red power stations or demanding more investment in renewable energy sources, such as wind, solar, thermal or hydro, everyone has an opinion, one way or another. But there is something of a revolution on the horizon that looks set to shi the debate from how we generate electrical energy to what we do with it once it’s generated.
You might be used to thinking of batteries as a source of power for when you’re on the move, but increasingly, as we move into a less-certain energy future, they’re being seen as a solution for when you’re at home as well.
PEAK DEMAND
At a macro level, power-generation authorities have to manage generation capacity to match consumer and business demand. anks to the 2000s’ tech boom that saw us bulk up on everything from big-screen TVs to airconditioning, you see peak demand on hot days when everyone cranks up their reversecycle aircon. In fact, gures from the Australian Energy Regulator (AER) show peak-demand for electricity in New South Wales alone rose from 10,200 megawatts (MW) in the summer of 1998/99 to just under 15,000MW in the 2011/12 summer season ( tinyurl.com/oe7qrtz). To more e ciently handle that demand, the National Electricity Market (NEM) brings together the power generation output of Queensland, New South Wales, Victoria, South Australia and Tasmania into a wholesale market, where electricity is priced in ve-minute lots. e Australian Energy Market Operator (AEMO) picks the cheapest bid prices from those generators and o ers what amounts to a contract to deliver power. You can read more about it from the AEMO at tinyurl.com/q83k4yj.
Because we demand access to electricity 24/7, state authorities and private power generation companies have to plan for that peak demand, which has led to numerous issues. First, even if the peak happens just once a year, that capacity still has to be on hand — an expensive proposition not just in generation, but also transmission, or ‘poles and wires’. Second, the price of electricity shoots up on those days as less cost-e ective generators are brought on-line to supply demand. As a result, rising electricity prices and generous government rebates have seen solar photovoltaic (PV) systems become a popular home renovation project over the last eight years or so.
But there’s increasing buzz around the concept of storing and better utilising the power we already generate — and that’s where batteries are becoming the hot topic.
LITHIUM ION CELLS
Ever since Italian scientist Alessandro Volta gured out back in the early 1800s how to create stores of energy in a jar lled with alternating copper and zinc plates separated with paper soaked in salty water, we’ve been searching for ways to pack in greater amounts of energy into smaller and smaller batteries. And for the last 25 years, various forms of Lithium-ion have sustained an ever-increasing proportion of the world’s billions of portable gadgets.
Japanese tech-giant Sony launched the rst commercially-available Lithium-ion battery back in 1991. And like many tech inventions, the Lithium-ion battery has been the catalyst for more than a few legal stoushes over the years. By 1994, Lithium-ion capacity cost roughly $3,000 per kilowatt-hour (kWh) to manufacture. Today, it’s down to around $250.
We’re all familiar with AA and AAA-size cells with their nominal 1.5-volt rating. But
with Lithium-ion cells having a much higher 3.7-volt nominal voltage, they’ve also introduced new cell sizes and labels. One of the most common Lithium-ion cell types is the ‘18650’, so called because of its 18mm diameter, 65mm length and cylindrical design (type ‘0’). Not much wider but quite a deal taller than the standard AA battery, 18650 cells power everything from laptops to cordless drills. According to one report, over 2.5 billion 18650 cells were manufactured in 2013 alone ( tinyurl.com/q4gqg6w).
Today, they’re even powering electric vehicles. US car manufacturer Tesla uses just over 7,100 Panasonic-made 18650 cells inside the 85kWh battery packs for its eye-catching Model S electric car. In fact, so bullish is Tesla CEO Elon Musk, his ‘Gigafactory’ currently being constructed in the US state of Nevada plans on churning out cells (possibly larger than the 18650) in their millions by 2020.
But if Tesla and other brands have their way, it won’t just be cars these little pocket-rockets power later this year — di erent forms of them will help run our homes.
TIME SHIFTING ELECTRICITY USAGE
Right now, the energy market is gearing up for something of a revolution in how electricity is used — and its thanks in large to Lithium-ion technology. A quick look at the power bill for an average Australian household shows that electricity is commonly charged by ‘time of use’ (TOU) at peak and o -peak rates (you’ll probably also have a ‘shoulder’ rate, which may be a fraction less than the ‘peak’ rate). If you’re in Western Sydney and supplied through Origin Energy, for example, you’re likely paying 31.8 cents per kilowatt-hour (31.8c/ kWh) peak rate and 13.24c/kWh o -peak (between 10pm and 7am, tinyurl.com/
owz32jf), as of July 1 this year. But what if you could store up some of that o -peak power and use it during the daytime peak periods? at cheaper stored o -peak power could o set your peak power usage by as much as 18.6c/kWh, on those rates. But combining storage with solar electricity via roof-top panels is where there’s real interest.
AUSTRALIAN POWER STORAGE TRIALS
Tesla might have a Hollywood-like pro le in this market, but it’s not the only player looking for its slice. Japanese multinational Panasonic makes the 18650 cells used by Tesla, and in June, entered into a pilot project agreement with Australian power retailers ActewAGL (ACT), Snowy Hydro’s Red Energy and Queensland’s Ergon Energy to trial its own power storage wall in solar-equipped homes. e company believes its battery tech can help solar users double the consumption rate of their own solar energy generation from 30 to 60% ( tinyurl.com/pppqezc). e Panasonic storage battery (LJ-SK84A,
tinyurl.com/nn78axa) is rated at 8kWh in capacity and can deliver 2kW of output power for up to four hours. To put that into perspective, a four-person household in NSW
consumes roughly 23kWh per day ( tinyurl.
com/p3qwfcp).
Korean giants LG and Samsung are also getting into the Australian consumer storage market. LG Chem’s Residential Energy Storage Unit (RESU) delivers 6.4kWh of storage with a 2kW charge/discharge rating. It’s rated for at least ten years/6,000-cycle life and distributed through local suppliers including Solar Juice ( tinyurl.com/q4nvwaj). Samsung SDI has three consumer models using LithiumManganese-Oxide (LMO) batteries, the largest being the three-phase AIO Series 8. Samsung’s range is known as ‘all-in-one’ because it includes the solar (photovoltaic or PV) panel converter, the DC-AC inverter and the battery system in the one box ( tinyurl.com/q4psfey).
TESLA POWERWALL SPECS
Meanwhile, the Powerwall has been so popular, reports are 2016 production has already sold out. Even so, the rst lineup consists of two models — a 7kWh daily-cycle option and a larger 10kWh model for less-frequent weekly-cycle ‘backup’ use. ey’re both guaranteed for ten years and according to the company, you can gang up to nine of the same units together for a maximum of 63kWh and 90kWh, respectively. Maximum in/out power loading is 2kW continuous and 3.3kW peak for short periods. However, the Powerwall includes the battery system only — you must separately purchase a DC-AC inverter to turn the power into AC mains, although all-inclusive packages are expected.
And that’s the key thing when comparing specs — understand what you’re getting. Does the unit include just the battery system or all of the converter/inverter subsystems to go with it? Does solar PV power require a DC-DC converter stage before charging the battery system, or does it support a more e cient direct-connect setup? ese are all questions a ecting the total cost.
WHAT’S IT ALL COST?
at’s the big question. e answer depends on what you want to build, although in general, there are three options. First, there’s the battery-only setup for time-shi ing your power usage. Second, you could add a storage system to an existing solar setup. e third option is to start from scratch and cost up an ‘integrated PV and storage system’ (IPSS) to take yourself closer to o -grid altogether.
Even if you sign up for just the time-shi option, you’re up for the cost of the battery pack, a suitable DC-AC inverter and the cost of installation. Building a full IPSS using the Tesla Powerwall, for example, you’re looking at around $7,000-$8,000 for the Powerwall install, plus another $5,000-$6,000 for a 3kW solar PV system. For other battery systems, experts say to expect prices north of $1,200 per kWh, but prices will vary.
SHOULD I GET ONE?
If you’re hoping to do your bit to reduce reliance on fossil fuels or just get yourself o the electricity grid, a storage battery system is obviously a must. But if saving money on your power bills is your prime goal, a storage system is a vastly more complicated question. You’ll nd a number of websites attempt to provide a simple cost-bene t analysis, but the only thing they seem to agree on is the fact that they don’t agree. And it’s not surprising, given the number of variables involved. Here’s a short list of the biggies: Cost and capacity of battery system Number of charge cycles system is guaranteed for Cost and capacity of DC-AC inverter Cost and capacity of your solar panel setup Current electricity tari s Your feed-in tari for exported solar power Your daily power consumption When Tesla made its announcement back at the end of April, the Aussie dollar traded at around US$0.80. At time of writing, it hovered
around the US$0.70 mark, with some claiming even US$0.60 is a possibility. Since this tech is all imported, a falling exchange rate will drive up prices, making the payback or ‘break-even’ period longer.
However, over the longer term, power prices are expected to rise, while solar and storage battery technology costs should continue to fall, as economies of scale ramp up, shortening the payback period and making it a more viable option.
GETTING FIT
Nevertheless, whether you jump aboard the storage wagon or not, change in the power generation industry is coming. If enough users buy into power storage systems and shi the charge portion of their power usage into o -peak periods, growing o -peak demand will likely see power retailers push up their o -peak prices. And if shi ing consumer demand closes the gap between peak and o -peak rates, the value of time-shi ing power usage alone is negated. Ultimately, combining solar panels and storage batteries will provide the most reliable gains. AEMO’s Emerging Technologies White Paper for June 2015 ( tinyurl.com/q6edtwp) is well worth a read.
Ironically, consumers who jumped into solar early, when buy-back or ‘feed-in tari s’ (FITs) were far more generous than they are now in some states, are still likely better o selling excess energy than storing it — provided your FIT still exceeds your retailer’s peak tari . If, however, your FIT is below your o -peak tari and you’re still grid-dependent for some of your energy needs, you’re more likely better o storing your own electricity. e NSW Independent Pricing & Regulatory Tribunal (IPART) fact sheet on FITs ( tinyurl. com/q4e83 ) is another must-read.
DO YOUR HOMEWORK
Global nancial services company UBS’ Australian analysts were reported in May to have calculated that Tesla’s Powerwall would pay for itself in around six years in Australia ( tinyurl.com/nmyje3v). However, the falling Australian dollar, the analysis’ seemingly-low installation and DC-AC inverter costs make us think that timeframe might be a bit optimistic.
At the very least, it should highlight the complexity of trying to come up with a one-size- ts-all answer on whether to buy, wait or forget storage battery systems. Frankly, we don’t think there is just one answer. But here’s what we do think:
If you’re considering a storage system without solar panels (that is, simple timeshi ing your usage), you need the gap between peak and o -peak tari s to remain as wide as possible to maximise your investment. If there’s no di erence between those tari s, there’s zero nancial gain in time-shi ing power storage.
If you already have a solar PV system and your FIT exceeds the o -peak (or if you’re lucky, above the peak) rate, skip batteries — just sell your excess power.
If you have a solar system but a FIT that’s below the discounted o -peak rate, a storage system could help better utilise the power your solar panels make.
Bottom line, though, unless you or someone else sits down and calculates your speci c situation with respect to costs, FITs and power usage, any quoted one-size- ts-all payback period or return-on-investment gure will likely be wrong for you.