The arrival of Tesla’s Powerwall battery storage unit in Australia over the next few months will herald the biggest challenge to Australia’s electricity industry for decades.
Tesla announced last Thursday that it is fast-tracking the roll-out of its battery storage product, and Australia will be its first market for the 7kWh household units. The first deliveries had not been expected until well into 2017.
Tesla is targeting the Australian market first because it is ripe for change, with high electricity prices; excellent sun; lots of rooftop solar (more than 4,400MW on more than 1.4 million homes); and a tariff structure that will make it attractive for households and businesses to store their solar output for self-consumption.
But the promised benefits of battery storage to Australian consumers could be undermined because of a major turf war between the incumbent utilities, whose business models are being threatened by the new technology, and because regulators are being so slow to act.
Australia’s network operators and electricity retailers say they can see battery storage coming, yet they seem unprepared for the speed of that transition. To protect their outdated business models they are erecting barriers, changing tariff structures by jacking up fixed prices, and in some cases even banning storage and electrical vehicles from the grid.
Another barrier is the emerging turf war between network operators – the companies who run the poles and wires – and the electricity retailers – the companies who package up and send you the bill – over who can deal with customers.
The retailers argue it would be unfair that networks, who operate the poles and wires as a monopoly and have a massive regulated asset base, should be allowed into the residential market.
They have a point. But many argue that the answer is further deregulation, not less: If the networks are allowed into the residential market, then other players should be allowed into the network market, such as those proposing micro-grids and other solutions that could make networks smaller and smarter, and hopefully less expensive.
The networks won’t like that because are worried about their ability to recoup revenues if more consumers supply and manage their own power – the so-called “death spiral”.
To protect those revenues, they are even going so far as suggesting that households be billed for the network even if they go off-grid. If those barriers remain, the loser will be the consumer.
South Australia Power Networks boss Ron Stobbe said last year that the energy transition could be terminal for the so-called “gentailers”, the energy giants that operate both big generation fleets and package up the bills to their clients.
Stobbe suggested the push to battery storage and the move to micro-grids could make centralized generation virtually redundant, an observation repeated by the head of the UK national grid earlier this week.
© 2015 Solar Choice Pty Ltd