Great post, really important topic. I'm pretty sure the reason why this 'eSaaS' model exists is because, when you sit down with your mate at the pub and they suggest there should be a community battery, this is the model they describe. People would like to own a slice of a local home battery for their solar. So this whole subscription thing has all been done for The Social License.
This does not mean it is sensible or a good idea, as you have highlighted. The energy system should avoid postcode lotteries for consumers in almost all cases.
There is still a really good case for there to be what I think are better called 'neighbourhood batteries'. Having lots of storage all over the network that is charging and discharging efficiently would make energy cheaper overall, smooth out network demand, maximise utilisation of the existing grid. The highly localised pricing signals that would make this work (Ausgrid have been working on this in Project Edith) should be available to battery owners on a very opt-in basis. This is in fact a bit of a postcode lottery which would potentially make it better to invest in a battery in some locations over others, but is the 'correct' outcome - some locations need batteries more than others.
It's complex, but I think there is also a defensible case for the way the current crop of batteries owned by networks are accounted for, with some portion allocated and recovered based on the RAB, and the remainder leased out (and probably some of that lease revenue should also be allocated to RAB recovery pile and displace other revenue recovery, given a lot of battery cost is actually RAB land costs, I don't know if this is true in practise). Yes, the networks own more land and have more electricians and sites and lower cost of capital that mean they will be able to roll these out cheaper... but that's good. They can also thumb the scale in some ways to favour their own battery connections, which is bad.
In the long run, the networks might own some batteries, but the important thing the networks should be tasked with in these trials is establishing the level playing field for a highly permissive environment for new batteries - with a streamlined connection process, standardised telemetry/dynamic envelope controls, and the pricing frameworks that will be offered to third parties. Currently it takes many (6+) months of council planning assessment and similar months of network connection overheads to get a new battery connected in the best case. The goal should be days. Might try and write a longer post about this. We (Rewiring Australia) want to see this kind of process underpin the Illawarra 'Urban REZ' .
Cracking read as always my friend, you make the ridiculously complex seam almost digestible to us mere mortals. Please continue to unpack these important issues during such a pivotal time in this energy transition.
I've never understood how network owned batteries leased to a single retailer could be classed as "community" assets. There's definitely benefits to having FTM storage in the distribution network, but lets find models to make that viable instead of resorting to dubious branding exercises!
Nothing in “network” & “tariffs” makes sense. Apart from a few retailers offering spot pass through the big retailers/gentailers retail offering are not pinned to pass through of network prices.
My only other comment is sharing of the unregulated revenue the networks are getting from leasing their assets to use by third parties. A share of the revenue they earn does back to customers via an allowed revenue adjustment which is imho wrongly skewed against the customers. Further, the amount of unregulated revenues networks earn each year is usually a piffle compared to regulated revenues any adjustment would be lucky to move the network rates down by .0001c/kWh.
Great post, really important topic. I'm pretty sure the reason why this 'eSaaS' model exists is because, when you sit down with your mate at the pub and they suggest there should be a community battery, this is the model they describe. People would like to own a slice of a local home battery for their solar. So this whole subscription thing has all been done for The Social License.
This does not mean it is sensible or a good idea, as you have highlighted. The energy system should avoid postcode lotteries for consumers in almost all cases.
There is still a really good case for there to be what I think are better called 'neighbourhood batteries'. Having lots of storage all over the network that is charging and discharging efficiently would make energy cheaper overall, smooth out network demand, maximise utilisation of the existing grid. The highly localised pricing signals that would make this work (Ausgrid have been working on this in Project Edith) should be available to battery owners on a very opt-in basis. This is in fact a bit of a postcode lottery which would potentially make it better to invest in a battery in some locations over others, but is the 'correct' outcome - some locations need batteries more than others.
It's complex, but I think there is also a defensible case for the way the current crop of batteries owned by networks are accounted for, with some portion allocated and recovered based on the RAB, and the remainder leased out (and probably some of that lease revenue should also be allocated to RAB recovery pile and displace other revenue recovery, given a lot of battery cost is actually RAB land costs, I don't know if this is true in practise). Yes, the networks own more land and have more electricians and sites and lower cost of capital that mean they will be able to roll these out cheaper... but that's good. They can also thumb the scale in some ways to favour their own battery connections, which is bad.
In the long run, the networks might own some batteries, but the important thing the networks should be tasked with in these trials is establishing the level playing field for a highly permissive environment for new batteries - with a streamlined connection process, standardised telemetry/dynamic envelope controls, and the pricing frameworks that will be offered to third parties. Currently it takes many (6+) months of council planning assessment and similar months of network connection overheads to get a new battery connected in the best case. The goal should be days. Might try and write a longer post about this. We (Rewiring Australia) want to see this kind of process underpin the Illawarra 'Urban REZ' .
But no more 'eSaaS'.
Cracking read as always my friend, you make the ridiculously complex seam almost digestible to us mere mortals. Please continue to unpack these important issues during such a pivotal time in this energy transition.
I've never understood how network owned batteries leased to a single retailer could be classed as "community" assets. There's definitely benefits to having FTM storage in the distribution network, but lets find models to make that viable instead of resorting to dubious branding exercises!
Holy moly!
Ok, this is seriously good. Who are you?
He's 'Batman'!
Nothing in “network” & “tariffs” makes sense. Apart from a few retailers offering spot pass through the big retailers/gentailers retail offering are not pinned to pass through of network prices.
My only other comment is sharing of the unregulated revenue the networks are getting from leasing their assets to use by third parties. A share of the revenue they earn does back to customers via an allowed revenue adjustment which is imho wrongly skewed against the customers. Further, the amount of unregulated revenues networks earn each year is usually a piffle compared to regulated revenues any adjustment would be lucky to move the network rates down by .0001c/kWh.