As gas and power prices rocket, Straya to ban home batteries

Advertisement

Last week, the local gas price, which determines prices in the National Electricity Market (NEM), rebounded to $11.01/Gj, roughly 400% higher than the long term average. Meanwhile, the very same Australian gas was being delivered in Japan for $8.45Gj, roughly two thirds below its long term average price:

srjn

The reason is the east coast gas cartel. It has glutted the Asian gas market and is reaping large losses from exports. But, it is recouping that red ink at home by withholding gas in the mother of all local gouges. The result is rocketing east coast power bills because gas sets the marginal electricity in the NEM. Here is NSW:

wthw
Advertisement

The green arrow is the carbon price repeal. The red arrows are commenced shipping at the six Curtis Island LNG trains in QLD. The quarterly averaged half hour wholesale electricity price in NSW is now double what it was under carbon pricing.

There is, however, one upside. The discriminatory pricing fossil fuel extractors are applying in the failed local market is effectively a carbon tax the industry is placing upon on itself. It will accelerate the uptake of alternative technologies over time. After all, if you don’t have to, why would you sit around while Origin, Santos, Shell, Exxon and BHP having stole your gas also steal your wallet?

The principle beneficiary will be an accelerated take-up of decentralised solar/battery storage units in households and businesses as they pull the plug on the entire busted grid and go self-sufficient.

Advertisement

Or will it? From Reneweconomy:

The world’s biggest battery manufacturing brands and clean energy lobby groups have signalled they will fight proposed new guidelines and recommendations that could effectively ban battery storage units from inside homes and garages, saying the restrictions are over the top and don’t conform to international standards.

Standards Australia is believed to be preparing the release of new standards that would effectively force most battery storage units to be put in a free-standing and fireproof enclosure, possibly adding thousands of dollars to the cost of installation and making it uneconomic.

As a precursor to that move, Queensland workplace regulators unveiled new recommendations last week that suggested no battery storage units be installed inside homes and garage or adjoining sheds, and instead be put in separate enclosures.

The restriction appears to apply to all battery storage units, and not just lithium chemistries.

Some in the industry have branded the suggestions as ridiculous.

“If you’re going to ban the installation of all battery storage in the home, you might as well ban all laptops,” says Richard Turner, the CEO of Adelaide based Zen Energy, which partners with one of the industry pioneering battery storage makers, Greensmith.

“It’s just a ridiculous position for this country to be in when we have the best renewable energy resource to harness and individuals can basically be energy independent in their own homes.”

The industry fears that even if these proposals are not formally adopted and become law, they could lead to changes in insurance premiums and so become an avoidable and de-facto requirement if they remain guidelines. This puts the multi-billion industry at risk, virtually before it has got going.

The proposal have sparked a volley of protest from battery storage manufacturers, energy experts, installers and customers, who say the proposals go way beyond international standards.

International battery storage leaders Sonnenbatterie, LG Chem and BYD say they have installed batteries in tens of thousands of homes around the world without incident. They – along with Simpliphi, Tesla and others – have vowed to fight the rules.

All these companies have launched products in Australia in anticipation that it will become the first mass market for battery storage in the world, courtesy of its high electricity prices, the high penetration of solar systems, and as back-up in case of blackout.

Many of these companies use advertising campaigns showing sleek new designs incorporated inside domestic living areas or inside office buildings, like the Sonnenbatterie image above.

Julia Chen, the marketing director for China battery storage giant BYD, which launched a range of household and business products in Australia this week, said the guidelines had serious implications for the solar and battery storage industry.

She said there were no safety issues for placing the company’s lithium iron-phosphate batteries in the garage, as they only “decompose” at temperatures of more than 450°C. She suggested minimum requirements based around international standards.

LG Chem, the leader in the Australian market with about a 30 per cent share, says it has installed 30,000 battery storage units worldwide with no issues. LG Chem’s Jamie Allen predicted a major fight back from the industry.

“This would go far beyond anything else in the world,” he said. “It looks like Australia is going to overcook (the regulations) … it will end up costing the consumers more, potentially adding another $1,000 to $2,000 on system costs, just as the technology is becoming financial interesting.

“It will put up barriers, and slow the market down.”

The two main renewable energy lobby groups – the Energy Storage Council and the Clean Energy Council – have vowed to support industry.

“Requiring home energy storage units to be installed in a contained unit on the outside of a house is unnecessarily restrictive, as long as they meet strong international standards and are installed by an accredited installer to clear guidelines,” CEC chief executive Kane Thornton said in a statement.

John Grimes, the head of Energy Storage Council slammed the Queensland guidelines, which he said appear to have been produced without any industry consultation, were premature.

“This could stop all grid connected battery storage investments in the state of Queensland,” Grimes told RenewEconomy. “To have a blanket ruling that appears to rule out all battery storage, including salt water batteries, is frankly unsupportable. The minister needs to intervene at the earliest opportunity.”

More here.

Advertisement

It’s called the Australia Tax. The total mismanagement of all resources to protect a very few rent-seeking oligopolists at your expense.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.