In recent times, a fairly stunning statistic has been doing the rounds – that a $1,500 air conditioner installation will result in $7,000 worth of network upgrades to ensure that the electrical grid doesn’t collapse under the strain on a hot day. The statistic comes from a 2011 Queensland Government report suggesting that each additional 1 megawatt of peak demand requires, on average, $3.5 million to be spent on the electrical grid. As Evan Beaver – aka evcricket, writer of the excellent blog on Australian energy issues – points out, as does John Quiggin, that there are any number of demand management approaches that could be used to knock the top off the afternoon peak, most of which would be made easier if governments get over themselves and mandate smart metering and allow the introduction of time-of-use pricing.
But something new popped up in my Facebook feed recently – a company selling a lithium-ion battery-based energy storage system for homes with solar panels. Battery backup for solar systems in remote areas is nothing new, of course, but such systems have always used (relatively) cheap but large and heavy lead-acid batteries.
So lets run a little thought experiment. What kind of lithium-ion based energy storage system could you get for $7,000? Can we brute force a more cost-effective solution, without even trying to modify our home energy usage to be more efficient? In a nutshell, could we use battery backup for air conditioners to knock off the peaks?
Apparently, automotive lithium-ion batteries of the type used in the Nissan Leaf or the Holden/Chevrolet Volt currently cost around 500-600 USD per kilowatt-hour of storage capacity. Taking a rough guess that a cabinet and charging/inverter electronics shouldn’t be much more than $1,000, that means you could probably get 10 kilowatt-hours of nominal capacity out of a battery. Given the energy demands of an electric car, I would assume that such a battery pack would easily cope putting out a couple of kilowatts of power to run an air conditioner!
10 kilowatt-hours is of course enough to run a 2 kilowatt air conditioner for 5 hours, enough to get through most peak demand scenarios.
In practice, keeping a lithium-ion battery fully charged, and repeatedly fully discharging it, doesn’t do wonders for battery lifespan. But here’s the thing – peak demand spikes are rare events. In Victoria, the average demand in the month of February 2011 was 5800 megawatts. The peak demand was 9570 megawatts – the highest demand seen in the system in 2011. But the demand was only over 9000 megawatts for a total of four and a half hours in one period between 10:30 am and 3 pm on the 1st of February. Indeed, the demand was only over 8000 megawatts for about 15 hours. So, from the perspective of chopping off peak demand, an energy storage system would only have to operate to its capacity a couple of times a year, times that are increasingly easy to predict with weather forecasting. Therefore, most of the time the storage system wouldn’t be operated at its full capacity, and the batteries would last for a long, long time.
The upshot of all this? Even at current prices, domestic home energy storage in the form of lithium-ion batteries is at the very least close to being an rational approach to managing our electricity grid in some parts of Australia.
But, given all the perverse incentives in the way we pay for energy, it will probably require a lot of rule changes to actually make it happen.
UPDATE: Toshiba, the Japanese electronics and battery company, clearly thinks there’s something to the idea, given the impending release of a home storage system very like what I’ve just modeled above.