Air conditioners, $7000 electricity network upgrades, and home battery setups

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.

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5 Responses to Air conditioners, $7000 electricity network upgrades, and home battery setups

  1. drunkslag says:

    Personally I’m convinced that the best option for future energy needs is to rely on decentralised sources of energy generation (in particular solar). Just waiting for a cheap and effective way to store energy – and hopefully lithium-ion batteries is just that. In slightly related news, storing hydrogen at low temperatures and pressures is another possible alternative that is getting closer to being viable.

  2. evcricket says:

    I wouldn’t put my money on Li-ion for home storage; lithium is good for “energy density”, meaning smaller batteries for cars and mobile phones. If weight isn’t a problem, some of the domestic flow batteries trickling into the market seem better suited to the home user. Redflow is an Australian company testing Z-Br batteries. Here’s a press release from them:
    But I agree, home-storage is looking like a more and more viable option with solar. Consider too, if you have solar at home, whether you could use the electricity as it is made at 12V DC, rather than copping the 25% loss through your inverter. I haven’t done the maths yet, but I’m strongly considering putting all my house lights onto 12V LED and running them off normal 12V lead-acid batteries.


    • There might well be better chemistries out there for domestic energy storage – I was just trying to do a thought experiment with a familiar technology.

      As far as running lights straight off 12V DC goes, could you use the existing 240V light wiring?

      My high school level knowledge of elec eng (I can just barely remember what a voltage divider is) suggests that resistance and consequent heating shouldn’t be a big problem, but like I said I’m no elec engie.

      I’d also wonder whether reusing wiring would make your friendly local electrician cranky as they wouldn’t know whether they are dealing with 12 VDC or 240 VAC when they come across a cable.

  3. evcricket says:

    Robert, I’m pretty sure the wires in place will be fine. Wires are rated for current or power, and these should be significantly lower with a 12v-DC set up.

  4. BilB says:

    This is an interesting take on the energy picture. It further reinforces the economics of our GenIIPV system which completely by passes all of those issues.

    I’ve got an interesting letter from Minister Combet which says that he is too busy to learn about an energy system that will ultimately produce 60%, of all of Australia’s electricity while improving the living standard of families who deploy it by 20 to 30 percent, even though it costs the government nothing, requires no subsidisation for its viability, and offers a significant range of export opportunities for Australia in finished product as well as IP lisencing income. I put through a request for a brief discussion with the minister as I saw him as the most knowledgeable person in the field while in government and his minders immediately assumed that we were looking for government funding, so we got a call from Aus Industry. I pressed the point to attempt to get across the notion that what we were looking for was networked connection and funding from the Victorian and South Australian Auto Industry Componentry Manufacturers and the segments of the Auto Industry that will be heading for the wall in the near future if the Federal Coalition get their hands on government. This segment of industry are the target manufacturers for the GenIIPV system (that is a token name for the project not the marketing name), which will turnover a nominal 6 billion dollars a year for 30 years once in production.

    And the minister concludes with (paraphrased) …..”good on you guys for being innovative but we’ve got this covered” …and he lists the government schemes planned or underway. So my partner is off in China at the moment, principally to attend a trade show for our bread and butter products, gettting huge interest for GenIIPV over there.

    Meanwhile I have friend (extremely interesting guy) currently installing a Blue Gen system in his new house in Katoomba, so I will have some real world feed back on that in the comeing years.

    You might want to read this detail rich article from Euan Meanes at the oil drum

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