2 November, 2023

Neighbourhood batteries, also called community batteries, offer great potential as a mid-scale storage solution to support suburban electrification and the expansion of rooftop solar in a more efficient and equitable manner. A team of researchers from the Battery Storage and Grid Integration Program has been working to develop a framework for neighbourhood batteries which will help government organisations in the evaluation of government-funded neighbourhood battery projects and programs.

In 2022, a collective promise of $300 million from federal and state governments was made to support various neighbourhood battery projects and initiatives throughout Australia.

It is hoped these government-funded projects will provide an opportunity to develop economically viable business models for neighbourhood batteries that align with broader policy objectives of decarbonising the economy while ensuring affordable energy.

Comprehensive and ongoing evaluation would enable the sector and wider community to fully capitalise and benefit from these government-funded projects. As neighbourhood batteries are a new form of energy storage with diverse model options and operation modes, there are still many unknowns regarding the impact they could have.

This includes how they compare to alternative energy storage options like uncoordinated or coordinated household batteries and electric vehicle battery storage, and larger scales of storage. Thorough evaluation would provide clarity about successful models, pathways and obstacles particularly in relation to community involvement, and the overall role of neighbourhood batteries in the wider energy transition, to inform ongoing policy decisions.

The promised environmental and social benefits of neighbourhood batteries are by no means guaranteed. The impact on emissions depends on charging from renewables and reducing demand for coal-powered sources. Grid support provided by neighbourhood batteries relies on their placement and operation.

The impact on household bills varies based on ownership models.Furthermore, equity improvement is not guaranteed, as emerging models may unintentionally perpetuate inequalities among households. Evaluating these benefits as neighbourhood batteries are rolled out is necessary to ensure positive outcomes from this public investment and ongoing social licence for this emerging technology.

The neighbourhood battery impact framework

To facilitate these evaluations, the Australian National University (ANU), in collaboration with the Victorian Government, has recently released a neighbourhood battery impact framework. This comprehensive tool prepared by Dr Wendy Russell, Louise Bardwell, Dr Hedda Ransan-Cooperand Dr Marnie Shaw serves as a guide for conducting effective evaluations, particularly for battery projects funded by taxpayers.

The framework aims to provide valuable insights for refining business models, policy directives, and tariffs related to the implementation of neighbourhood batteries and battery storage in general, with the main goal of maximising positive outcomes for Australian households and businesses.

Table 1: Overview of the ANU neighbourhood battery impact framework

The framework considers a wide range of social, economic, environmental, and network impacts, recognising that the goals of neighbourhood batteries are variable and contextual. These impacts are split into three main categories: sustainable energy transition, sound governance and social acceptance, and economic impacts.

It provides recommendations on how to quantify each impact under these categories, offering both accessible “light” measures, suitable for all organisations, and more resource-intensive “full” measures, appropriate for larger entities and for independent evaluations.

To ensure effective community engagement and integration of residents’ values into battery projects, the impact framework evaluates the extent to which projects have involved and collaborated with local residents.

This approach goes beyond consulting nearby residents during site selection; it aims to incorporate their perspectives into the design of business models and battery governance. This shift represents a new paradigm in the energy sector, moving beyond only techno-economic considerations.

ANU hopes that the impact framework will help planners understand both the positive and negative impacts of energy technology initiatives, and that this understanding will enable the design of goal-aligned projects with realistic anticipation of potential hurdles.

Specifically in the context of neighbourhood batteries, past experience has shown that transparently communicating both the benefits and risks associated with neighbourhood batteries is needed not just to understand their role in the broader energy transition landscape but to maintain public trust.

Putting consumers first in ongoing neighbourhood battery research

There are still considerable knowledge gaps and questions regarding policies that directly impact consumers, such as household solar exports and battery tariffs.

To fill some of these gaps, ANU’s work in this area has received further support through a grant from Energy Consumers Australia (ECA), titled “Keeping the community in community batteries: targeted research and knowledge  to maximise consumer benefits”.

This year-long project led by Dr Marnie Shaw aims to address and clarify policies that will impact consumers during the neighbourhood battery roll-out, ensuring their interests are protected.

Importantly, the grant will also support knowledge sharing activities among community groups, businesses, researchers, policymakers, regulatory bodies, and government agencies. Knowledge sharing forums have been shown to significantly support the roll-out of neighbourhood battery projects and government programs.

Over the past 12 months, they have enabled and supported community energy groups and councils in their applications for battery ownership funding. They have also facilitated discussions between stakeholders and the Australian Energy Regulator (AER) and informed the development of neighbourhood battery trial tariffs in partnership with Distribution Network Service Providers (DNSPs).

By continuing these collaborations and fostering further discussions and recommendations on the implementation of neighbourhood batteries, this project seeks to leverage stakeholder input to develop targeted communication strategies and recommendations for decision-makers.

Focusing on community and local needs

Based on existing research, it is evident that many people are enthusiastic about community-scale storage due to its support for solar generation and its potential to provide local economic value, employment opportunities, and localised battery profits. People also desire to actively contribute to reducing energy use and promoting fairness while building community connections and sharing the benefits of local renewable energy.

To get the most out of the neighbourhood battery roll-out for energy consumers, a range of ownership, business models, and financing options will need to be implemented in the coming years. Some models may require more support than others, such as those involving councils and community groups.

Evaluating trial projects will determine the benefits different models deliver, including customer bills, network support for customer energy resources, fairness, transparency, andeffective decarbonisation.

The ultimate objective of ANU’s neighbourhood battery impact framework and the ECA grant is to collaborate with stakeholders interested in this field, working towards the shared goal of shaping the energy transition to meet local energy needs and achieve rapid, low-cost, and equitable decarbonisation of suburbs.

Marnie Shaw is an Associate Professor at ANU within the ANU Battery Storage and Grid Integration Program (BSGIP). Marnie co-led BSGIP’s work on the Neighbourhood Battery Initiative (NBI) funded by Victoria Government and continues to lead neighbourhood battery research with funding from Energy Consumers Australia (ECA). Hedda Ransan-Cooper is a Senior Research Fellow at ANU. Hedda co-led BSGIP’s work on the NBI and continues to lead the social science program within BSGIP. Dr Wendy Russell is currently a Research Fellow within BSGIP and was a key contributor to the NBI. Louise Bardwell worked as a Research Assistant at BSGIP and has worked on both the NBI and ECA project.

This article originally appeared in Energy Magazine.