Betting on Batteries: Why Home Energy Storage is set to change the game
Top 3 innovations
Recently I’ve been very lucky to spend some time travelling across the UK speaking to different energy suppliers as part of my Talking Utilities podcast. Part of these conversations always focus on which innovation is set to have the biggest impact on the sector going forward and normally 3 particular answers come forth:
- Artificial Intelligence
- Electric Vehicles
- Home Battery Storage
For this article, I’m going to focus on Home Battery Storage because, as much as I believe the other two will have a huge role to play in our lives going forward, it’s my opinion that giving people the ability to store energy in their homes will not only change their relationship with their suppliers but with energy itself. Giving them a greater understanding of their consumption but also showing them the potential that exists within their homes.
One company that’s pushing ahead with this technology is Social Energy who are partnering up with Duracell to create a home energy storage system that they claim would offer large increases in potential earnings for users of this product. Using its cloud-based AI and software platforms, Social Energy’s product allows connected energy storage systems to trade energy and participate in grid-balancing and network services platforms. Social Energy say they are making battery storage commercially viable on a “global scale”. A claim which doesn’t seem so far-fetched when you consider some of the other players in this market. The Tesla Powerwall has been teased since 2015 and looks set to play a huge role in home energy storage in the not too distant future. In development since 2012, the Powerwall and Powerpack are rechargeable energy storage products, the latter for industrial use and the former targeted at the home market,. Developed out of Tesla’s efforts to build larger and more efficient batteries to power their electric vehicles (EVs), the Powerwall is intended to be used for home energy storage and stores electricity for solar self-consumption, time of use load shifting, backup power, and off-the-grid use.
Battery technology has already received keen interest and uptake in deployment as a standalone asset. Currently, the market is split between large front-of-meter projects, making up the majority of the capacity and more commonly, and smaller behind the meter projects which are less vulnerable to any potential fluctuations in revenue stream.
Going even further than that, Social Energy have been bombastic in their expectations as to the potential returns in terms of economic value. “The addition of Demand Side Response and grid services could boost revenue streams available to domestic batteries by as much as 400%,” the company said. Meanwhile, the addition of energy trading capabilities using artificial intelligence software and algorithms coupled to 600 million data points could see homeowner’s energy prices reduce by close to 90%, potentially dropping as low as 1.5 pence per kilowatt-hour.
Storing energy at home is going to give customers a lot more flexibility in choosing when they want to use their energy. At the moment most of us will be on a similar timeline, millions of ovens are turned on between 7pm-8pm, millions of boilers flick on for a few hours in the winter, ditto televisions. These peak-times can often result in higher energy prices whereas households that store their energy could switch to their battery power and save some money.
The risk of domestic and industrial battery storage will go hand in hand with the adoption of EVs, as demonstrated by Nissan and EDF’s recent partnership which will see them explore how second-life Nissan electric vehicle batteries can support demand-side management.
The first joint project will see the partners explore the business case for recycling retired batteries from Nissan LEAF into commercial battery storage. The system would see electricity stored in the batteries and released back to the grid using EDF Energy’s PowerShift to react quickly to demand side response initiatives.
The combined system will be trialled to see how it can support on-site generation, greater control and flexibility over energy use, and provide additional revenue streams.
Storage meets EVs
Already this year, there are more lithium-ion batteries being installed in electric vehicles than into consumer electronics; demand for electric mobility is only expected to increase, equating to millions of used electric vehicle batteries being available for the energy storage market. These batteries have as much as 70% of their original capacity and will still have more than 10 years of remaining life.
When you consider how nicely home storage batteries dovetail with the emerging electric vehicle market, not to mention other innovations such as AI and blockchain there is no doubt in my mind that our homes in the next 10 years will feature home storage devices as standard. I also think that we will see traditional energy suppliers evolving into post-supply offerings as well. Much in the same way that British Gas have manufacturing partners for Smart Meters, I believe they will come to have partners for home storage batteries too.
This not too distant future is full of promise, not only for better savings for customers but increased revenue through variable streams for suppliers. Perhaps most important is the impact these innovations could come to have on the environment.
It was recently suggested to me that within 5 years all energy being supplied will be “green energy”. A quicker uptake on home storage behaviours as well as the supporting technology could see us achieve that goal sooner rather than later.
Image Credit: Syd Mead
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