How Will Subscribers Benefit From Our Community Battery

Our scheme is still in development but there are some basic principles that we are trying to harness to deliver cheaper energy for our potential subscribers.

How much of your power bill is actual energy?

Energy Retailer’s bills are made up of a number of elements:

• Network access fees - levied by the likes of distributors such as Ausgrid for access to their networks – usually charged on a daily basis

• Energy “transport” costs or tariffs for moving energy along the poles and wires infrastructure to your metering point. These are charged volumetrically ie per Kilowatt hour.

• Metering or meter conversion fees where applicable

• Rolled up in the tariff cost are State and Federal environmental fees that support prevailing energy programs

• Retailer commercial margins – for provision of the full suite of customer services, such as billing, managing concessions, and hardship provisions. Also included are any costs associated with “market hedging” or insuring against fluctuating costs in the wholesale energy market.

• Solar feed-in credits for solar rooftop customers

• And lastly, the actual cost of the energy.

  
  

On balance, the actual energy cost component of your electricity bill may be as low as 35 - 40%.

(Graphic courtesy of solarmarket.com.au)

Network Tariff Savings

The energy network operates on a number of levels.

• The very high voltage pylons and lines that move energy long distances from big generators like the old fossil plants, or hydro and wind schemes.

• Intermediate voltage lines in the regional networks.

• Local distribution lines for groups of suburbs connected to a local substation.

  
  

For many years there has been some academic discussion about whether local energy schemes should benefit from only paying that part of the networking cost relevant to local distribution. In the 2024/25 year, Ausgrid for the first time has introduced a discounted tariff called LUOS – Local Use of System. This tariff applies to matched energy flows within the local area below the substation. The discounted rate is substantially below say a normal TOU – Time of Use rate.

In our case, the energy “banked” during the high solar generation hours of the day would benefit consumers through this discounting when consumed during the evening peak demand period.

Using the Battery as a Hedge Against Fluctuating Energy Costs

The NEM – National Energy Market (the East Coast) is a dynamic beast with energy players offering and bidding in blocks of time from 5 minutes to 30 minutes. Prices fluctuate in daily cycles reflecting available supply and demand. With the wide uptake of rooftop solar, the daylight hours are often characterized by high supply, and consequently low market prices. It is not uncommon to see very low, or even negative energy prices in the NEM – where generators of all kinds are paying market operators to take their power. Of course, most residential energy consumers never see negative power bills because Retailers smooth the highs and lows to deliver an even price offering.

Community battery operators of sufficient scale have the ability to fill the battery at opportune times during the low price part of the daily cycle, and return the energy to consumers when needed in the evening.

Similarly, there is a second low point in the cycle of prices overnight that can be used to derive benefit in a similar way.

Coming Up With an Economically Sustainable Battery Operating Model

The power bill benefits described above rely on having a big piece of expensive battery kit operated and controlled by a community group such as ours.

Obviously, a battery costing some millions of dollars needs to be financed and operated in a sustainable way. Depending on how the battery is financed, there will of necessity be some form of subscription cost for connected consumers, but we aim to keep these as low as possible and way below the cost of a home battery in terms of cost per kilowatt hour stored. Network operators like Ausgrid see value in large batteries for the stability they bring to the network and there a number of concessions and rewards that apply, and these can assist us with operating costs.

Our group continues to work toward developing a novel scheme involving battery operation and market participation for the benefit of our connected community.