News Update - June 2022

Round 2 of the Neigbourhood Batteries Initiative grant program opened on 6 June 2022.

For all the details and how to apply, visit New Energy Technologies


Public Consultation Report now available

We asked you to share your perspective and experiences about the role of neighbourhood batteries in your community. Here are some insights:

  • Over 1,000 visitors to the site
  • 350 surveys completed
  • 90% of community respondents in favour of participating in a neighbourhood battery trial
  • Industry responses featured community energy groups, local government, energy professionals, electricity retailers, Distribution Network Service Providers (DNSPs) and peak bodies.

Top things industry agreed on:

  • Different neighbourhood battery models need to be tested and supported;
  • Knowledge sharing is essential; and
  • Regulatory and other barriers to neighbourhood battery deployment needs to be addressed.

Check out the full report to read more of what we heard at Engage Victoria: Neighbourhood Battery Initiative Industry and Community Consultation Report

What are neighbourhood batteries?

Neighbourhood batteries (or community batteries) are an energy storage model that have the potential to provide multiple benefits to consumers, communities and the electricity system.

Neighbourhood-scale batteries are bigger than household solar batteries. Typical household solar batteries have a power capacity up to about 10 kilowatts (kW), while neighbourhood-scale batteries range from 100 kW to five megawatts (MW).

Typically, neighbourhood batteries are connected ‘in front of the meter’ to the electricity distribution network, rather than ‘behind the meter’ like household batteries. A neighbourhood battery would usually be located close to where electricity is being both consumed by homes and generated from rooftop solar.

Neighbourhood batteries can be owned by electricity distribution businesses or third parties such as community energy groups, electricity retailers, aggregators and private investors. The potential benefits a neighbourhood battery can provide, who benefits, and the value streams accessed by the battery depend on who it is owned by and how it is operated.

This image shows three pictures of a neighbourhood battery installation in Australia.

Three examples of what neighbourhood batteries look like. The first battery (left) is an artist’s impression of the Yarra Energy Foundation’s neighbourhood-scale battery – the Yarra Energy Storage Service (Source: Yarra Energy Foundation 2021, VIC). The second battery (middle) has been installed in Black Rock by United Energy (Source: United Energy 2021, VIC). The third battery (right) has been installed in Western Power's network in Western Australia (Source: Western Power 2021, WA).

Why neighbourhood batteries?

Depending upon the model used to operate the neighbourhood battery, it can provide a range of social, economic, and technical benefits, including:

A visual representation of some of the network and consumer benefits provided by neighbourhood batteries

Supporting solar integration

Neighbourhood batteries enable the network to support more rooftop solar by storing solar generated electricity during the day and discharging it during the evenings when demand is highest. This enables consumers to generate and consume more renewable energy locally and supports Victoria’s greenhouse gas emissions and renewable energy targets.

Network support

Neighbourhood batteries can be operated to help avoid expensive network upgrades by better managing electricity network conditions. This enables all consumers to save on bills through lower network charges.

Market Services

Neighbourhood batteries can participate in spot price arbitrage in the wholesale electricity market - buying electricity when prices are low and selling when they are high. This puts downward pressure on electricity prices for everyone. They can also provide services that help maintain the security and reliability of the electricity system for energy users.

Reliability in outage-prone areas

Customers in remote, outage-prone locations could benefit from neighbourhood batteries providing backup power and improving reliability of energy supply.

Virtual shared storage service for customers

Some batteries are operated to provide retail storage to customers, allowing them to virtually store excess solar generation in the battery during the day and use it in the evening. This helps expand consumer access to the benefits of storage and can enable non-solar customers to consume more locally-produced renewable energy. Participation in shared storage schemes is often cheaper, more efficient, and more flexible than purchasing a household battery, avoiding installation and maintenance costs, as well as relocation constraints.

ANU’S Battery Storage and Grid Integration Program

ANU’s Battery Storage and Grid Integration Program was established in April 2018. It pioneers pathways for the integration and optimisation of energy storage in electricity grid and markets globally. See the BSGIP website for more information about the program and research. Their video “Community battery renewable energy storage” outlines community batteries and their role in the energy transition.

Neighbourhood battery initiative

Victoria’s neighbourhood battery initiative (NBI) supports trials of a range of neighbourhood battery models in Victoria, from feasibility to implementation. The Initiative will strengthen our understanding of the role neighbourhood scale batteries can play in Victoria’s transitioning electricity system.

The NBI is intended to:

  • support understanding of the full range of benefits that neighbourhood scale batteries can provide
  • help to overcome barriers to the deployment of neighbourhood scale batteries
  • inform regulatory reform
  • determine which methods of neighbourhood scale battery deployment provide the most benefits for the Victorian electricity system
  • support the decarbonisation of Victoria’s electricity system to tackle climate change

DELWP has engaged with energy customers, communities, and industry stakeholders to ensure a broad range of perspectives are heard and considered in the development of funded trials.

A Consultation Paper has been released to seek stakeholder views about the opportunities and challenges associated with neighbourhood scale batteries in Victoria. The Victorian Neighbourhood Batteries Initiatives Consultation Paper is available on the Engage Victoria website and engagement summary will be published in late December 2021.

The Victorian Government has provided $10.92 million for NBI funding, with $3.68 million in grants to 16 community, local council, and industry lead projects across Victoria. You can explore the successful projects below through the interactive map.

Visit the New Energy Technologies page for up to date information about the NBI and future funding initiatives.

Stream one: project development

These projects will build capacity through developing feasibility studies and business cases for neighbourhood battery trial implementation; and/or commission technical, regulatory, legal, or contractual advice or services to support the planning and implementation of a neighbourhood battery.

Stream two: implementation-ready projects

These projects will implement the trial of a neighbourhood scale battery and demonstrate the ability to access multiple value streams.

Interactive map of current NBI projects

Find out more about the current NBI projects:

  1. Zoom into the location you are interested in. Each pin represents a project. Note that exact Stream 1 project locations are being established and are estimated by a town location or the centre of the relevant local government area.
  2. Select the pin to see the following information: Project name, lead organisation, grant stream, further website information and a short project summary.

You can filter NBI projects by their grant stream or use the search function to sort by project name.

General FAQs

What is the difference between household, neighbourhood and large-scale battery energy storage systems?

Battery energy storage systems (BESS) come in many sizes and work at different scales. BESS all use similar battery technologies - utilising chemical processes to store electrical energy for use at a later time. They differ in storage size and coverage but offer similar benefits and services including energy reliability and storage of low-cost energy.

Victorian homes with solar panels can be fitted with a household battery. The battery allows an individual household to store energy generated by their solar panels for later use. They commonly offer between 3-10kW of storage.

Neighbourhood batteries have a capacity of 100kW up to 5MW and can service a neighbourhood of approximately 20-100 households.

Large-scale (also known as utility scale batteries) offer similar functionality as neighbourhood batteries at a much greater scale, with significantly larger capacities up to 300MW (e.g. The Victorian Big Battery). A large number of batteries installed together can act as a large-scale power generator.

Are neighbourhood batteries safe?

Battery installation must comply with the Electrical Safety Act 1998, as well as the following regulations:

  • AS/NZS 3000 Wiring Rules
  • AS/NZS 5139:2019 Electrical Safety (General) Regulations
  • AS/NZS 4771.1:2016 Inverter Installation

Battery product standards must comply with Best Practice Guide: Battery Storage Equipment – Electrical Safety Requirements (2018). Energy Safe Victoria oversees regulation of battery installation and is providing support and guidance to current project proponents.

Who owns and operates neighbourhood batteries?

Understanding the benefits of a range of battery ownership and operational models is a core objective of NBI. ANU’s BSGIP team has undertaken preliminary research in this area and categorised the potential owners of neighbourhood batteries into three groups: retailers, electricity distributors, and third parties (which includes private investors, community groups, local or state governments, or a combination of these groups).

What costs or tariffs are associated with neighbourhood batteries for local customers?

There may be reduced costs for customers in comparison to installation of household battery storage systems. There are no upfront installation costs, maintenance or replacement costs for customers. However, current network tariff arrangements are a disincentive to widespread deployment of neighbourhood-scale batteries in the National Electricity Market (NEM). Energy flows between the customer and battery are charged twice – once when the battery imports energy and again when customers access energy from the battery.

A variety of tariffs and subscription costs are being trailed through the NBI to address the localised transport of energy between customers (for both solar importing and non-solar importing customers). Local Use of System (LUoS) tariffs account for localised flows or the use of the local distribution network. They provide a discounted network tariff as the energy only flows through a localised subregion of the network, compared to the Distribution Use of Service (DUoS) charges which reflect use of the wider distribution network.

A graphic explaining current network charges compared with the incorporation of a local use of system network tariff arrangement.

Illustration of current network charges (conventional) compared with a LUOS network tariff arrangements (ANU BSGIP, 2021)

What do neighbourhood batteries mean for local energy consumers not connected to solar energy?

Some neighbourhood battery models provide non-solar consumers with the opportunity to access energy produced from solar generating households in their local area. This can include renters and those living in apartment blocks. It means local energy consumers (both solar and non-solar) are able to consume a greater proportion of energy generated from a local renewable source.

How do we get started with a neighbourhood battery?

Every neighbourhood battery journey will differ depending upon the group or organisation and the type of ownership and operational model being pursued. DELWP has engaged ANU to prepare Neighbourhood Battery Guidelines which will cover a range of topics including community engagement, consultation, and benefit sharing; ownership structure; customer participation; technical specifications; operation; trialling innovative tariff arrangements and governance.

Learnings from current project proponents and findings from ANU will be used to inform the Guidelines and will also be published on this website to support new groups.

Chris Wallin, Project Manager of Yarra Energy Foundation’s Neighbourhood Battery pilot the Yarra Energy Storage Service (YESS), provides insight into the journey of the YESS in his presentation at the All-Energy Community Battery Panel.

Depending on your resources and priorities, some general advice for how you can get started on your journey to a neighbourhood battery:

  • Agree on the battery's purpose, who will it service, where the benefits will flow, and where could it be located.
  • Engage your local community and key stakeholders (especially DNSP and local council) as early as possible, and define your principles for engagement.
  • Engage an expert project manager who can manage the project from inception to delivery.

Investigate financing options (grants, fundraising, investors, loans, or hybrid model, etc.) Implementing the findings from your feasibility studies, selecting an appropriate site, engaging with the community, and planning the tariff structure should be considered next.

The home stretch involves choosing an appropriate battery system to suit the community and networks’ needs while ensuring cost-effective connection design. Neighbourhood battery journeys continue past the battery installation to the operational phase and as dynamic systems, neighbourhood batteries should continue to adapt to changing social, technological, and economic needs of their communities.

How do we engage the community on neighbourhood batteries?

Ongoing community engagement is essential in understanding the needs and priorities of communities, as well as barriers and challenges they face. Community forums are one option to engage with a diverse range of community members and work towards social inclusion and representation, as well engaging the community through local councils.

Enabling effective communication with communities to support engagement with a battery will depend on ensuring that the needs of a diverse range of community members are identified and targeted, including their levels of energy literacy. Information should also be accessible through a variety of sources.

Development of a community engagement plan that provides engagement objectives, summarises key stakeholders and provides an overview of the demographics of the community, as well as a tool to assess the impacts of engagement will assist with this ongoing process.

Yarra Energy Foundation’s Community Engagement page also provides guidance in this area.

Glossary

Australian Renewable Energy Agency (ARENA)

The Australian Renewable Energy Agency was established by the Australian Government in 2012 to support the global transition to net zero emissions by accelerating the pace of pre-commercial innovation of renewable energy, to the benefit of Australian consumers, business, and workers.

National Electricity Market (NEM)

A wholesale electricity market in which electricity in sold by generators and bought by retailers (who on-sell it to consumers) or large-scale customers. Operates in New South Wales, the Australian Capital Territory, Queensland, South Australia, Tasmania, and Victoria.

Battery Storage and Grid Integration Program (BSGIP)

An initiative at ANU that is undertaking research into battery materials and the development, integration, operation, and optimisation of energy storage in electricity grids, and electricity markets globally. Visit their website here.

In front of the meter

An energy system’s position in relation to an electric meter. Energy systems that are in front of the meter, are integrated into the electricity network and thus require energy utilities (e.g. powerlines) to reach the consumer. In front of the meter systems include utility scale generation, utility scale energy storage, and transmission and distribution units.

Behind the meter

An energy system’s position in relation to an electric meter. Energy systems that are behind the meter sit on a customer’s property or business and are not integrated into the electricity network. Generation and storage are managed within the property and can be utilised without energy utilities (e.g. powerlines). Behind the meter systems can include residential solar, home batteries, and microgrids.

Distribution Network Support Provider (DNSP)

Distribution Network Services Providers, or Distribution Businesses. A business that owns, operates, or controls an electricity distribution network. The distribution network converts high-voltage electricity back to a low voltage for distribution via the infrastructure of poles and wires.

Distributed Energy Resources (DER)

Renewable energy units that are located at houses or businesses to provide customers with power e.g. solar units, battery storage, or electric vehicles and chargers.

Network Tariffs

Transmission Use of System Charge (TUOS), charge levied by transmission network businesses to recover operations and maintenance costs and investment returns on transmission assets.

Distribution Use of System Charge (DUOS), charge levied by distribution network businesses to recover operations and maintenance costs and investment returns on distribution assets.

Local Use of System Charge (LUOS), charge levied by local providers to represent the discounted network costs of local flows.

Battery Energy Storage System (BESS)

Rechargeable battery systems that store energy generated from renewables or grid power. They enable energy systems to have emergency power reserves and enhance energy resilience.

Further information

Want to read more about neighbourhood batteries?

Visit the Australian Renewable Energy Agency’s (ARENA) Knowledge Bank for battery storage for reports, studies, multimedia, and tools that provide guidance and learning to benefit future renewable energy projects.

Visit YEF’s Community Battery Resources Page for a suite of webinars, reports, more FAQs, and news about community batteries and updates about the YESS project.

Visit BSGIP’s page to subscribe to their e-newsletter, and learn more through their projects, publications, and educational videos.

Community events and webinars

Page last updated: 09/06/22