The energy industry is gearing up for a battery storage boom throughout the remainder of , driven by state and federal government incentives, declining battery unit costs and falling feed-in tariffs.
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According to the newly released SunWiz Annual Battery Market Report, 72,500 battery installations were recorded in – a huge 27% increase on the previous year.
With so many businesses now considering investing in battery storage, we asked Flow Power’s battery specialists to help answer some of the most frequently asked questions.
To learn how a battery can reduce your bills, first you need to understand how Australia’s wholesale electricity market works. All electricity passing through our interconnected electricity network (often referred to as ‘the grid’) is bought and sold in the wholesale market, where prices are set every 5 minutes based on supply and demand. Learn more
Batteries can help businesses cut costs by storing energy when prices in the grid are low, typically when there’s lots of renewable energy generated. Australia’s growing rooftop solar capacity is a key driver of these low wholesale prices in the market.
This low-cost energy can be stored, and later used when prices are high, helping businesses reduce usage from the grid during price spikes. High prices typically coincide with periods when thermal generators, like coal, make up a higher proportion of the grid fuel mix in order to meet demand.
To get the greatest potential for cost savings from a battery, businesses should consider electricity contracts with wholesale market exposure – like any of our contracts at Flow Power.
Wholesale price fluctuations can lead to significantly greater savings from a behind-the-meter battery when compared to savings on a flat rate or peak and off-peak tariff, because they link your business to the real-time price of electricity. Low and negative prices in the market are typically inaccessible on a standard electricity contract, meaning you could be losing out on potential savings.
Flow Power’s team of Engineers and Data Scientists have designed smart technology to help optimise your battery’s charge/discharge schedule and maximise your business’ potential energy bill savings.
There’s no one-size-fits-all when it comes to batteries, and the size and configuration of your system will depend on your business’ goals and usage.
You can start by looking at your recent electricity bills to understand your average daily consumption.
Then, consider your goals:
Your recent energy behaviour and your future goals will help determine the ideal battery size.
Once you have a rough idea of these factors, it’s important to factor in your budget and space constraints. Larger batteries will cost more and require more space, so finding a balance between your energy needs, budget and intended installation area is key.
The easiest way to ensure you select the right size for your business is to consult an expert. Flow Power’s solar and battery team can analyse your usage patterns, energy goals and site specifics to help choose the optimal battery size for your business.
Batteries can be used with, or as an alternative to, a generator to back up your whole site, or critical loads and electrical circuits that are sensitive to power outages.
When choosing the size of your battery, this will be a key consideration. We can help you size and configure your battery based on your energy demand, reliability needs and financial constraints.
This includes specifying a control solution that can reserve a portion of your battery day to day, to ensure energy is available in the event of a power outage.
Wondering how battery back up works? Learn more about how we helped Yarra Ranges Council increase energy resilience with battery storage here.
Your business will have access to a monitoring platform via app or web portal showing energy usage, solar production, battery charge level, and grid interaction. This helps you track how your system is working in real time.
There are more than 50 battery brands in the Australian market today, so choosing the right one for your business can be a tough choice. That’s why our team puts in the research and testing to ensure you can feel confident in the choice you make.
At Flow Power, we use and recommend 3 trusted brands, chosen for their high-quality battery cell technology, comprehensive warranties and trusted local support. However, our team is technology and brand agnostic meaning we can work with any existing battery systems or preferences your business may have.
Warranty periods will depend on system sizes and brands.
For larger systems (greater than 2 MWh), it’s possible in some cases to get extended 20-year warranties.
For most smaller systems for businesses (between 50 – 500 kWh), warranties are typically 10 years or 10,000 cycles with batteries typically completing one full charge/discharge cycle per day.
We typically model batteries over 15 years to remain conservative, calculating the specific degradation of units over time. This is based on specifications from the manufacturers and is calculated for each unit’s given cycling conditions.
There are many state incentives available to support investment in batteries, which can be paired with the upcoming Cheaper Home Batteries Program launching Australia-wide on July 1 .
Existing state and territory schemes in the NEM include:
Goto Wirentech to know more.
It’s not essential to install a solar system before, or with a battery (unless you’re planning on applying for a rebate via the Cheaper Home Batteries Program).
Batteries can be installed as standalone systems, but we recommend switching to an electricity contract with a link to wholesale market pricing to get maximum benefit from your system.
On a Flow Power contract, your battery can charge with low-cost energy from the grid (typically when the fuel mix is more renewable) and discharge during peak periods, to reduce demand charges and help you save money.
However, if you have high daytime demand and network charges, or if you would like extended reliability in the event of a power outage, having solar installed alongside your battery system can be helpful. (We talk about this in more detail in our recent Battery Storage for Schools webinar – click here to watch it now.)
Battery systems are typically low maintenance under normal operation. However, we recommend periodic inspections, software updates if required and ongoing servicing if issues arise. This ensures the battery system remains safe, efficient and reliable.
If you purchase a battery with Flow Power, we will monitor the ongoing health of your system, ensuring you prolong its lifespan and maximise value from your investment.
Many businesses are now switching to batteries in place of generators to use as a backup asset. Batteries are quieter, cleaner, more cost-efficient to run and require less hands-on servicing than typical generators, making them an appealing alternative.
The method and assumptions we use to invest in our own grid-scale battery assets is the same method we use for Flow Power customers.
So, while we can’t predict the future, we’re confident that we do everything possible to comprehensively analyse battery revenues for your business.
We’re here to help.
Get in touch with our team of experts today.
These three questions share a common theme—batteries are complex assets. But complexity doesn’t have to be a roadblock. Industry leaders understand that small operational changes are often the difference between an average-performing asset and one that outperforms its projections.
Battery data, when combined with powerful cloud computing, has been proven time and time again to give BESS operators the insights needed to get the most value from their assets.
When the demand for energy is high, it’s critical your battery energy storage system (BESS) is available; otherwise, reaching revenue targets is likely a pipe dream. The research firm Modo Energy found that in , the ERCOT territory saw 50% of revenues coming from 50 days of the year1. If your BESS is not operating at capacity during one of those peak days, it will significantly affect your bottom line.
One problem that we see far too often is battery modules not behaving as the datasheet says they should. For example, a battery management system (BMS) might lower the charge current to a smaller value than specified, leaving the system with longer charging times. Another common occurrence is a battery system that works flawlessly in a colder climate might struggle in a hot and humid environment, despite what the datasheet indicates.
The real world doesn’t always reflect what the datasheet says. Underperforming assets can have a significant negative effect on the profitability of the system.
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Ensuring that the storage system complies with intentionally restrictive warranties can be challenging. Most battery warranties include detailed instructions outlining the conditions for maintaining the warranty's validity. For example, a typical warranty might specify that a battery can only be stored four hours per day above 95% State of Charge (SOC). Or the coverage might be reduced for each hour the battery is above a certain temperature threshold.
The restrictions often seem limitless to asset operators. These guidelines differ for every battery supplier and even between products or product generations.
The reason: warranty documents are specifically designed to reduce the battery manufacturer’s liability.
Unfortunately, many operators are unclear if their warranty is still valid or even how this should be evaluated. Companies that don't verify battery performance while actively managing warranties are very likely missing out on achieving the value of their assets.
More: Unlock Untapped Value in your Battery Warranties
This might be the most challenging question of the three. If you listen to battery manufacturers, the answer will likely be in the range of 12-15 years. However, degradation rates and the lifespan of BESS hinge on usage factors such as frequency, depth of discharge, and operational requirements. Not to mention, additional considerations like battery chemistries and temperature.
Depending on your role, battery lifetime uncertainty probably drives some level of apprehension. Will my batteries last as long as we have planned? When one prominent energy storage executive was asked about the industry’s degradation strategy, his response was simply, “Most owners are going to run their batteries into the ground. The only concern is for the market and making money. They are surprised later when the batteries don’t last as long as expected—fingers get pointed.” Unfortunately, this philosophy is the norm and not an outlier.
Managing the total cost of ownership (TCO) of a battery energy storage system is a balancing act. To optimize the TCO, it’s imperative to integrate the degradation costs associated with different cycles into the operational equation. This is where the concept of a digital twin emerges as a powerful tool. By replicating the physical system in a virtual environment, you can track and consolidate cycle costs across systems. This opens avenues for a more nuanced understanding of how each cycle impacts the overall health of the energy storage system.
Armed with this knowledge, the operation becomes a dynamic process, fine-tuned to extract the maximum total value from the asset. It's an approach that transcends the traditional focus on income generation and shifts the paradigm to a holistic consideration of the entire asset life cycle, factoring in both the economic benefits and the inevitable costs associated with aging and augmentation.
1 Modo Energy, The Landscape for ERCOT BESS
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