Simon Hackett: Governments can improve the power grid by saving money

By Simon Hackett (Redflow Limited executive chairman), The Advertiser

NOW is the time for governments to act to reap the full rewards of the renewable energy revolution.

What Australian governments started more than a decade ago with public sector subsidies to kickstart the local photovoltaic solar panel industry is approaching maturity with the advent of affordable batteries for homes and businesses.

But the goal for distributed energy storage systems should not be to replace the electricity grid, but to fulfil it. Although this may require regulatory and operational changes, it is eminently achievable.

At the moment, we have a top-down energy supply system. Electricity is poured into the system from the top by large power generators and distributed via networks to business and private consumers.

While an increasing number of these consumers generate their own electricity through solar panels or wind turbines, these renewable energy sources suffer the problem of intermittency. When the sun disappears or the wind ceases, the power supply stops.

Batteries can solve that problem. Just as water tanks store surplus rainwater for a sunny day, batteries store electricity from the daytime until it is needed at night.

But the deeper significance is that widespread distribution of batteries storing PV generated energy can create a great new resource for making the current power grid even more resilient.

Rather than relying on gas powered peaking generators to meet short-term demand spikes, electricity suppliers could purchase surplus energy from battery owners - creating a 'virtual' energy generator.

Instead of driving up power costs by building capital-intensive power stations and consuming costly fossil fuels to meet brief peak demand periods, this would have the long-term effect of driving down electricity costs.

What governments can do to bring on this brave new lower-carbon world is encourage consumers to trade in their long-running generous solar feed-in tariffs for an immediate subsidy on a battery.

This lets the government eliminate a costly long-term liability by spending already committed funds to encourage the deployment of batteries that can make our power grid more resilient and affordable.

It's a win for the government, the taxpayer and the community.

Simon Hackett has a more detailed explanation of this proposal on his blog.