When the UK power cuts arrive, they will hit at around 4.30pm on midweek evenings in December and January. A region of the country will be disconnected for two or three hours until demands starts to fall after the early evening peak. But, in theory, excess power from domestic PV installations that would otherwise be spilled onto the grid could be mopped up by storage batteries. Can electricity stored in these domestic battery systems make these power cuts less likely? And can householders insulate themselves from the impact of electricity outages by buying a storage system? Or are batteries too expensive to make it worthwhile?
To make a substantial difference to the likelihood of power cuts, batteries would need to supply perhaps half a gigawatt of power for three hours. That’s about 1% of UK peak winter demand. This means batteries in 500,000 homes (2% of UK total) each delivering 1 kilowatt. We’re some years, possibly some decades, away from this. But pessimism shouldn’t be overdone; the UK already has 500,000 PV equipped houses, almost all of which were installed within the last five years. In other words, if the incentives are right, half a million homes will quickly take on a new technology. And a battery pack is a lot easier to fit than PV panels. However, at today's battery prices, we're not at the point where the financial returns obviously justify the investment.
The economics of PV storage.
Battery systems are still costly. The European market leader, German company Sonnenbatterie, markets a 4.5 kWh battery at €5,900 plus sales tax. In the UK, that would mean a price of about £1,300 per kilowatt hour of storage. The innovative UK company Moixa is just starting to sell its Maslow system for about £2,000 for 2 kWh, or about £1,000 per kilowatt hour. Does this make financial sense to buy one?
It depends. Judged as an investment that stops PV electricity from being exported and stored instead until the sun goes down, a battery system still looks a poor idea. But if you really value the security of knowing that your lights won’t go out, you may think differently. And, one day, the battery owner may be able to claim some benefit from the value to the whole electricity system of suppressing peak demand. This would improve the economics, possibly substantially.
We’ll look first at how much an owner of a Moixa system might save, or indeed the batteries produced by London start-up PowerVault. This calculation requires us to make some rough approximations based on the monthly production of a 4 kW system in a sunny part of the UK. (With many thanks indeed to Pilgrim Beart of 1248 and Gage Williams for giving me their very detailed data so that I could make these approximations).
|Average daily output of 4 kW domestic PV system (kWH)||Average daily amount of electricity spilled to grid (kWh)||Estimated average amount of power that would be stored each day by a 2 kWh battery system (kWh)|
|Four summer months||20||12||1.8|
|Four shoulder months||10||5||1.4|
|Four winter months||3||0.5||0.4|
(Notes: why – if the average summer export is 12 kWh – would the battery typically store only 1.8 kWh and not 2? Because on a small number of days the overnight power use wouldn’t be enough to fully discharge the battery and, also on a small number of days very cloudy conditions would mean that the surplus export wouldn’t be the full 2 kWh.)
Over the course of the typical year, a 2kWh battery system in a home with 4 kW of PV will therefore store and discharge an average of about 1.2 kWh a day. It might be 1.0 or 1.4, but it’s definitely not 2, or even close.
What is 1.2 kWh a day worth? At a price of 13p a kilowatt hour, this is just less than £60 a year. If you bought the neat little Moixa system, costing about £2,000, the direct return would be 3% before thinking about the depreciation of the batteries. Unless power prices shoot up, the batteries will never pay back the investment. In southern Germany, the economics would be a bit better for the Sonnenbatterie device. Sun is more equally distributed over the year and power prices are not far off double those of the UK.
But what about the value as a spare power supply in the event of a power cut? We need to be a bit careful here. The Moixa battery pack definitely isn’t a conventional emergency power supply (or UPS in the technical language). If the grid goes down, the Moixa system will not pump an alternative source of 240 V AC current into the house’s wiring circuit. The reason is that Moixa doesn’t incorporate the expensive relay that isolates the grid from the house in the event of a power cut.
However what Moixa can do is continue to operate a separate DC circuit that powers, for example, lights, computers and phones. The company told me of one installation in an office that suffers frequent power cuts and has but a simple new wiring circuit in place that allows employees to continue working when the electricity is off. I suspect that in these circumstance the batteries have a value that easily exceeds their cost. Homeowners worried about general power cuts could also see a huge value in knowing that the lights would stay on in their home.
The sharp decline in battery prices, and the development of several new battery chemistries, such as Zinc/Air, will mean that the price of storage packs for homes and business will fall sharply over the next few years. Moixa targets a retail price of £1,000 for its 2 kWh battery by the end of 2017, based on a battery price of around $150 a kilowatt hour by that date. (Tesla, and possibly many other battery manufacturers, will be delivering at about this cost or less).
The German Sonnenbatterie will be in an even better position because of the higher local power prices. This company has already sold 3,000 systems across Europe and is now pushing into the US where backup power is more valuable because of the growing unreliability of many local grids. In addition, of course, in hot countries peak electricity use coincides well with peak PV output, unlike in the UK. So more electricity will typically be stored and discharged each day in California than it would be in Britain with the same battery system.
Sonnenbatterie is a much more sophisticated device than the Moixa pack. It can cut the house off from the grid and appears to be able to offer AC power to the home when mains power is off. This means, for example, that heating systems will continue to work as well as lights and communications. But it is much bigger than Moixa’s product meaning it would work less well in crowded UK homes. In addition, it would only store and discharge slightly more than a Moixa over the course of a year because of the relatively low nighttime summer use of electricity. A Sonnenbatterie that had been filled during a July day wouldn’t be fully utilised in the ten hours before starting to charge again. Pilgrim Beart from telemetry company 1248.io estimates that the financially rational UK householder should buy a battery of no more than 2-3 kWh because of this problem.
What about the value to the wider electricity system of domestic battery supplies?
If large numbers of households had fully charged battery packs that could discharge in to the grid when needed, it would help avoid power cuts. You could view Moixa or Sonnebatterie installations as part of the ‘capacity market’. Participants in the capacity market agree to keep their generating plant ready to operate at times of high demand and are paid for making this commitment. Prices aren’t clear yet but it looks like about £60 per kilowatt per year.
DECC is also offering a pilot scheme that pays businesses to reduce their demand at times of highest demand and so ‘shaving the peak’ of electricity need. A battery is a peak demand reduction device and could claim DECC’s fees for this trial. These early experiments are going to be paid more, possibly up to £300 a kilowatt of reduced electricity use. This makes a battery potentially much more lucrative if it could be reliably offered.
The problem is this: if the battery’s function is to store PV power for evening use, its output is likely to be very low indeed in those winter months when outages are likely. The table above suggests that actual storage in UK conditions is likely to be below 0.5 kWh in deepest winter. Even if a clever system aggregated thousands of batteries together, domestic batteries aren’t really able to make much difference in December.
Unless, that is, they become much more sophisticated and can predict the weather and soak up surplus power the previous night if the sun isn’t going to fill them during the day. A domestic battery in dark mid-winter that bought power at 4am and then used it at 5pm the following afternoon would have substantial value to the grid when hundreds of thousands were aggregated. This isn’t something that is going to happen soon.
However it might make financial sense for a business that pays fees for its peak electricity use. Suppliers add an amount to commercial bills that depends on usage in the half hours of maximum demand. It’s a penalty for requiring the local operator and the electricity generators to have this peak amount of electricity available to provide for the businesses’ need. The earliest users of batteries may well be businesses that want to reduce what are called ‘triad’ payments at peak demand times of the year as well as storing electricity from PV over the summer.
Sonnenbatterie in Germany is now raising its next round of about €7m of capital from investors. Even this company, one of the most highly regarded European cleantech companies, has to trawl round investor conferences to make its pitch. (Contrast this with the frankly ephemeral social media companies that are valued at billions and are besieged by those wanting to buy their shares).
Domestic batteries placed at the edge of the electricity grid probably are a vital part of the energy future but the economics are still far from overwhelmingly attractive. Another reason to hope that Tesla’s investment in enormous battery factories or EOS’s exciting zinc/air cells will bring the price of storage down to the totemic $100 per kilowatt hour at large scale. Then we'll all be buying batteries to use our spare electricity.
 The Moixa pack can only deliver about 400 watts so it is only lower power devices that can be put on a separate DC circuit. You can buy DC fridges but you probably wouldn’t want to use one because your lights would go out.