Electrical Connection Summer 2016

www. e l e c t r i c a l c o n n e c t i o n . c om . a u

their FIT in return for funding them to

buy a home energy storage system. This

would have the dual benefit of eliminating

this long-term liability for governments

while kickstarting a home energy storage

industry in Australia – all using money that

they have already ‘spent’.

The remaining forward liability for a

given customer can be easily estimated

based on past subsidy payment patterns.

In many cases, governments may actually

spend less to subsidise a battery today

than to fund the long-running forward

liability of the FIT for the next 12 years.

The time is right for this sort of

innovative thinking. Over the past year,

Australia has emerged as a global battery

testing ground because of its widespread

deployment of solar panels and high

electricity costs.

Competition in the energy storage

sector is now creating a wider range of

choices and driving down prices. Global

companies such as Tesla, LG, Panasonic

and Enphase have entered the market

with lithium-based batteries, which are

based on an energy storage chemistry

developed for portable electronics such as

notebook computers and mobile phones

and, most recently, electric vehicles.

Australia also has its own horse

in this race in the form of Redflow

Limited, an ASX-listed company of

which I am CEO, executive chairman

and the largest shareholder. Brisbane-

based Redflow has developed the

world’s smallest flow battery, an

alternative chemistry to lithium-based

batteries, which offers compelling

advantages for on-grid and off-grid

stationary energy storage applications.

Redflow’s Australian-developed

zinc-bromine flow batteries are already

deployed in Australia, Africa, Asia, America

and Europe. Earlier this year, Redflow

launched its ZCell energy storage system

for the residential sector.

This activity shows that Australia

is entering the second phase of the

renewable energy revolution. The first

phase – which saw solar panels and

wind farms appear nationwide – had one

significant limitation – intermittency. The

sun doesn’t shine all the time nor does the

wind always blow.

The second phase of the renewable

energy revolution will bring widespread

deployment of batteries that will allow

renewably-sourced energy – specifically

wind and solar – to be stored and supplied

when it is required.

By solving the problem of intermittency,

energy storage systems will enable wind

and solar generated energy to become

available 24/7. This will create a viable

path for Australia to meet its renewable

energy targets by replacing fossil fuel-

powered baseload energy generators with

renewable energy stored in batteries.

This creates an enormous opportunity

for Australia at a number of levels – from

consumers and electrical contractors

to energy utilities and the Federal

Government. The solar FIT buyout

concept has generated significant

interest in the Australian renewable

energy sector and, according to media

reports, is being considered by the

Queensland Government.

When you look at the cascading levels

of benefits delivered by energy storage,

it’s easy to see why this proposal is

gaining widespread attention. Just as

with solar incentives, a solar FIT buyout

will prove politically popular with citizens

who increasingly regard home batteries

as a way to reduce electricity costs and

increase their energy independence.

For electrical contractors, energy

storage systems offer a ‘second breath’

for an industry that has grown strongly on

the back of installing solar panels. While

demand for solar installation remains

robust, growth has slowed considerably

since its peak in 2012 and 2013, when it

was fuelled by the availability of attractive

solar FITs.

Repurposing this same FIT expenditure

to encourage energy storage uptake will

support industry growth and build a wider

range of skills and experience in an area of

world-leading innovation.

This proposal has the virtue of re-using

funds previously committed to kickstarting

the PV solar panel sector to encourage the

emerging energy storage sector – with

associated jobs and business growth.

Widespread energy storage will also

benefit far-sighted electricity companies

by reducing demand during peak power

usage periods and giving them the

potential to buy home-stored energy as a

‘virtual’ on-demand power source rather

than relying on fossil fuel-driven peaking

gas generators.

Nationally, widespread energy storage,

both at the consumer level and the

grid scale, will help Australia achieve

its international carbon reduction

commitments by time-shifting renewable

energy so it can be used 24/7, not just

when the wind is blowing or when the sun

is shining.

So there is a compelling case at each of

these levels for state governments to buy

back existing long-term solar FIT liabilities

with an immediate incentive to buy and

install home batteries – which in many

cases will save these governments money.

Even consumers in those states,

such as NSW, which are terminating

generous FIT schemes in the near

future, can benefit from such a buyback

scheme. By encouraging battery uptake,

the buyout program will create greater

competition and drive down prices

throughout the country.

Swapping solar FITs for home battery

installations is not just a win-win: It’s the

gift that keeps on giving.

Simon Hackett is chief executive and

executive chairman of ASX-listed Australian

battery company Redflow Limited, which

has developed the world’s smallest flow

battery. Simon, a technology entrepreneur

who invests in innovative Australian

businesses, sold Internode in 2012 and

subsequently served as a director for iiNet

and NBN Co. Visit