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Potential impacts of residential PV and battery storage on Australia's electricity networks under different tariffs

Young, Sharon, Bruce, Anna, MacGill, Iain
Energy policy 2019 v.128 pp. 616-627
batteries, business enterprises, cost effectiveness, economic impact, electric power industry, electricity, energy, energy resources, households, income, tariffs, wholesale marketing, Australia
Australia has one of the highest penetrations of residential PV in the world and is projected to see substantially more deployment in coming years, with a growing proportion of this being coupled with battery energy storage (BES). Previous analysis of the implications of these residential distributed energy resources (DERs) has tended to focus on the individual private benefits to households that deploy them, their direct technical and revenue impacts on network businesses, or broader electricity industry implications. This paper seeks to quantify the economic impacts of residential PV and BES on electricity network businesses, from residential to wholesale market region level. One key impact is reductions in network business revenues as households purchase less electricity from the grid. However, we also consider the potential savings for network businesses as these PV and BES deployments reduce peak network demand from residential to wholesale market level, a key driver of network investment and hence network business costs. Our findings for the Sydney region suggest that potential network investment cost reductions could even outweigh the loss of revenue. Tariff design will have a key role in ensuring that residential PV and BES deployment offers value both to households as well as network businesses.