Community battery storage and the promise of a just transition

Jack Isherwood

Policymakers can empower communities to contribute to greater energy efficiency and resilience by applying a “just transition” lens to new technologies such as community battery storage.

2 May 2023

Energy reliability and affordability in regional and rural Australia made headlines recently, with the small town of Mullewa in Western Australia nearly losing its only GP due to ongoing power disruptions. This problem has also been highlighted recently by the NSW election and new policy commitments by the Victorian Government which place grid reliability and energy affordability at the centre of the policy agenda.

Indeed, there is now clear policy momentum in both jurisdictions towards greater co-investment with the private sector to accelerate investment in renewable energy, with particular focus placed on expanding energy storage technologies such as batteries and pumped hydro.

While policymakers are focused on medium to longer duration storage, they also recognise that shorter duration and smaller scale storage will play an important role in meeting their legislated net zero targets. This is where community battery storage (CBS) comes into play.

What is community battery storage?

A community battery is located “in front of the meter” and typically has a power capacity ranging from 50 kilowatts to 5 megawatts. The battery is connected to the wider power network, as well as households and other premises within the local area, and is usually located in places with high solar panel concentration.

Importantly, community batteries create value by storing excess energy generated by local rooftop solar panels to provide low-cost energy to the wider community, especially in the evening and during periods of high energy demand or low grid generation. These systems can also perform wider services, such as grid stabilisation and electric vehicle charging and create opportunities for revenue to be shared across the community.

CBS offers several advantages for communities. From an economic perspective, CBS may reduce household energy costs, particularly for households that cannot install solar systems due to cost or space constraints or those renting their homes. Given their superior economies of scale, they also are likely to be a more financially attractive option for a community, rather than installing residential battery storage systems – especially considering recent trends towards imposing export limits on solar production and falling solar feed-in tariffs.

Depending on their financial and ownership models, it may be possible to distribute revenue from CBS to the wider community in the form of a dividend. CBS systems can also generate financial value for a community via participating in market arbitrage, by providing local network stabilisation services, and by delivering power directly to households.

In addition, CBS can reduce reliance on relatively expensive gas or diesel as a grid firming source and +facilitate greater integration of renewable energy sources onto the grid, reducing its carbon intensity, while also improving energy affordability.

CBS can also maintain grid stability by mediating the intermittency of renewable sources of power. This is particularly important in regional, rural and remote areas where poor grid infrastructure is increasingly causing supply issues, as well as at high demand points, such as hospitals, council facilities, schools and military installations. CBS offers several different means of securing grid stability, including by providing voltage support and frequency services.

This problem of stability is also exacerbated by the mounting impacts of climate change, where increased temperature variability is likely to place greater demand on the grid for cooling. In addition, as climate change will increase the frequency and severity of bushfire risks, CBS can help regional and remote communities maintain power supply during emergency situations, facilitating the provision of essential services.

Applying a “just transition” lens to building CBS

Despite the upsides of CBS, there are a host of significant barriers. For instance, while CBS systems are financially viable on current policy settings, there are still significant regulatory and technical barriers that impede them. In addition, there is a lack of skilled labour to significantly uplift the penetration of these systems onto the grid.

However, a surprisingly neglected aspect of the CBS debate is the need to integrate “just transition” principles into their design, implementation and maintenance. A transitional justice lens is beneficial because it encompasses the ideal processes through which these projects should be delivered, as well as the ideal outcomes that community battery systems ought to deliver to communities. While there are differing definitions of a just transition, some common elements include:

  1. A focus on enabling communities to exercise control and autonomy in processes of structural transformation, which respects their needs, values, perspectives and interests.
  2. A focus on achieving outcomes that improve economic diversification, improved employment prospects and high-quality jobs or livelihoods
  3. A focus on improving community social capital and resilience in the face of a changing world.

There are several relevant transitional principles at stake with CBS projects. First, there is a need to ensure genuine capacity building and empowerment. Investments are required in relevant education and training programs so that community members understand the technical, regulatory and financial dimensions of proposed projects, so that they are able to make informed decisions about whether proposed projects offer a fair distribution of risks and benefits. Communities also need to understand the proposed design, implementation, and maintenance of a proposed project, so that they can ensure that their needs and preferences are met.

Practically speaking, this may involve developing public awareness and outreach campaigns which inform community members about the benefits and risks of CBS projects, and the role that they could play in the wider energy transition. It may also involve utilising different community engagement strategies, such as focus groups and surveys, to map out community assets and needs.

In addition, it might mean organising regular workshops and training sessions which develop participants’ technical knowledge of community battery storage systems and their skills in regulatory compliance, project management and governance. These workshops could be facilitated through partnerships with higher education institutions, NGOs, industry experts and thinktanks which have experience in community engagement.

Second, there needs to be processes for accountability and transparency in the design, construction, and maintenance stages of a project. Communities need to be involved in designing the governance frameworks and processes, and need to be provided with appropriate resources so that they can participate in ongoing oversight of a project. Special attention to governance design will be required so that marginalised groups are genuinely included, and that the diversity of the community is represented, with particular focus needing to be placed on the inclusion of First Nations people. Creating appropriate advisory bodies or working groups and establishing clear roles and responsibilities can help achieve this goal.

In addition, regular forums are needed where different stakeholders can collaborate and exchange perspectives. These forums would promote accountability and transparency by offering an opportunity to share information about project progress, and to facilitate participatory decision-making throughout its different stages. These forums could also be used as a conflict resolution mechanism and could draw on the expertise of neutral third-party mediation services.

Considering the broader policy environment

The outcomes of CBS projects must also meet community needs and aspirations. Transitional justice principles of resilience and equitable re-distribution apply here.

Resilience is vital to CBS programs in rural and regional areas given that their design, installation and maintenance will require significant investment in education, training and skills development in light of well-documented skills shortages in the renewables sector. Public policy could facilitate local economic development by offering financial incentives for local community members to retrain, such as the provision of scholarships, grants and subsidised loans to cover educational costs.

In addition, governments could also support local skills development by partnering with educational institutions to design courses which are tailored to the unique needs of regional, rural and remote communities. Courses could be delivered in innovative ways, using block mode and by offering blended or online delivery options, and could be co-designed with local communities and industry partners, following Partnership Pedagogy and Work Integrated Learning approaches.

Another crucial aspect of resilience to consider is how CBS could support wider economic development in regional and remote areas. While the initial build of battery storage and solar systems will generate significant economic activity, it is widely acknowledged that the maintenance phase of projects will require less ongoing employment.

Consequently, policymakers need to consider how these projects fit alongside other economic resilience projects, such as improving economic diversification and physical and social infrastructure. There may be opportunities to improve resilience by linking CBS projects with investments in addressing mobile blackspots or improving internet access and quality. Alternatively, community battery storage could be used as a tool to reduce operating costs for community services, such as community centres, libraries and sporting facilities.

There are also opportunities for the application of CBS to agriculture – for instance, accelerating the uptake of electric farming vehicles and machinery, reducing the carbon intensity of agriculture and reducing farming fuel costs. It could also potentially be used to reduce costs for water pumping, irrigation and the running of greenhouses or cold storage units. By improving grid reliability and reducing energy costs, CBS could ultimately free up resources for investment in innovations in farming operations which will be essential to meeting an expected 60 percent increase in agricultural output by 2050 to feed the planet’s growing population. Moreover, given that regional and rural communities will be disproportionately impacted by climate change, CBS should also be integrated into wider climate resilience policies. For example, network operators are already investing in battery storage solutions in the aftermath of the 2019-20 Black Summer fires to help maintain reliable power during climate related emergencies such as floods, storms and bushfires.

CBS could also fortify energy supplies to essential emergency services, such as community shelters, hospitals and communication networks. More broadly, CBS could contribute to climate resilience by building social capital and knowledge of climate change impacts, facilitating improved emergency preparation and successful implementation of other climate mitigation and adaption efforts.

Finally, CBS aligns with the just transition principle of equitable re-distribution. This is because it can contribute to the significant problem of energy poverty in regional and rural areas by reducing household energy costs. From a policy perspective, there are opportunities to align CBS with existing financial incentives to install rooftop solar systems, given that their installation enables greater uptake of solar energy onto the grid. CBS could also act as a hedge against energy price volatility, a problem illustrated by Russia’s ongoing invasion of Ukraine. CBS could also be introduced alongside policies to improve energy efficiency and energy affordability, such as by subsiding improved insulation, energy efficient appliances and heating and cooling systems.

The policy and political potential of a just transition

While there are several financial, technical and regulatory issues yet to be resolved, it is likely that CBS systems will rapidly expand over coming decades. However, without applying a transitional justice lens to their design, implementation and maintenance, they are more likely to fail to secure community support and are less likely to meet the distinctive needs of rural and regional communities in a changing world. A just transition lens allows policymakers to better integrate CBS projects with wider sustainability and climate change adaptation and mitigation policies. Given the electoral appetite for greater action on climate change, and mounting concerns around grid reliability and cost of living pressures, CBS is a highly attractive solution to address these challenges, empowering rural and regional communities to take charge of their futures. With the CSIRO estimating that the National Electricity Market will require a 10-14 fold increase in storage capacity between 2025 and 2050, there is clearly no time to waste.

Dr Jack Isherwood is a Research Associate at the James Martin Institute for Public Policy, joining the Institute from Western Sydney University, The College in 2023. He has a PhD in Political and Social Thought from the Australian Catholic University on the topic of civil discourse and civil disobedience. He is currently completing a Master of Public Policy at Sydney University, and has research interests in climate adaption and mitigation, higher education policy, and the management of ‘black swan’ and ‘grey rhino’ scenarios. Alongside his work at JMI, Jack manages short online courses at Western Sydney University, The College.

Image credit: Cindy Shebley/Getty Images Signature


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