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On-grid domestic battery storage

edited 30 November -1 at 12:00AM in Green & Ethical MoneySaving
1.9K replies 202.2K views
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  • Martyn1981Martyn1981 Forumite
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    TrevorL wrote: »

    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low.

    Firstly let me make it clear in case it's not evident from the thread, that I'm a huge fan of storage, and believe in its future very much.

    However ...... (you knew there'd be a but didn't you) ...... it's not as simple as that regarding E7.

    Looking at your batt prices, let me suggest a slightly favourable £5k for 10kWh, just as an example. Now, assuming a 10kWh use for the 6,000 cycles, that means a throughput of 60,000kWh's.

    So the cost of cycling 1kWh of leccy is approx £5,000 / 60,000kWh = 8.33p/kWh. Add that to the price of the E7 and you have a unit price of approx 15p/kWh, or to put it another way, no benefit at all.

    Of course it's not that simple:

    I'm very optimistic that the number of warranted cycles will rise (I can't use un-warranted cycle estimates at this stage as batts are too much of an un-known still, and the investment cost is too high to 'take a punt')

    I'm running figures at a 100% efficiency, which the batts won't have.

    I'm assuming E7 will continue and prices will remain low, but it was created primarily to find a market for nightime nuclear generation, but that may be fine with night time wind generation, but could be impacted by increased demand from EV charging.


    Again, I'm not knocking batts, but as Zeup has pointed out, we need prices to fall, and i believe we need the other side of the economic breakdown to improve, which is a significant increase in life expectancy and cycles, with warranties - double the cycles, and you half the cost of the batts (per kWh of throughput).
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
  • Martyn1981Martyn1981 Forumite
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    TrevorL wrote: »
    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.

    I'm posting this separately as it's the exact opposite of what you have asked, just my personal opinion, but you might find the maths interesting.

    Assuming a baseline price today of 15p and a compound inflation rate of 8.4%, then in 10yrs time you get a price of = 33.6p/kWh.

    Assuming an inflation rate of 2%, you get a price of 18.3p/kWh.

    This gives us a difference of 15.3p/kWh or £153/MWh.

    Assuming (lots of assumptions, but hopefully they are fair), that any price increases greater than 'normal' inflation will be on the wholesale price side, then that suggests an increase in the wholesale price from approx £40/MWh today, to roughly £193/MWh in 10yrs time.

    From here, please refer back to my figures on the prices of leccy generation, and the NAO's revised estimates on the wholesale price of leccy. [Note, by excluding the 2% 'normal' inflation from my calculations, I have (hopefully) shown you the increase above and beyond that would be needed/due to generation cost rises.]
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
  • edited 3 November 2018 at 3:10PM
    zeupaterzeupater Forumite
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    edited 3 November 2018 at 3:10PM
    TrevorL wrote: »
    We rely on third parties to estimate future rises. The most recent update we've seen said 8.4% - I can't post links but you'll find it you Google for "UK Energy Price Rises Report 2017". Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed.

    We'd be very interested to hear if you have better data for us to work with, but note we would need an independent source for any information we use.
    Hi

    Your wish is my command ....

    https://www.ofgem.gov.uk/gas/retail-market/retail-market-monitoring/understanding-trends-energy-prices#thumbchart-c852534280570049-n95437

    ... nothing more independent than the official source for such things!


    Worst case scenario (big 6 SVT) over the (approx) 7 year period 01/01/2012 to 28/10/18 equates to a total ~20% increase, so ~3%/year on average, however, on the basis that there's been a shift away from the big 6 & SVTs over the period it's likely that the total increase would be closer to 14%, so ~2%/year on average ... looking at the best scenario (basket), the total 7 year increase shows as ~3.7%, less than half of the annual increase used in the justification, suggesting that the assumption could be overinflated by a factor of ~16x for those who would chase the best deals ....

    Ofgem's analysis suggests that a reasonable term price rise trend would lie somewhere between 2% & 3% per annum, so around 2.5%, so using anything outside this range should be regarded as dubious ...

    This can be double-checked against official ONS economic trends in the form of CPIH (housing based CPI) inflation as per ... https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l522/mm23 ... which suggests the average annual increase (2005-2018) runs close to 2.5%.

    With the strong correlation between Ofgem's retail energy market trend analysis and the ONS trend analysis on household inflation, there's a logical conclusion that any estimates for medium term domestic energy price movement should simply be related to the CPIH trend ... it would take a lot of convincing to suggest that this would be incorrect!

    HTH
    Z
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    B)
  • zeupaterzeupater Forumite
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    TrevorL wrote: »
    I agree, which is why I wrote "I'd be the first to say these examples are not entirely accurate which is why we have a very complex mathematical model that we run for customers." A key element of the model is it compares the savings for 3 cases:

    1. Staying on a 24 hour tariff and adding a battery
    2. Moving from a 24h tariff to an Economy 7 tariff with a battery
    3. Being on an Economy 7 tariff and adding a battery


    This is because a key benefit of these systems is that you can fill them with Economy 7 in the winter when solar generation is low. Obviously only by cycling the battery daily can you get good paybacks. Our model runs an optimisation algorithm to calculate the percentage of charge that a householder needs to put in from Eco7 to optimise their savings (e.g. 40% in October and March, 65% in November and February, 90% in December and January, or whatever).

    While Economy 7 had largely gone out of fashion, it's now back and increasingly popular because of the rise of EVs. Certainly a significant portion of our customers have an EV or are considering one, so they may not be representative of the country at large.

    With this approach instead of saving the cost of a unit by using solar, you are saving half the cost by using Economy 7.

    The results from the modelling are pretty clear - the shortest paybacks are for those who are already on Economy 7 and just add a battery. Next best is moving from a 24hr tariff to Economy 7 with a battery, and least savings go to those who just stay on a 2hr tariff and add a battery (in which it case it will be idle for much of the winter).

    Another key element that is often ignored is lifestyle. At the risk of pointing out the obvious - but it doesn't seem to have been highlighted so far - home batteries are for people with solar who are out during the day. If we get an enquiry from someone retired or at home with small children we tell them straight up that it's unlikely to save them money. The benefit is for people who are out during the day - they are generating free solar but don't get to use it without a battery.

    Forums are imperfect means of communication, but hopefully through conversing we will see that we're not a million miles apart.
    Hi

    That may be the case now, however what needs to be considered is that the reasoning behind the existence of 'cheap rate' tariffs such as E7 or E10 is simply lack of overnight demand during those hours ... offering substantial unit price discounts to entice consumers to change their demand profile reduces plant investment requirements & pays towards the overall operating costs of the plant when demand is low ... however, any assumption that this would continue to be the case is logically flawed ...

    Over the coming period there will be a substantial shift in energy demand profiles. In order to meet agreed emissions targets it's apparent that transport will move from fossil fuel to electrification, domestic heating will largely move away from GCH towards heat-pump technologies and various forms of storage technologies will become more prevalent, which really points towards a need to smooth demand across the entire 24Hr daily cycle to avoid unnecessary investment in little used generating assets ... this can all be supported within NG's ongoing future energy scenario analysis here ... http://fes.nationalgrid.com/fes-document/

    Storage, smart vehicle charging, heat-pumps etc will act to smooth demand, leaving smart-meters as simply being the 'big-stick' to wield to address peak demand issues through applying punitive HHM TOU tariffs, so when there's a balanced & smooth demand profile, where's future for 'off-peak' or 'cheap rate' tariffs?

    It's likely that the price differential between daytime & E7 tariffs will continue to narrow as demand shifts to fill the overnight supply/demand imbalance and over time E7 as a product will be 'sunsetted' & replaced by a purely demand based variable TOU tariff structure, which would logically favour a move towards cheaper weekend energy being available to 'top-up' storage ...

    The future for E7 looks more than a little ropey .. it would be unwise to base an energy storage investment strategy on it being tariff advantageous, or even available, throughout the estimated cycle life of any battery based product offering, whether domestic battery or EV (/V2H/V2G).

    HTH
    Z
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    B)
  • Martyn1981Martyn1981 Forumite
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    zeupater wrote: »
    Hi

    It's likely that the price differential between daytime & E7 tariffs will continue to narrow as demand shifts to fill the overnight supply/demand imbalance and over time E7 as a product will be 'sunsetted' & replaced by a purely demand based variable TOU tariff structure, which would logically favour a move towards cheaper weekend energy being available to 'top-up' storage ...

    HTH
    Z

    The addition, subtraction and alteration of tariffs does make 10yr+ planning tricky.

    A TOU tariff I mentioned a while back was, accidentally, a perfect PV and storage deal (except for the relatively high daily charges).

    It was 5p nightime, 13p daytimes, and 25p week day evenings (4pm to 8pm I think).

    So for 6 months of the year PV would massively reduce daytime and peak rate usage, and the addition of a battery would most likely eliminate peak rate usage for 9 months pa. Then smart use of the nightime rate + batteries could eliminate the other 3 months peak use, which even at 5p import + 10p/kWh battery usage would still be acceptable.

    I'm sure we will see good TOU deals going forward that work well both with PV and PV + storage, but as always, need those storage prices to fall.
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • edited 3 November 2018 at 5:10PM
    zeupaterzeupater Forumite
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    edited 3 November 2018 at 5:10PM
    TrevorL wrote: »
    ... Before that we used the House of Commons Energy Prices Briefing Paper which projected 6.7%.

    The second source clearly takes the view that electricity price rises over the last decade have little relevance to how they expect prices to increase over the next one as the market is being transformed ...
    Hi

    Just read the above referenced report through ... isn't it the case that the 6.7% projection is for Standard Credit customers only (the highest projected increase group) and covers the 5 year period 2016-2020 resulting in an average annual compounded projection of 1.3% ?? .... is it also the case that the overall projection (SC+DD+PP) for all GB domestic customers would be more appropriate to use within a cost justification and that it's shown to be 3.8% over the same 5 year period, therefore suggesting that the report data describes a compounded annual projection of 0.75% should have been used instead of the 6.7% you were using ?

    HTH
    Z
    "We are what we repeatedly do, excellence then is not an act, but a habit. " ...... Aristotle
    B)
  • edited 3 November 2018 at 5:15PM
    TrevorLTrevorL
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    edited 3 November 2018 at 5:15PM
    Martyn1981 wrote: »
    1. Happy to go through all the latest CfD auction prices and estimates for nuclear and RE. We see the highest at £100/MWh for HPC, and of course gas lower, though we may see a rising carbon tax. So that's an increase of about 5p-6p/kWh on the wholesale price giving an increase of approx 33% on the retail price.

    Thanks for going through that argument in detail, and I'd be very happy to use a lower rate of price increase if it was justified, but I don't find that data convincing. However good the potential may be for low wholesale prices I see no evidence that retail prices are going up at anything close to just inflation. You also seem to be using quite old data. As I said we took 6.7% from the Commons Briefing Paper from February this year, but the other report I mentioned covers actual data from 2017 and states "The average increase suffered by all those Big 6 dual fuel customers who have been affected stands at 8.4%".

    I've just done a bit more Googling and found the following (from the Independent online "Why are energy bills rising and what can consumers do about it?"):

    The Big Six have made the following changes to bills since the beginning of the year:

    Npower: 5.3 per cent
    SSE: 6.7 per cent
    Scottish Power: 5.5 per cent
    British Gas: 5.5 per cent
    E.ON: 4.8 per cent
    EDF: 6 per cent
    Average: 5.6 per cent


    I can see an argument for going as low as 5.6 per cent, but not below it. Especially as many of these companies now do 2 increases each year.
  • edited 3 November 2018 at 5:37PM
    TrevorLTrevorL
    18 posts
    edited 3 November 2018 at 5:37PM
    Martyn1981 wrote: »
    Looking at your batt prices, let me suggest a slightly favourable £5k for 10kWh, just as an example. Now, assuming a 10kWh use for the 6,000 cycles, that means a throughput of 60,000kWh's.

    So the cost of cycling 1kWh of leccy is approx £5,000 / 60,000kWh = 8.33p/kWh. Add that to the price of the E7 and you have a unit price of approx 15p/kWh, or to put it another way, no benefit at all.

    I have seen this argument before and don't find it useful. Certainly our products are warrantied for 10 years, and they have a specification of 6000 cycles, but they are not warrantied for 6000 cycles in 10 years. I think that's just a misunderstanding. 6000 cycles is obviously nearly 20 years of daily use so calculating the cost of a cycle assuming that they will do 6000 cycles in the warranty period and then be unusable is a blind alley.

    By all means if you need a product to payback within its warranty period then you may find a battery doesn't. But most people don't expect require that of other things, like a car. A better approach, in my opinion, is to model the degradation of the battery capacity over its lifetime. Our model does this, assuming 2% degradation per year, and uses that to calculate how much energy you will actually cycle through the system over time. Payback periods we quote to customers take this capacity loss into account.

    Bottom line, given that we know battery paybacks are typically 8 to 14 years or so, requiring them to payback within a 10 year warranty gives them an impossible task. Myself I'm expecting, in broad terms, good capacity for the first 10 years, somewhat lower capacity for the second 10 years, and lower but still usable capacity (perhaps just 40-50%) after that. Anything after payback is a bonus. It's not that dissimilar to solar where we know inverters are typically only warrantied for 10 years but the system won't just die on the first day of the 11th year.

    That doesn't mean you're wrong if you require payback within the warranty period, just that that isn't a requirement for most of our customers.

    Martyn1981 wrote: »
    I'm running figures at a 100% efficiency, which the batts won't have.

    Our model uses the inverter manufacturer's specs of Charging efficiency of 94.5% and discharging efficiency 94%, so a round trip efficiency of 89%, but I'd be the first to concede we don't know how well this matches real-life usage.
  • zeupater wrote: »
    The future for E7 looks more than a little ropey .. it would be unwise to base an energy storage investment strategy on it being tariff advantageous, or even available, throughout the estimated cycle life of any battery based product offering, whether domestic battery or EV (/V2H/V2G).

    I agree generally with the initial statement - but not the conclusion. IMO the more time of use options and tariffs become available, the more benefit you get from a battery.

    As well as the Tide tariff mentioned in another post, a very interesting example is the Octopus Agile tariff with 'Plunge Pricing' where you can actually get paid to take excess electricity off the grid. I think their implementation is a bit ropey, but it is hopefully a portend of more interesting options to come.
  • Martyn1981Martyn1981 Forumite
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    TrevorL wrote: »
    Thanks for going through that argument in detail, and I'd be very happy to use a lower rate of price increase if it was justified, but I don't find that data convincing. However good the potential may be for low wholesale prices I see no evidence that retail prices are going up at anything close to just inflation. You also seem to be using quite old data. As I said we took 6.7% from the Commons Briefing Paper from February this year, but the other report I mentioned covers actual data from 2017 and states "The average increase suffered by all those Big 6 dual fuel customers who have been affected stands at 8.4%".

    I've just done a bit more Googling and found the following (from the Independent online "Why are energy bills rising and what can consumers do about it?"):

    The Big Six have made the following changes to bills since the beginning of the year:

    Npower: 5.3 per cent
    SSE: 6.7 per cent
    Scottish Power: 5.5 per cent
    British Gas: 5.5 per cent
    E.ON: 4.8 per cent
    EDF: 6 per cent
    Average: 5.6 per cent


    I can see an argument for going as low as 5.6 per cent, but not below it. Especially as many of these companies now do 2 increases each year.

    Old data - you mean reality?

    I'm using actual prices for generation and strike prices on contracts issued. Also note that RE auction prices are still falling.

    What you need to convince me off, if you want to use 8.4% compounded, is that wholesale prices can rise to nearly £200/MWh (in todays money) despite contracts being issued at £50-£64/MWh? And that the NAO is wrong in their future estimates which have been reduced massively in line with the dramatic reduction in RE generation costs.

    Regarding your reference to price rises this year, please don't go there. For long term compounded rates you will need to show long term rises, when in reality we see rises and falls, but over a long term the increase has not been enormous.

    The arguments you are trying to use are not new to us. They are near identical to those used by 'guestionable' PV salesmen at the start of this decade, and they are wrong, not an opinion, but fact, they are wrong, prices did not rise by the suggested amounts.

    If future wholesale prices are effectively capped by us now knowing the limit of generation costs, then how can energy prices possibly rise by a factor so, so much greater than 'normal' background inflation? Or to put it another way, can you please tell me what special factors will apply to energy prices, particularly wholesale prices, that will drive them up so dramatically?
    Mart. Cardiff. 5.58 kWp PV systems (3.58 ESE & 2.0 WNW)

    For general PV advice please see the PV FAQ thread on the Green & Ethical Board.
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