Storage Secrets: Innovations Transforming Energy

Hello, I'm Sarah Aubrey and welcome to Wired For Good, conversations for a better energy future. We have an exciting conversation lined up today, diving deep into the world of energy storage and its key role in Australia's energy transition. Joining me are two incredible leaders who bring a wealth of expertise to this discussion.

Frank Calabria, CEO and Managing Director of Origin Energy, with a passion for innovation and a focus on driving Australia's renewable energy future. Welcome, Frank.

[Frank]

Good afternoon, Sarah. It's a pleasure to be here.

[Sarah]

And Rob Amphlett-Lewis, Group Director, Distributed Services and Plus ES at Ausgrid, a key figure in advancing energy solutions and enabling the future of distributed energy storage. Welcome back, Rob.

Can't keep away.

[Rob] (1:25 - 1:27)

It's a pleasure to be back. It was so much fun last time.

[Sarah] (1:27 - 2:28)

Excellent. All right. So today we're exploring the transformative role of energy storage in Australia's energy future.

From household and community batteries to large scale systems like the Waratah Super Battery, storage is key to balancing supply and demand, improving reliability and reducing costs. But with evolving technologies, affordability challenges and the need for collaboration across networks, retailers and governments, how do we ensure storage benefits everyone? Join us as we chat through innovations, barriers and opportunities shaping Australia's energy storage.

So, to kick us off, Frank and Rob, I have a question for both of you. I know we'll be speaking a lot about batteries today, but before we get stuck in, could you explain why storing energy is so important? What types of batteries are we talking about and how do they support Australia's energy transition?

Frank, I'll start with you.

[Frank] (2:28 - 4:42)

Thanks, Sarah. So, we're producing a lot of energy and as we introduce more and more renewable energy, one of the key challenges is that that energy is not always produced when we are using it as consumers and as businesses. So, there's a great benefit in being able to store the energy when it's being produced and generally at its lowest cost.

Think about solar in the middle of the day. And for us to be able to then utilise that energy as customers and when we want to be able to use that. So, there's lots of different storage technologies, but the most prolific really at both a consumer and grid scale level at the moment is lithium-ion phosphate batteries and that's probably what we'll talk mostly about today.

There's also a longer duration storage challenge out there that needs to be met and you can see, for example, the building of Snowy Hydro. That does store energy as well and that's another form of storage and there are lots of other emerging technologies, but the one right now is really lithium-ion phosphate. And that really operates across three levels, the way we think about it.

At a grid scale level, these are the very large batteries like the one we're building at Eraring. And while all of these batteries will operate to literally move energy to when the demand is most, large scale batteries, for example, will offer the ability to support the grid when renewable, for example, production is low. You then move to community batteries and we're excited to be working with Ausgrid on community batteries that really does turn on the ability for networks, retailers, policy makers coming together.

So, we're providing really access to storage for many, many more customers that may not otherwise be able to access that and we think that's a great benefit to customers, but also to our organisations in efficiently deploying these assets. And the last, of course, is really the household battery. For those that have solar and they may have a lot of energy they're producing, then it offers the opportunity for them to be able to utilise that.

And through things like virtual power plants and other things, we can help that be utilised more efficiently beyond. But that's the way we think about the world of storage. It's quite exciting and there's lots of new technologies emerging and really holds a lot of promise, I think, for the energy system as it transitions towards one of variable renewable energy.

[Sarah] (4:42 - 4:44)

And then you have cars on top of that as big batteries on wheels.

[Frank] (4:44 - 4:49)

We will have that as well. You're absolutely right. So, we'll come to other assets that actually play a role in storage.

[Sarah] (4:49 - 4:49)

What about you, Rob?

[Rob] (4:50 - 5:54)

I totally agree with Frank. I mean, one of the great things we've seen over the last few years is just the cost of generating electricity from renewable sources come down. But the challenge of maintaining a reliable system still remains for us to solve and a big part of that is storage.

And that's why storage is the focus of the industry. Thankfully, it's the focus of a lot of smart people trying to solve these problems, get costs down, try to create a vision for a system that can operate without the traditional fossil fuel generated sources of reliability that we've relied on for so long. And that is a huge challenge.

But as Frank says, it's a huge opportunity as well. And it's exciting. We talked to our graduates who joined the business this year, yesterday, and out of the 12 that we spoke to yesterday, 10 out of the 12 wanted to get into batteries.

Because I think everyone understands that if we don't get that right, we're not going to have a reliable and affordable system. And that's the real challenge we've got today.

[Sarah] (5:54 - 5:59)

I suppose we're already producing the energy with solar, we just need to store it now, right?

[Rob] (6:00 - 8:40)

And batteries provide a real methodology of turning what is energy that comes when the sun shines into something that's utilisable in the home in a way that will accommodate the changes in load that a home has. You know, the sun's not going to shine a bit harder when you turn the kettle on, you need something that's going to take that energy and allow that energy to be used in the way that we're used to using it. So, I mean, we touched on this previously, but there's the really big batteries, the community scale batteries, which are embedded in the network, and then there's the consumer batteries.

And each of them play a similar role at the highest level, and that is really effectively they're moving energy from when it's generated to when it's needed. So that's the function. It's dealing with the variable nature of renewable energy.

But each of the batteries have their pros and cons. So, the grid scale batteries, the big, big batteries that Frank talked about in that exciting project he's got at Eraring, that is really, it's a lowest cost solution looking to use scale to get the costs of that storage down. It's big.

It's got the ability to really support the grid when you have some challenges. So, what the experts call inertia, and that comes from the system having big bits of spinning metal that creates a strength to the system that allow the system to accommodate unexpected fluctuations in demand. So those big batteries have a really big use case for supporting the grid level system and providing low-cost ability to store large quantities of energy.

You then come to the network embedded batteries like the community batteries, and those have an ability to support the local low voltage network and do that in a way that can help us offset the need to augment the network or help us manage power quality, manage overvoltage issues that come from too much solar in the local network. But also, they're at a scale which means they're relatively low cost as well. So, and they're coming down in cost.

And then you get the behind the meter battery, generally the sort of consumer battery, and that can do the moving of the electrons from the time they're generated to the time they're needed. They can theoretically, through VPPs and orchestration, support the network as well. But also, they provide sort of often backups of grid failure support.

So, if you've got a battery at home, that battery can help, not necessarily your entire air conditioning and your pool pump, but the fridge and a lot of your power points and lighting through a short power outage.

[Sarah] (8:40 - 8:41)

Yeah, blackout protection.

[Rob] (8:41 - 8:47)

Blackout protection. So that has an added benefit. And so, I think, and I think that's a lot of the reason why people pursue a home battery.

[Sarah] (8:47 - 8:49)

And riding that peak as well if you're on time of use.

[Rob] (8:50 - 9:31)

Absolutely. So, but those are relatively more expensive than the bigger ones. Generally, the scale is what drives the cost down.

And so, each of these batteries has a role to play and each of these batteries have a huge growth profile ahead of them. What we've got to get right is the amount that we invest in each to keep the system costs as low as possible, because we should be under no illusions. Moving from our old system to the new system is going to take a lot of investment and it's not going to result in lower power prices for quite some time.

So, we've got an obligation to make sure we get the amounts of investment in each of those buckets right so that we can get the costs as low as possible to make our system reliable whilst low carbon.

[Sarah] (9:31 - 9:42)

Frank, batteries are often referred to as the new solar and as their technology evolves and prices fall. Do you think they have the potential to transform the energy landscape in the same way that solar did?

[Frank] (9:43 - 11:04)

Well, they certainly are going to play an incredible role in the energy system. The first thing to recognise is the energy system of the future is going to really require a lot of complementary technologies to come together and work in the most efficient form. And certainly, storage is going to be one of those critical ingredients alongside renewable energy, longer duration energy that's produced over days and also rooftop solar.

You've talked about solar. Solar's had a dramatic impact on the energy system as you've seen it come in and the costs have got lower, and you've just seen the extraordinary growth of solar. And so, storage has an opportunity to play an important role.

The one thing I'd probably distinguish it between that and solar, however, is it's probably going to compete against some other asset classes to actually provide this incredibly important role, because many listeners may not think of it, but electric vehicles have the prospect to act as a battery system. There could well be industrial assets as well for large customers that they'll use as a form of storing energy over time as well. So certainly, they're going to play, they're going to have a large dent and they're going to play an incredibly important role.

I find it less easy to answer whether they play the equivalent role to solar, but it'll be an incredibly important role going forward.

[Rob] (11:05 - 12:15)

There's an interesting, if you look into the ISP, the AEMO's plan, and it's not really a plan, it's a forecast of what the energy system might look like, because at the end of the day, a lot has to happen before we get to the sort of 2030s, 2040s, 2050s, especially. But in that ISP, overhauled integrated system plan, which is really a vision for what may well be the makeup of our system in terms of the generation and storage that will take us to what are the sort of committed policy plans for carbon reduction. In that plan, I think over 50 per cent or near 50 per cent of the dispatchable, that's the sort of the generation that you can rely on to be there to meet the system needs, is forecast to be behind the meter storage.

[Sarah]

Wow.

[Rob]

That's a phenomenal amount of storage in people's homes. Now, for me, that's a concern when I look at that.

And I'd love Frank's view on this as well, because that sort of tells me that as an energy industry, we've failed because individuals are choosing to provide those services themselves rather than look to us, the energy industry.

[Sarah] (12:15 - 12:16)

Why do you think people are doing that?

[Rob] (12:17 - 12:19)

Well, this is a forecast.

[Sarah] (12:19 - 12:21)

Or will potentially do that.

[Rob] (12:21 - 13:35)

Will potentially. Well, I think it's because they've gone for battery and solar because prices have risen. And that was a reflection of, you know, industry investments, policy settings, those things.

But we know that batteries within the network will be half the price as batteries. We're pretty confident that batteries within the LV network will be half the price of a battery behind the network and batteries, the grid scale that Frank's looking at will be even cheaper than that. So, if we've got a situation where, you know, 80 to 90 percent of the storage that we're deploying is in behind the meter, I feel like we've got something wrong.

We've got prices that are driving people away from the industry and we've got investments that don't reflect the lowest cost solution to the shared challenge, the community challenge we have, which is reducing the amount of carbon that we pump out into the atmosphere as we fill up our needs for energy. So that's, I think, something for me, I'm thinking, well, we should be finding a better way than asking our customers to provide services that, you know, rightfully, we should be doing at a cheaper and more effective way than they can.

[Sarah] (13:35 - 13:49)

Good point. Frank, for everyday Australians, exporting solar to the grid during the day isn't as lucrative as it used to be. Is now the right time for households to invest in their own battery or are there other options they should consider?

[Frank] (13:50 - 14:02)

Yeah, so firstly, look, the growth of solar and its abundance has created now the challenge of the fact that it's all being produced in what they call the duck curve in the middle of the day. And so, we've got more and more of an abundance of energy.

[Sarah] (14:02 - 14:04)

Can you just explain the duck curve for people?

[Frank] (14:04 - 16:46)

Yeah, happy to do that. I mean, think of the shape of a duck. And what happens is with solar coming in during the day, every day and more of it coming in every year, it's actually lowering the price of energy in the middle of that day.

Why is it doing that is that you've got the abundance of solar, but you've got existing coal plant and others that need to run through that day. And therefore, you've got too much energy for what's being consumed. And as a result, it's dropping the price there.

And therefore, that signal for what exporting to the grid, therefore, is getting lower because the value of that energy is lower. It's clearly much more valuable when most people return home from work every day. And that's where the duck's curve comes all the way back up to its head.

And that's what we're really solving for in many as when we talk about actually storage, solving a big problem about moving the energy from when it's produced to when it's being needed, to use Rob's words. Look, what you'll find then is that we really need to find the most efficient mechanisms to do that. And we've talked about grid scale, community battery and consumer batteries as well.

I think a lot of people went on the journey for solar and may look at the decision around a battery about being in control of that decision. But it's not the cheapest form of storage technology that Rob's mentioned earlier. But people don't associate necessarily it's their storage, especially if they've got solar.

And we need to do that so that we're providing that solution to customers that may not have access to their own solar and their roofs, but also to provide a storage product that they can all participate in. And that's one of the reasons why we are strong advocates and working with Ausgrid in terms of community batteries in places like Bondi and others where we're trialling that so that we can share the benefits and have more people access that in a more efficient way. And we think that's a tremendous thing that we should be offering.

The people buying batteries right now, I think that when you think about the solar journey, you may recall that as people were looking at it, it was the cost of the unit and then the payback. And as solar reduced in cost, people can then entertain the purchase of that battery. The paybacks got lower.

And as they got closer to, say, seven, six, five years, people then get their heads around that that's actually enough of a payback. Batteries are still more expensive than that. I think the average 10-kilowatt battery would be closer to ten thousand dollars.

So, we are very much watching cost curves of batteries as they come down. But as that and that will vary for paybacks depending on individual households, some may be closer to five years, many will be at 10 years. So, I'm not sure it's the right decision for everyone, but it may be getting closer for some.

[Sarah] (16:46 - 16:48)

They're very expensive per kilowatt hour.

[Frank] (16:48 - 17:37)

But they are still very expensive. I think that probably lends to Rob's point. If we can find a more efficient solution and we genuinely believe network community batteries will play a vital role and can come in at lower cost and you can associate that storage product that you feel like you're getting the benefit of that battery that you see in your community.

And I think that connection is important. Then I think that's a real way of us lowering the cost of that. I think you'll still find consumers will choose that if they particularly are using solar and they can see their energy usage patterns.

But I don't think it's the right decision for everyone right yet. And I think you're seeing that in terms of uptake. But we're all watching how the cost of that batteries then reduce over time.

So, it's not there yet at scale. And it's our job to find plenty of products and solutions that customers really enjoy.

[Rob] (17:37 - 19:03)

Exactly. And I think we talked about this last time. So, there are some challenges in social equity that have come from the energy transition.

Solar PV, generally homeowners, it's not necessarily rich people, but generally homeowners can benefit from that. Renters can't. Electric vehicles, generally it's people with off street parking who can find that transition easiest.

They're not cheap. And so, these two things have generally been to the advantage of the relatively better off or homeowners, certainly. And we're worried, I think, that the storage will be the same story where, you know, if you've got the wherewithal and the home space to buy one and the home space to put one in, then potentially you could benefit.

As Frank says, the payback's not great yet, but that might change. So we feel obligated to find a solution which solves some of that social equity problem, especially because we know it's a lower total overall total system cost to have a battery embedded in the network, providing benefits to the network, providing the same benefits to the retail market as any battery would, being able to be traded within a retail participants portfolio, but also sharing some of those benefits with consumers who wouldn't otherwise have the benefit of a storage within their own home. We think that just sort of ticks so many boxes. And certainly, delivers a lower overall system cost than home energy storage would.

[Sarah] (19:03 - 19:10)

So how would that work? Say I'm a renter, I can't put in solar, I can't put in a battery. How would you actually make my, how would I benefit from that?

[Rob] (19:11 - 20:05)

So Origin have a product in the market where you can sign up to a community battery if you're living in the sort of catchment where that battery's affecting the peak demand on your feeder and you'll receive a discounted energy price, reflecting the fact that the electrons that you're generating from your solar or just the fact that the electrons that you would consume at the peak, which would be an expensive time, you've actually effectively bought those in the off-peak period, stored them in the battery that we operate. And therefore, in your bill you get from Origin, you get a big discount to reflect that that's a cheaper electron than otherwise would have been. So that product works for people with solar who can store their excess or people without solar who are just saying, well, I'm going to buy the electrons I'm going to use in the evening during the day, makes my experience cheaper.

And that product that Frank's offering to the market gives people a share of that benefit.

[Sarah] (20:05 - 20:28)

That's great. So, energy storage isn't necessarily about batteries. I'd love to know more about that.

What are the emerging non-battery alternatives, particularly when it comes to long term versus short term energy storage? What are the exciting nerdy things that could potentially play a role in the energy transition? I'd actually love to hear from both of you about that.

Frank, we'll start with you.

[Frank] (20:28 - 20:30)

I'm happy to talk to you about that.

[Sarah] (20:30 - 20:31)

Tell me about nerdy things.

[Frank] (20:31 - 22:02)

Well, there's a lot going on because it's probably the scarce resource right now is how you sold long duration storage. And for people that are not familiar, as we would be with the sector, generally those lithium-ion batteries now are operating within the hours, like the grid scale batteries are moving to four hours. It wasn't so long ago there were two hours.

And so generally you're moving in the shifting of energy, longer and longer shifting within the day. But when we have more and more renewables coming in the system, the challenge of matching supply and demand gets bigger. And you will have times where weather events and other factors will play into the fact that you might need to be actually storing energy for a lot longer in order for it to operate across the system.

And it may not be as common to do that. And clearly people are thinking, how does that operate completely overnight? And then how do you operate to the several days?

At one end of the scale, you can see Snowy Hydro is being built as a very large storage system that operates based on storing the water and releasing it. And that operates at a grid-based level and will play an important role. You will see, I think, as coal comes out of the system, unless more hydro is built at that very large scale, we may not be running them very often, but you'll need to have a sort of a gas-fired plant in backup.

They'll run very low-capacity factors, but they'll need to be there for the rare events that occur, unless we find something else that can generate for days and days and days.

[Sarah] (22:02 - 22:02)

OK.

[Frank] (22:03 - 23:19)

But as you come in closer, the real, I think, areas of innovation that are playing are really in the area of things like flow batteries, which actually operate a flow system that are designed to run sort of in that 8 to 10 hours. There are lead asset innovations that are occurring. There are gravity-based solutions.

There are compressed air solutions. And you'll find if you go across the world, there are a lot of trials that are going into all of those technologies. They're probably early stage to understand whether they can bring down the cost over scale.

What you're finding right now is the lithium-ion phosphate is reducing in cost, which extends its duration, and the technology is improving. But it hasn't been seen as a natural technology as once you get beyond like many, many hours, can it really operate? And so, I think there's a lot of investment and a lot of innovation going to a variety.

I've only mentioned a few. There's many others, and I'm sure Rob can raise them with you, and he'll have some ideas as well. But we're certainly investing in a number of those areas because we think it's one of the great puzzles that needs to be solved over time.

And there's lots of other lots of other chemistry that's going into understanding how you might be able to get batteries to run longer as well.

[Rob] (23:19 - 23:47)

So, where I get most excited is in the, you know, we know that we need storage to solve that sort of the gap between when electrons are generated and when they're consumed. But storage is expensive. So, is there a cheaper way?

Because effectively what storage does is shift when you're consuming the electron from when you are to when it's available. So, the cheaper way of doing that or often cheaper is actually shifting when the energy is consumed.

[Sarah] (23:47 - 23:47)

To the behaviour.

[Rob] (23:48 - 25:46)

So, and not necessarily the behaviour, because we've now got to a situation in our lives where so much technology is taking so many decisions for us all the time. You know, your iPhone in your pocket is doing things all the time that you're not aware of. You know, the technology is fantastic.

You look at Octopus Energy and you guys have got a great, great power plant, the things we're doing with Edith in partnership with Origin, really focusing on where we can move the demand to meet the generation. The old system would always make sure the generation was there to meet the demand. And now we've got to think about the system where the demand is there to meet the generation because the generation is going to come when the wind blows.

The generation is going to come when the sun's shining. The more we can do to move our demand to those times rather than actually storing the electrons, move the demand. We'll always need storage to go the last mile.

But the more that we can avoid the need for storage by moving our demand to meet the generation, the better. And an Octopus in the UK and, you know, some of the stuff we're doing with Origin now, you know, we're really getting to the point where we can we can incentivise or provide signals to the technology for cars to charge at a time when there's a market surplus for some of the more non-time critical loads to come on and go off at times when there's a surplus in the market. So really, for me, storage is solving a problem.

But the scale of the problem you have can be minimised by, I think, other things to do. I think that's where the system becomes really dynamic, very exciting because everything becomes an active participant in the market and we can have a much more intelligent, much lower cost system if we take advantage of some of that technology.

[Frank] (25:46 - 26:33)

It's really quite an exciting development that I think will only emerge further. And you've given some great examples because this ability to manage the flexibility and supply and demand for areas where it's not time critical really has the opportunity to actually match supply and demand even more efficiently than investing in storage. And that's why some of the work we're doing with you.

But there are good examples, like if you're an electric vehicle, it needs to be charged 80 per cent by 6 a.m. in the morning. You don't really care when it gets charged. You want to have that charged at the most efficient point in your either overnight or if your use is different through the middle of the day.

Well, now technology can do that in real time and make sure that's at the lowest cost. And an existing asset that sits in the system, hot water systems. Yeah.

So, you want to wake up and have a hot shower every day.

[Sarah] (26:33 - 26:33)

Yeah.

[Frank] (26:33 - 27:08)

Well, they can now and we do this. We are doing this across hundreds of thousands of hot water systems where what's happening is that we're actually just optimising that we charge that at the lowest point in the day. And what it's learning is learning that everyone will have their showers at different points in the time and it learns to make sure that you've always got that available.

We just see that proliferating. And as you say, as electric vehicles grow and other storage assets emerge, then you'll find the intelligence that's associated with that needs to be done in such a simple way that you are only interested in your utility of how that works.

[Sarah] (27:08 - 27:33)

Does that mean we need to kind of make sure people are using smart chargers when they're putting in chargers in their home? Like my OMI charger, I can put in the tariff and I can go, OK, I'd like the car charged by 80 percent by 7 a.m. And it just does its thing. But also, we have our hot water heat pump that's charged on a timer with the solar.

So, is it important to try and make sure when people are installing those things and spending money that they're doing that?

[Frank] (27:34 - 28:33)

Well, the comms protocols are actually literally the technology protocols of having devices connected is going to continue to become easier and easier. And you're right, you're at the early, you're really at the front-end stage of actually making sure they all connect and operate in real time. Well, between smart meters, but also a lot of the comms on the edge of the what we call on the edge of the comms network and how that connects, we're finding that more and more of those just getting connected literally through literally Wi-Fi and other edge compute type solutions, which obviously comes with all of the, as you would expect, security protocols and information protocols that we think that's going to continue. That's already started, but that will continue to become easier. But to your point, that's exactly what you've been at the front, really at the leading edge of doing.

And I just think that will become more and more that it becomes connected. For example, having access to APIs to the EV vehicles so that you can actually make sure that they operate most efficiently. That will continue to be an exciting space.

[Rob] (28:34 - 29:28)

And I think pricing has got a really big role to play in this, because the reality is that if you don't mind when you're going to consume energy, energy is ridiculously cheap. You know, the cost of generating an electron today from solar or wind is remarkably cheap. The expense comes if you want to consume it at a non-negotiable this time and someone has to guarantee that, that's expensive.

And in a renewable energy environment, that's much, much, much more expensive than it was previously. But if you're not bothered about when it is, it's cheaper than we ever could have imagined it being. And so, if we can get that pricing right, then what will happen is people will shift their behaviours.

But more importantly, that technology will evolve. People will invent technology, people will innovate in ways that will shift your demand around you, and you will have no knowledge it's happening. Your utility will be unaffected.

[Sarah] (29:28 - 29:30)

Just trust that it's going to do its thing. It will and it will.

[Rob] (29:31 - 29:52)

And we're seeing that we're seeing that already. And it will, I think, with AI and the capacity, the capability that comes from AI, these problems will be solved over the next five or six years. And that's super exciting.

It's a very different energy system that we'll have. And it really does have the opportunity of giving us that trilemma all at once, which is affordable, reliable and sustainable. And wouldn't that be nice?

[Sarah] (29:54 - 30:19)

OK, so energy storage has the potential to transform Australia's energy transition by driving affordability and fairness, as you said. However, achieving this requires overcoming significant barriers and fostering collaboration across the energy sector. So how can we ensure that storage is rolled out in a way that delivers the greatest benefits for customers?

I'm going to start with you, Frank.

[Frank] (30:19 - 31:07)

Well, I think the key thing that and this is the work we've been doing with Ausgrid, Rob and his team and my team as well, is that it's up to us to actually give the right signals to customers. And by that, I mean working across that value chain that gives the right price signal and also coming up with the products that are simple and compelling enough that actually people create that emotional connection also to it as well. So that collaboration has meant that we were clearly the system's been set up as a, you know, there's transmission, there's distribution and then there's the retailer.

But clearly, it's been working together about how do we work across distribution and retail to then offer the product that requires us both to work, to share the benefits with the customer. I've been really excited about how that's gone.

[Rob] (31:07 - 32:18)

I think that's been one of the most fantastic things about this challenge, because when the energy industry was in this sort of very stable world as it was before, we sort of started tackling this challenge of decarbonisation. You know, as a distributor, you could get about your job without really ever having to think about a customer or a retailer or a generator, you know, very clear what you had to do. The physics are set out, you know, the laws of physics, the laws of physics, you do your job.

And, you know, the generator would generate the electrons and the retailer would sell them. And off we went about days without even thinking about each other. But now the challenge blurs the lines, and the solutions are never in one bucket to this challenge.

They're always spread across a couple. And that, I think, you know, that concept that we now, I think all of us starting to understand that we've got a shared problem and the solutions are almost always shared. And that's fun.

And that's where some of the innovation comes from. And that's why, you know, working with some of Frank's team that, you know, super smart people, super passionate about making a difference and open to collaboration in a way that 10, 15 years ago, we wouldn't have been. You know, that's what gives me great confidence that these challenges, as big as they are, will be solved.

[Sarah] (32:18 - 32:24)

So, what specific role do retailers and policy makers have in making storage accessible and affordable?

[Frank] (32:25 - 34:25)

Firstly, what we what we need to do is we need to offer literally the products to the customers where there's actually a compelling proposition for them to take up those products. OK, so we're doing that all the time. Whatever customer, whatever offering we give to our customers, it actually has to resonate with them.

And that generally starts with it being simple enough for them to understand because not all are living in the technical detail of the way we operate. They just say, I would like to be able to participate. What we found really was through the community batteries is there's a lot of people that have felt like they were never able to participate in solar.

They can see that this is emerging and they would like to be able to participate to it. So, we therefore create storage as a solution. And for us to create that, remember, this is a community battery that's either in the local, at the end of the street or could be on a pole or could be on a substation.

And therefore, we're working with the networks. And what we need to do is that they'll deliver that battery. They'll do that most efficiently and they'll know, the networks will know this is actually also very good for the grid because that's one of the benefits is that it can avoid capex in other areas and the cost in other areas.

And for us, it's to take that signal, work with the network, then package that up and say, here, you can have this storage as a solution. And you get that you enjoy the benefits of that. And that generally comes through a cheaper offering to them or something that matches their needs.

And not every customer is the same. So, we actually have to come up with those offerings that match those needs. So that's what we feel we play that role.

What we've had to then jointly do between ourselves, and networks is to work with the regulator to actually come up with ways in which that actually gets determined and that we understand that it all works. And that wasn't how the system was originally designed, as Rob said earlier. So, there's been, I think, a role we've played then alongside Ausgrid to actually be able to bring that solution because customers are interested in ultimately getting a product that they feel is attractive to them.

[Sarah] (34:25 - 34:30)

So, what needs to change in how these groups, how energy networks and retailers work together?

[Rob] (34:30 - 36:21)

Well, I think the way we think needed to change and I think broadly that is changing. And it's not just Origin and Ausgrid, it's other networks and other retailers. But importantly, also, it's regulators that, you know, you wouldn't have seen a regulator 10, 15 years ago saying, yeah, OK, distributors can build batteries on the network, a portion of it can be RAB funded and the rest of it can be leased out to a market participant.

That blurring of the lines between retail generation and networks was never accepted previously. But I think we're all getting to the point where we can see the benefits. Now, Ausgrid would never be able to get a business case to stack up on deploying a battery just to solve a network need.

It wouldn't work. But if that battery is solving a network need and a retailer is using that in the national energy market, suddenly the economics change and that battery suddenly becomes much more cost effective. And if customers can get a bill saving from that as well, then now we're in that sort of win, win, win environment where thinking about things differently, you know, breaking some of those old rules, you've got a much better system, a much cheaper outcome and you can move much faster to deploy these assets than you would otherwise.

And, you know, networks are good at operating, you know, electrical infrastructure in the community. It's a dangerous thing to do. We've been doing it for hundreds of years.

We know our stuff. And when you're deploying storage in the community, whether it's substations, top of poles or in parks, in the streets, you need to have that culture of safety first and community safety front and centre of your thinking at all times. So, we bring something in that element of the system that others can't provide.

But likewise, there's nowhere in the world that we'd be able to do the things that Frank and his team can do with that battery. So, it's nothing without both of us. But it's something pretty special if both parties are involved.

[Frank] (36:22 - 37:26)

So, we're very, look, storage plays a critical role. But Rob was correct in saying that the most efficient solution of all is that you're matching supply and demand in a way that doesn't require any further investment or minimal investment. And the exciting thing about technology, which Rob raised earlier, is that that that is becoming much more scalable now where lots and lots of consumer-based devices and assets are literally connected and can respond in real time.

And why that's most efficient is that that doesn't require you to buy a battery to do that. But it does require you to think about when you want your car charged, when you want your hot water charged, when you will be interested in actually consuming and your usage profile could be quite different to another. And we can see that that's actually going to play a critical role.

And you're seeing that now with virtual power plants here and overseas, and they're operating at great scale. And we just we think that that's going to emerge to be a key part of the system.

[Sarah] (37:26 - 37:28)

Can you just explain what a virtual power plant is?

[Frank] (37:28 - 39:07)

A virtual power plant is this. So, what would happen now is we have people enrolling into the virtual power plant. We would have over 400,000 different consumer assets or consumer devices that are connected.

Hot water systems, batteries can be solely in units, EVs. And if you went to the UK, which is your other example, is there is a much higher penetration of EVs and they're all doing that. And essentially what's happening is through the orchestration layer of that, what it does is that it actually has control of when it charges your car remotely.

So, you would have an EV charging product for us or EV power up product. We would agree to provide a benefit to you, and you would allow us to under within certain parameters that suit your own needs, charge your vehicle whenever it's required. But that will extend way beyond those particular assets.

And even now in large companies, for example, we would be managing the chilling units for a retailer in real time. And they'll say, we'd like to make sure they're maintained at a certain temperature and that you're using the energy over time. That's going to become widespread.

So, this is when people talk about distributed energy assets all being connected, matching supply and demand in real time. And then we may wish to then say, well, we're going to actually discharge that battery because there's an issue at the moment. And as long as that you were happy to sign up to that, then you would enjoy the benefits that are associated with doing it.

And that's the exciting thing that emerges. And by the way, storage assets will play a key role in all of that. But it won't just be storage assets.

There'll be lots of assets where energy can be either stored or moved and demand and supply can be moved.

[Rob] (39:07 - 40:33)

It's a great point. And I think it reminds me of one of my concerns about behind the meter storage. And we've seen this recently, actually.

What happens is virtual power plant, all these assets congregated together. And then if the market price goes up, you can turn them up. If market price goes down, you can turn them down.

So effectively, it becomes like a 500-megawatt power plant, all of these assets, millions of assets around the country orchestrated as one create a virtual power plant. But one of the concerns about behind the meter storage is when that asset is being utilised for the virtual power plant, it's generating financial benefit to the customer and to the orchestrator. But if you have a network outage and that storage asset is empty because it's being used by the virtual power plant, my concern is the logical response by the owner of that battery is to say, you know what, I'm going to keep half of that battery full for myself in case there's a network outage and I'm only going to allow half of it to be used for the VPP.

That being the case, you don't have the full value of the storage behind the meter available to help manage the system. You're going to have increasingly lower percentages of it as more people experience a network outage and want to have that storage retained for themselves. So, it's a concern, I think, that we'll find a way through.

But at the moment, we've seen that in previous events where people have said, you know what, I'm not going to let my battery be part of a VPP because when I had an outage, it wasn't full and I didn't get that blackout support.

[Frank] (40:33 - 40:48)

Yeah. And I think one of the things is with all the different asset classes that would sit on a VPP, it would come down to the parameters and settings and people wanting to operate within it. The whole idea of this is you've got this enormous asset set of assets that are out there that are generally underutilised.

[Sarah] (40:48 - 40:54)

But people want to potentially even, there's a human nature thing that goes, I've paid for that, I want to keep it for myself.

[Frank] (40:54 - 41:21)

Maybe, maybe. And maybe that could come down to different behaviour. I think people will, and you raised it earlier, if you're not getting as much because you're exporting solar, did you expect solar to penetrate so much that your feed-in tariff would never change over time when the cost would come down?

I think things will shift over time. But I also think people will look for that utilisation, but that will come down to a behavioural choice. It will.

But I expect that there's quite a lot of benefits associated with the consumer getting the benefit of those assets.

[Sarah] (41:21 - 41:36)

I think you have to convince the consumer as well that it's OK, that someone else is controlling your, I think, you know, there's plenty of people out there that would use that in a negative way to say, oh, they're controlling your home. You know, and you'd have to actually really be on top of that and get ahead of that kind of scare campaign.

[Rob] (41:36 - 42:07)

Spot on. And things like the hot water load control, you know, if you can move the hot water from charging overnight, as it used to, to charging in the middle of the day, so it's soaking up those excess solar. If you can do that and no one has a cold shower, then you're away.

And that's the challenge for us, is we need to make sure that no one has a negative experience from it. Batteries are a little bit different because they do, on very rare occasions, if you're in the Ausgrid network anyway, because we have very few outages, you will want that for yourself. And that's where there's going to be some challenges.

[Sarah] (42:08 - 42:15)

Can I ask a question about community batteries? So, will they help if you have a power outage? Can they help support and keep the power on for people?

[Rob] (42:16 - 42:42)

So short term, obviously, it depends on the scale. So, and depends where they are. So, networks are pretty organic things.

They're like the roots of trees and some batteries in some locations will be able to keep customers downstream of that battery on for a few hours. The exciting thing isn't when you're doing one, two, three, four, five, but when you've got hundreds in network effect, then that's when you see reliability and resilience benefits really starting to exponentially grow.

[Sarah] (42:42 - 42:45)

So, it's like a mesh rather than one big power source running it.

[Rob] (42:46 - 43:00)

Spot on. And the more that mesh becomes connected, the more resilient it becomes and the less prone to reliability issues. So that's when it gets really exciting.

It's the future is really looking pretty good for this sort of technology.

[Sarah] (43:02 - 43:18)

Very exciting. To wrap things up. I'd actually love to hear from both of you.

What's the one most important action that we can take right now to unlock the full potential of storage technology and accelerate the energy transition in Australia? Frank, I'll start with you. It's a big question.

[Frank] (43:18 - 44:21)

It is a big question. And you've asked for one. We did touch on one earlier.

I think cost will still be it makes the case easier. And when I mean that, I just go to a bit. There'll be technology advancements.

So, it's not just technology, it's scale, it's installation. It's all of those things that I think that we would continue to say is really quite critical. And there's lots we can do, irrespective of the technology curves that actually continue to improve it.

I know you only asked one, but alongside that is I think there's a job for us in particular as retailers for us to continue to educate customers and understand the value associated with batteries. And I think for us, that's why do I say that's one of the most critical actions we can take, because it's in our control to be able to stimulate the adoption of batteries and particular things like community batteries and the products we offer. I really feel that that's critical, recognising that for many, whilst the paybacks are getting lower, it still is too expensive for many to actually adopt in a mass market stage right now.

[Rob] (44:22 - 45:39)

I'd agree with that. I think I'm going to cheat and say a couple of things, but I do think deployment, quick deployment of storage is really important because the last thing we want is a lot of the coal fired generation is getting older, probably getting less reliable. And I think we want people to be confident that we as an energy industry have a solution post coal in a much more decarbonised system.

So, I think we have to get onto deploying storage. That's the first thing. I think the second thing I'm going to talk my own book here is, you know, we think that community level storage, LV connected storage has a big role to play.

And so I think it's upon us working with Frank and his team and others to really get out there and show the benefits of this solution, because I think, you know, success for me would be everyone accepting that, yes, there will be behind the meter storage is there will be lots of people investing in their own batteries. But a better outcome is, you know, a much greater degree of in front of the meter distributed storage that it's accessible for everyone, not just those who can afford a battery at home. And I think so that's the challenge for me.

The most important thing is we get our message across and we get people on board with this this new technology and this innovative way of delivering storage to the consumer.

[Sarah] (45:41 - 45:53)

Love it. Well, thank you, Frank and Rob, for sharing your insights today, and thank you to our listeners for tuning in to Wired for Good, conversations for a better energy future. Thank you.

[Frank] (45:54 - 45:55)

Thanks very much, Sarah. Thanks, Rob.

[Rob] (45:55 - 45:55)

Thank you.

[Sarah] (45:57 - 46:25)

Who really benefits from Australia's energy transition and how do we make sure no community is left behind? In our next episode, we're unpacking the power of local communities in shaping the energy future. From regional towns to renewable energy zones, we'll explore how deeper partnerships can create fairer, faster and more sustainable outcomes.

Tune in to discover why real change starts at the community level.