Role of home and community batteries in energy system of future

Under assignment to the Ministry of Economic Affairs and Climate Policy (EZK), CE Delft and Witteveen+Bos conducted research on home and community batteries. This resulted in the ‘Home and community batteries; opportunities, bottlenecks and policy recommendations’ study.

The main objective of the study was the business case and grid impact of home and community batteries. In addition, we studied key bottlenecks and opportunities for home and community batteries. This led to policy recommendations to EZK and regional grid operators. The results were coordinated with a focus group of representatives from the battery and solar industry, the Ministry of Economic Affairs and Climate Policy, and regional grid operators.

Possible opportunities

Two possible opportunities were explored for the use of home and community batteries:

1. CO₂ reduction by storing solar energy.
   It is technically possible to reduce carbon emissions from the electricity sector in the Netherlands by storing solar energy by using home or community batteries, using stored energy and/or making it available for energy trading. However, this study shows that currently, there is no positive business case (also see point 3 of the conclusions and recommendations).
2. Enabling new construction developments thanks to a community battery in areas with grid congestion (physically behind a connection or contractually).
   For area development that cannot be fully realised due to grid congestion, (community) batteries could potentially be part of a solution. As part of a local energy system, to allow additional electricity consumption (a consumption higher than allowed by the capacity of the grid). These could include behind-the-meter solutions: either virtual with group contracts or physical. However, a certain amount of transmission capacity (space on the power grid) is required, otherwise the area development cannot go ahead at all, and it will not be possible to connect the battery. It also requires a form of contract focused on energy sharing (for instance, a group contract).

Conclusions and recommendations

1. Develop incentives to connect/operate congestion-neutral home and community batteries.
   Currently, the right policy frameworks, contracts and/or (financial) incentives to connect community and home batteries in a congestion-neutral way are lacking. This makes it very likely that community and home batteries will create higher peaks on the low-voltage grid due to energy trading. This is undesirable, as it increases grid congestion. The challenge for grid operators is to develop the right (financial) incentives and/or contracts.
2. End the net-metering scheme and explore methods for abolishing double energy taxation.
   Abolishing the net-metering scheme will provide an incentive to use or store own solar energy directly and a fairer distribution of energy costs among households. After abolishment, double energy taxation is the next bottleneck for energy trading.
3. Refrain from subsidising home and community batteries.
   Achieving a positive business case would require a purchase subsidy amounting to 40-80% of the purchase price of the batteries. Such a subsidy cannot be justified. In addition, the production, use and end-of-life of batteries also produce emissions. Mostly outside the Netherlands, during battery production. Global emissions for the battery are expected to exceed CO₂ reductions in the Dutch electricity sector.
4. Develop and implement frameworks for spatial integration and safety.
   For home batteries, there are currently no safety regulations relating to their incorporation into homes, and for community batteries, legal anchoring of regulations for spatial incorporation (including licensing) and standardisation of risk assessment (e.g. fire safety) are lacking.