Community batteries and distributed energy in Australia with Graeme Martin (Founder - Village Power)

Hey, everyone. Welcome back to the Transmission Podcast. I'm Wendell. And in this episode, I'm joined by Graham Martin, founder of Village Power, a company working at the forefront of community battery deployment in Australia.

We've talked a lot about large scale batteries on this show, but this episode is all about the local level. Community batteries are growing part of the storage landscape in Australia, and Graham walks us through how they work, who benefits, and what it takes to get them built. We dig into the customer experience, the challenges around regulation and grid connection, and how these batteries might reshape the relationship between households and the energy system. As always, if you enjoy the episodes, please hit like and subscribe.

It really helps us to grow the show. Now let's get started.

Well, hi, Graham. Welcome to the Modo Energy, Transmission Podcast. Great to have you here. I guess, yeah, I can just start off. I mean, give a bit of introduction to to yourself.

Sure. Wendell, thanks for the opportunity. Yeah. So my name is Graeme Martin, and so I'm from Elphington in Victoria.

And I founded Village Power, a community group, about six or seven seven or eight years ago to deal with, in some senses, enable the community to take action on climate change through energy.

And and I'm I'm just a regular citizen. I'm probably known as a bit of a serial community activist. It's not the first community thing I've done.

And when I started this, I knew very little about the energy industry, but I just felt there was there was rumors in that sort of energy market to do something with the community.

I guess, yeah, was there anything in particular then which inspired you to do that first step of setting up village power and focusing on community batteries?

Look, community batteries wasn't necessarily the focus initially. It was just about energy. I had I've long had an interest in energy, and I spent about a year, sort of like the year in the wilderness, talking to different people about what could you do in the energy space.

And I got some very wise advice from a community person who said, form a team, form a team of ninjas, and that is people with a a a diverse set of skills and figure out what you wanna do with them. And that's what I did. That's how I started out Village Power, and so we weren't called Village Power initially.

So we spent quite a bit of time talking to other players, like the energy players, to local government, to politicians, to other community groups who are doing something in this space, and we use that time to sort of figure out how can we make the most impact at a community level on climate change with energy. And we came up with this idea of putting a battery in front of the meter, so it means it's directly connected to the network, it's not connected sort of behind a meter.

And we figured that was going to have the most impact particularly as if that could be used as a resource, a shared resource by the community. So, that could become a virtual battery for them and that would help them move to a hundred percent renewable energy.

We could have looked at a battery behind the meter. We could have looked at putting in a mini solar farm at a local, place that would have accepted that, but they wouldn't have had as much impact. What we we chose this path because it was difficult because we thought it had the most impact.

So yeah. Like, I mean, what is it about yeah. So placing because, obviously, I guess, a lot of this is might be used to the idea of having a battery located, like, in their house, maybe if they're solar. But then what is it about placing that, yeah, in front of the meter, but still within that community that then means it has a bigger impact?

Well, it it means that multiple households will have access, not directly, that it's through the network, but it means you're not limiting it the access to anyone in particular, so it's open to all in terms of the accessibility.

But you're also having a cumulative effect of a a community scale battery, we'll talk about what that is at the moment, rather than household. So it's a bigger battery, and so it's gonna have a greater impact from a point of view of energy storage and energy sort of distribution.

And we also wanted to do something that would engage the community. And just really what we've found over the last several years is the the idea of a community battery inspires people for all sorts of reasons. And some of them are not quite sure why, but it really does get people on board. And we wanna use that motivation to encourage people to participate in this because it's about moving to a hundred percent renewables. And so if you're in the middle of the day, there's a lot of energy available. If you use that, it's most likely it's renewables.

And what you're doing in the batteries, you're capturing that excess in the middle of the day, you're time shifting it to the end of the day, and if you're a member of the community and you're treating that as your battery, your storage, so a component of that battery is dedicated to your set amount of of energy storage in the evening, then effectively you're using that renewable energy in the middle of the day, but also in the evening.

Yeah. Okay. So then it's basically the, yeah, the community gain access to this battery, like, you know, as a resource that they can kind of share between each other. Yeah. I mean, I think from for, like, for myself and maybe others listening to the podcast, they might have, like, heard the term community battery before. I mean, I guess very quickly, do you mind just talking about, like, how that term has, like, come to the fore in Australia? You know, what's, like, the story behind, like, community batteries in general?

It's a very clever marketing term, I believe. I'm I'm not sure actually how it how it originated, but it certainly captured It's like it's captured hearts and minds of people because it it sort of resonates with them. But really, if you look at fundamentally what it is, it's a mid sized battery. It's it's not a it's not a household domestic battery. It's not a big battery, like a big long storage battery. It's probably between fifty kilowatt and five megawatt in terms of capacity.

But if you like it's from my point of view, it's a bit like the Goldilocks size. It's this mid size that has a range of purposes and that depends on who's using it and for what they wanna get out of the battery. The term community, I'm not sure the origin of of who named it that, but it it it certainly has inspired people to wanna learn about them and for community groups to actually to utilize them.

Awesome. And yeah. I mean, you kinda mentioned that the the range and sizes that you can see. I mean, to put that into context, you know, like, so for example, yeah, to go start at, like, the the bottom and the top of that range, like, how many households would that essentially serve?

So we're looking at implementing a five hundred kilowatt battery and sharing that amongst a hundred subscribers.

And if you look at the the batteries are typically about eighty percent efficient.

So eighty percent of that is four hundred and fifty kilowatt. And so if you if you share that amongst a hundred households, that's notionally four point five kilowatt of battery available to each subscriber, if if you're in for money that kind of long. And that's that's sort of like a typical sort of evening, use for a household.

Yeah. So in terms of, like, kind of what the battery is doing, I think, like, who ultimately, like, controls it? Like, who has that ultimate, like, decision on what the battery does?

It's a very good question.

So when you're implementing these batteries, you need to have, from a community point of view, you need to have someone who's gonna take responsibility, and that'll typically be the retailer.

The connection to the network is with the distributor.

Now, so in the Australian energy market, we have, classes of organizations that are generators of of electricity.

You have those that are distributors that effectively distribute out to the to the households and businesses, and then you have retailers.

And we need to have permission from the distributors to connect to the network because it's connected to the network. It's not a dedicated microgrid network.

And then you need to have a retailer, and the retailer is gonna be selling that that energy to the to the household or to the to the business.

And so the retailer will be the one that actually operates the battery, be making decisions.

What we're aiming to do is actually influence the model to put in place a subscription model with that retail company.

I mean, yeah, in terms of needing that involvement from a retailer, like, how have you seen kind of engagement from retailers in wanting to provide this service?

Oh, that's a very timely question for us right now.

I I say that because we we had a from a Verge Power point of view, we had a a retail partner lined up that just pulled a pin on us recently, but our intention with that retailer was to implement elements of that subscription model. But it's gotta be and this is really a lesson for community groups. You can have these ideals about what you wanna implement, but you ultimately, it's gotta be something that's gonna be commercially viable for the for the retailer.

And so you may need to make compromises to achieve that. And so we we want the retailer to enable us to have access to the data of these hundred subscribers. So as a named set of a hundred people, so not an anonymous set of a hundred people who we can share the information about their energy use with those hundred people so they can see how they're going on this sort of renewable use journey in comparison to their peers in the community and how that whole entire community is going. So we can set goals at a community level and then individuals can then track how they're going against that community goal as well as their own goals.

That's what we wanted the retailer to do. They find it very difficult. The retail market is very competitive, and for them to put in place something for a hundred people, they've they struggle with that because they're saying, listen, we need thousands of of customers to do something special for a hundred people that that eats into our into our margins. And so that's a challenge in finding a retailer who's prepared to adopt what we're we're really testing. I mean, this is really an experiment.

But we think the experiment's important because I think this is I think this what we're trying to do is something that'll be that'll be a lot more prevalent in the future.

You kinda mentioned that. So one way that the community sees benefit is that yeah. So the value that the the battery earns is then shared to them, like, through the retailer that you mentioned. Can Community Batteries, like, I guess, provide support through, I guess, yeah, like power resilience for their households? Or is that kind of outside of the scope of what these are trying to achieve?

If you look at the the bulk of the community scale batteries and arguably network batteries rather than community batteries, they're being implemented by the distributors, the DNSPs, and they they are implementing them in what's called a a solar soaker mode. That is, it's operating the network, it's absorbing that excess in the middle of the day, which is which is, if you're like, frying the network because it's adding there's so much energy in the network, it's setting dangerous levels in the network. And then time shifting that energy is captured to the end of the day when it's in demand. And it's the that's called arbitrage. And that arbitrage effectively happens through price signals. In the middle of the day, price electricity is cheap, sometimes negative. At the end of the day, of course, it's much higher because it's in demand.

And they are doing that largely because it has a material impact on their network. It's saving them investing in in more is more poles, wires, capacitors, whatever else. So it has a a fundamental impact on the network, so benefit to the network, which therefore adds resilience to the network.

The issue is that the customers don't necessarily see that as sort of a financial gain for them, but ultimately it is making those batteries are playing when they're used like that, they are playing a role in resilience. But there's a lot more that could be happen could be happening.

Got it. And I mean, I guess the slide explains why we are seeing certain DNSPs, you know, be quite active in rolling out, oh, yes, yeah, community batteries at local level. Like, how do you see, yeah, those systems operate by DNSPs versus the kind of community batteries that you're you're trying to get built?

So I think the the critical thing with all those batteries was the fact that social license is a critical part to the success of of these batteries, regardless of of who's implementing them. And that social license is important because it means that the community is gonna accept the fact that there's something new happening in, in, you know, in their neighborhood.

But I think there's also a really important role for communities really to be part be at the table to talk about how these batteries could be used because there's a lot of other benefits other than that standard solar soaker model I talked about in arbitrage. I think that's a that's useful, but I think it's a pretty dumb instrument in a sense. It's it doesn't necessarily target particular areas in turn of delivering value to households or to deliver specific outcomes that the community might want.

And that's why I think it's really important for communities to get involved in this whole energy transformation because there there are local issues that they can address or local opportunities that they can address if they're at the table at the at the beginning of those conversations around community batteries. And so a great example is, and I've talked to a few community groups about this recently, is, resilience in a case of bushfires or storms where, communities, to date, they'll lose their power network and they may be out for days and maybe out for weeks.

And if they have a community scale battery, it it might protect a small part of the network with the community in it, or it might be used to protect sort of key infrastructure. So the local supermarket, the local pub, or the local sort of safe place for the communities, you can target where those things are implemented.

And communities want those, and that's why I think they need to be part of the part of the equation when you're figuring out where to invest.

I think that's kind of neatly takes me onto the next question around actually the process of getting these things, I guess, built, which I guess starts with, yeah, getting that community buy in. But then what's it like from that point?

Wendell, I'm gonna flip that around. So if I look at this from a point of view of a community group, what what we are doing, and there's a lot of community groups who want to do this. So the process from my point of view starts first of all with having a vision. What is it you are trying to achieve? What is that battery going to enable you to deliver for the community? What's the outcome? It's not about implementing a battery, It's about the outcomes from that battery.

So once you've you've got a vision, you then really need to identify and start building relationships with all the key players. And those key players are gonna be your funders, often represented by politicians.

So that's one. They're gonna be your distributed energy provider, so you could because you've got to be connected to the network.

They are going to be the holder of the land, and that's typically local government.

Of course, it's going to be the community. What do they want?

And also, it's the potential retail partners that you're gonna work with. How is this gonna work for them? You need to actually understand what all those parties are looking for because ultimately, you're looking for a win win win win win win, a five way win, if you like, something that's gonna work for all those parties.

So those relationships are important. You then need to actually critically examine, well, do you have a a viable business case here? Is this feasible? So you need to do a feasibility study, and that feasibility study needs to consider what's your what's your business model? How is this gonna work?

How is it actually gonna deliver value? How is it gonna deliver revenue?

Where are you going to put this battery?

And specifically a site, and why that site? What are what are the the pros that say that's the best site for this?

It's going to have to look at the overall costs for this, and not just the cost to implement the battery, but also to maintain it.

And then this really important question about roles and responsibilities.

As someone said at the conference yesterday, if the battery catches fire, four AM, Christmas morning, who's gonna get up and go out there and deal with it?

So you've got to actually answer all those things in feasibility. You can you know, you are then gonna be ready to actually then apply for some funding, and then implementing that funding in terms of signing up a commercial partner who's going to implement the battery, purchase and implement the battery.

There's questions about battery technology, but, you know, I think that's they're interesting, but they're down the track.

So you need to resolve those things at that point. You need to get a connection agreement. You can you need to start promoting this to your community.

You can launch a thing, and then importantly, once you've got the battery in, that's when the real work starts because that's when you start trying to create those benefits. That's when you start to realize what your your vision was. And so you you need to reflect on where have you landed.

I guess throughout that process, like, where do you see the biggest, like, hurdles today?

Again, so I speak particularly from a community point of view. Look, in some senses, part of one of those hurdles is sort of the tension between the idealism of what you want to achieve and the pragmatism and the commercial realities.

You're unlikely to achieve absolutely if you want because, of course, it's got to be commercially viable. It's it's got to be viable in some ways. As you do as you as an organization have to be financially sustainable.

So that's certainly attention.

There's if you're relying upon volunteers, then, of course, there's a lot of energy guys in this, a lot of time, and you'll no doubt have burnout, volunteer burnout. And so you need to be because this process invariably takes much longer than everything. I start these community initiatives, and I think, oh, look. A couple of years and I'll be this will be good. And, of course, they take, in this case, seven or eight years, and we're still not there yet. So you need to be constantly refreshing your volunteers.

You also need finances, and it's not just about the cost of the battery.

From a community point of view, you have costs in in turn of just understand getting legal and technical advice, you need professional demo insurance, your funder may have sort of quite rigorous project management requirements that might require funding, You may need some kind of buffer just in terms of risks, and you'll need to do reporting. So there's a whole series of things you need to consider in terms of costs. So there's there's lots of things, and I think the critical hurdle as a community group, again, is you you need to be prepared to listen and to learn and be collaborative throughout that process.

Yeah. It's quite an interesting point around the kind of yeah. There's kind of costs, I guess. We see it in, like, grid scale batteries, those development costs that come before you even get to the point of building the battery. So, like, where does support for that come from? You mentioned kind of politicians earlier, I guess.

Well, so look, these batteries are the same. They, political parties are funding those batteries. And I think that's really important because the the batteries, these midscale batteries, particularly from Acuity Party, they don't stand on their own legs financially if you're if you're paying the paying the capital upfront.

And I think I in fact, I applaud the politicians who are actually putting that investment into them because it's we need that investment so we can explore the various pathways in which these batteries can make a difference. And so that's why you need to work as a community group, you need to work very closely with the the politicians.

In future, I think these batteries will become more financially viable. In fact, this I think the distributors could probably argue for them now and pay for them separately. But if the community's gonna be involved, it's gonna be a a long time, I think, before the the batteries will be financially viable for a community to stand up without actually having some kind of injection of funding.

Okay. And, I mean, yeah, on the topic of, like, kind of policy, like, regulation, like, are there regulatory barriers, like, to getting these batteries built today? You know, what could change at a policy level?

Probably the the major one is in terms of this the the way that distributors receive their funding, they they are partly funded by laying out a a a sort of a capital works program that says, this is how this is the investments they're gonna make on on the coming period of time, and this is the this is the tariffs they need to charge to meet those to meet that investment requirement.

There's not a whole lot of flexibility in that. And that model I talked about in terms of the what we're calling sort of batteries of service, I wanna be able to virtually have access to a portion of the battery for my my own utilization.

That really relies upon the network providers providing a local network charge that recognizes that the consumer is really only using a very small portion of the network. And, of course, their use of that small portion of the network between them and the battery sort of conceptually means that they're not necessarily paying for a whole lot of transmission from energy from a long way away. Now, that cost has got to be realized somewhere, but the those sort of local tariffs you need to support sort of the batteries of service concept, that's not really built into the distributors financial models at the moment. There's a few trials happening, but in terms of regulation, I think the the the way that the distributors are funding at the moment needs to be a lot more agile in adopting sort of pricing mechanisms that can support this kind of innovation.

It's something which, I mean, yeah, we were just talking about, this before the podcast. There has been, I guess, yeah, at the government level, discussions about community batteries. What talk has there been, and has that been backed up by actual policy?

Yeah. So, look, federal government, there's four hundred community batteries. I think a little bit unfortunate about that four hundred community batteries that they have funded is that the absolute bulk of those have been have been the grants have been awarded to the distributors. A couple of them distribute go awarded to local government.

Very few of maybe one or two of them actually awarded to communities. I think that's a bit of an opportunity lost because I think if more of those were actually awarded to the communities or key to community led initiatives, I think we would have had more sort of creativity or innovation in terms of use.

I don't understand if it's pro quo, but the Victorian government's program called the Neighbourhood Battery Initiative under which we are funded, I think that's been, I applaud that because it's it's actually created a lot more innovation because it's it's funded activities or programs that are different, that choose to be different rather than safe. And so in the last round of funding, we were the only group to be funded for a battery because we wanted to test this idea of a subscription model. And so and I think we're at a point in time where we need to be trying to we need to be experimenting and trying different pathways, and that's what that funding's supporting.

Yeah. Okay. You mentioned that subscription model. I mean, how has the kind of response to that been? I guess, yeah, from, like, kind of people in the community, have they been supportive of that?

I think in the community, they're supportive. There's when you sort of talk broadly, there's a lot of interest in it. But as I said, when you go talking to the to the retailers and even to the distributors, that's there's a lot less enthusiasm.

And it's not necessary it's not demonstrated in terms of practice.

Yeah. Because I guess, like like you mentioned earlier, the kind of getting the retailers on-site is a critical part at the moment to making these things work. I don't know. Like, what do you think is needed to to make that leap to kind of get them have them properly supportive of these sort of projects?

Look, I understand the the retailers, particularly the smaller boutique ones, which are more more often likely to be innovative. They're but they are under cost pressures. So I I think they're just there needs to be some kind of safety nets for those for those retailers who are aiming to be innovative. I and I think there's gonna be some kind of safety mechanism for them. If you go back to two thousand twenty two, when energy prices sort of went through the roof, there's a whole series of retailers who basically went bankrupt because energy prices went very high, and and they hadn't factored those into their into their pricing.

And that's there there so there is there is an ongoing risk to retailers if they don't get their particularly the smaller ones, the boutique ones. If they don't get their pricing models quite right, then then, of course, you know, the outcome for them can be sort of the the end of their business.

But we need we need to encourage innovation.

I don't have a great answer in terms of what can be done for them.

Finally, do you see in in getting these kind of community batteries built, are there parties where there's retailers, you know, the DSPs mentioned, or even, say, kind of larger developers of their, like, utility scale battery storage that see this as competition. Do you see that coming up?

So from from my experience and the experience of Village Power, so we when we started conversations with with our DSP and others seven years ago six, seven years ago, I think I think we generally say at the time, the response was lukewarm.

But in the last couple of years, and I think particularly because of this federal government, program of four hundred batteries, where suddenly there's money on offer, significant money on offer, the, the distributors have got in their sort of boots and all. So there's been a complete turnaround, I think, in their in their interest. And they're also they're seeing benefits from it. So when we spoke to them years ago, they couldn't see how this is gonna benefit them. They could sort of understand it conceptually, but but their accountants couldn't, you know, count the beans. Now I think they can see it, and that's why I think it's getting to the to the point where they don't need to be funded necessarily. I think they can see the value of just investing in these community scale batteries themselves, the community scale batteries.

What's their interest in supporting communities to put the community into community batteries? That's a separate question. And I as I've said before, I think the support from retailers and distributors for community led programs is that's still, there's still a long way to go.

So lastly, Graham, we've got two questions which we we end with with every guest. So firstly, is there anything you would like to plug?

As a community group been involved in this community battery sort of journey, if you like, for many years, we are very keen to share what we've learned along the way and also learned from others. And so, our website has resources. We we published a white paper several years ago, which is on our website, which we know is quite influential in terms of a range of organizations, in terms of how they looked at community batteries. We publish a regular newsletter, so I encourage people to go to our website, subscribe to our newsletter, look at our resources, because I I think this is there isn't a rule book to this. There isn't a recipe. From a community group point of view, the first thing you should do is actually research what have others done, what's available to me, what can I learn from others?

Awesome. And so finally, what is your contrarian view?

My contrarian view? I'm not sure this is a contrarian view, really, but we're in the midst of a renewable energy revolution, and we should look at it like that.

If you think about what we needed to achieve in terms of our net zero goals, this is not just about replacing the current mode of generation with renewable energies. We should be looking at how can we deliver an energy system that's gonna deliver a lot more value than the old energy system. So we talked about resilience for communities. We talked about the ability for household to move to a hundred percent renewable.

When we talk about, sort of, what ultimately should lead to cheaper more reliable energy, all those things should be in the frame. And so we should think about this as a revolution, and really, in some senses, start again in terms of how we deliver energy and the model for delivering energy. And a very small part of that is this idea of battery as a service is is putting in place the mechanisms that encourage that to work, you know, going right back down to the distributor in terms of the the local network charges or tariffs that they charge. So I think we we need to think of we need to think big and make sure the community's involved in those discussions.

I really like that, battery as a service. I think it's something which maybe other countries could look to Australia and and adopt in the future. Like, it's not something which, like, the concept of community batteries is not something which I've really seen raised in, say, the UK before.

The idea of battery as a service, really, what it's supporting is local generation of energy, local storage of energy, and then local consumption of energy, keeping it all local. That's the real power of this idea of battery as a service.

But it's also addressing an issue of equity.

So in time, we'll see a lot more households have individual batteries, but not all households will be be able to afford batteries. So the community scale battery makes it equitable. Anybody can have access to it. And, again, what we're doing is we're keeping our energy local, creating it, storing it, and using it. And that has a real transformational effect from a point of view of net zero, but also for households to know that they are making, playing a role into the climate change because they're using one hundred percent local renewable energy.

And finally, I should just say, yeah, we'll be putting the link to, yeah, the Village Powers website, in our show notes. So if this is something you're interested in, if you wanna find out more, then go there and have a look. And, yeah, finally, thanks a lot, Graham, for coming on the podcast. And, yeah. Thanks, Evan, for listening.

Thanks, Venom. Cheers.