Unlocking the Full Potential of Distributed Batteries for a Smarter Grid
Proposed changes to small-scale embedded generation rules could reshape how households and businesses interact with the grid. While updates to standards and export limits aim to manage network stability, they also highlight an opportunity: to properly reward distributed battery owners for supporting the grid.
https://www.talkingenergy.com.au/changes-to-connection-standard-for-embedded-generation
The Problem: Penalizing the Very Solutions We Need
One concerning aspect of the changes is how battery owners could face unfair charges when importing after exporting. Imagine a home battery system exporting energy into the grid during peak demand, helping to stabilize the network and reduce strain on infrastructure. Later, when demand drops, that same household might need to re-import power at a lower rate. However, under some interpretations of the new rules, they could be hit with demand charges or additional tariffs for that import, effectively penalizing them for participating in energy trading.
This is double taxation and disincentivizes the very behaviour that grid operators should be encouraging.
The Opportunity: A Smarter Grid With Fair Market Access
If policymakers and network operators truly want distributed batteries to play a major role in stabilizing the grid, they must recognize the value of flexibility. Instead of penalizing battery owners, we should be:
Rewarding peak-time exports that reduce stress on the network.
Eliminating unnecessary penalties for importing after exporting.
Encouraging demand-shifting behavior with tariffs that reflect true market dynamics.
Creating real-time incentives that allow batteries to operate dynamically based on grid needs.
By aligning economic signals with grid reliability, we can unleash the full power of consumer-owned batteries, VPPs, and intelligent energy trading. This isn’t just about fairness—it’s about creating a more resilient, lower-cost electricity system for everyone.
Powston’s Role in Enabling Battery Trading
At Powston, we’ve been helping customers trade their batteries for profit and accelerate their ROI, seeing firsthand the power of market-based incentives to drive battery adoption. When the right policies are in place, batteries don’t just save money—they make money, turning consumers into active participants in the energy market.
The Hidden Cost of Transmission Charges
Much of the demand component in energy pricing is billed as long-distance transmission charges, even though the power may never travel long distances. From a homeowner’s perspective, this creates an unfair system where their next-door neighbour pays high transmission fees despite the power originating from the same low-voltage network.
The problem becomes even more apparent with peer-to-peer energy trading. If a homeowner sells 1 kWh to their neighbour, the network may take over 20c/kWh in peak demand fees—supposedly to cover the cost of long-distance transmission from coal power plants. However, in reality, that energy was locally generated, stored, and sold using rooftop solar and battery storage.
This outdated pricing structure discourages local energy sharing and limits the true benefits of distributed energy resources.
The Future: Will Networks Price Themselves Out of Business?
Ironically, networks might be setting themselves up for failure. Given that the cost of home battery storage has dropped below the cost of these demand fees, homeowners can still make a profit despite the penalties. As more consumers adopt battery storage and peer-to-peer trading models, they will bypass the traditional grid fees altogether, leading to a self-reinforcing shift away from centralized electricity models. If utilities and regulators don’t adapt, they risk making themselves irrelevant in a future where distributed energy resources dominate.
A Time of Reckoning
Much like other industries that have faced disruption when technology costs drop, the electricity networks may soon find themselves at a crossroads. As decentralized energy becomes more accessible, the traditional grid model faces increasing pressure to evolve. We didn’t leave the stone age because we ran out of stones—rather, we moved forward because better solutions emerged. It will be interesting to see how networks choose to respond. The future of our energy system depends on getting this balance right.