Posted by: @broadsman

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I am about to have a Powerwall 3 fitted to help with the cost of running my heat pump. ( Ignore the capital cost of the battery!). I have no solar and  intend to charge at the cheap Cosy rates and discharge during the standard rate times.

 However, I saw a Youtube video yesterday which suggested that Octopus might be about to introduce a special Heat Pump tariff so that they can be run at the Cosy cheap rates 24/7.. If this turns out to be true, would there be any point in having the battery, apart from occasional Backup?

I'm in a similar boat, except I have 3.6kWp of solar too. I currently have an application in to install a Tesla PW3 and additional 3.6kWp of solar, but am doubtful it will be granted by the DNO.

Like you, I'm on the Octopus Cosy tariff, and estimate that the 13.5kWh capacity of the PW3 would see me through the 6 hour periods between cheap rate slots in winter, and in summer the battery capacity will cover a full day on a single charge.

Financially, the numbers do not stack up for the battery alone, but there are other considerations for us such as comfort and use (as we currently switch off during peak rates), and the green / grid independence  aspects of eliminating our draw on the grid at peak times.

I take @transparent's view that it's difficult to price something when there is no certainty over pricing or tariffs in 12 months time, let alone over the 10 years plus life of a battery. For me, adding as much solar and battery as possible, at a price I'm comfortable with, means we maximise our resilience to absorb any future pricing changes down the line.

On a slightly different note, @transparent and I had taken a look at my local infrastructure (substation etc) and concluded I was unlikely to receive a favourable DNO offer. I've done a little more research whilst I await the DNO responses. My limited understanding is that the DNO is responsible for keeping mains voltage at 230v+/-10% (so 252v max). Crudely, electricity flows from high voltage to low voltage, so when your inverter wants to export electricity, it increases the voltage to allow that export which has an effect on the local voltage, which the DNO must keep below 252v. I've been monitoring the voltage in my house over the last couple days, and it varies between around 243v and 249v. It's currently sat at around 248v at midday whilst the sun is out and we are exporting. Given it's already high and pretty close to the maximum permitted 252v, I understand @transparent view that we are unlikely to receive a favourable offer, so our PW3 + additional solar plans may be academic anyway.

@jamespa 

Im interested in that comment. 

I would like, and can afford, to get a battery.  But I cant, however hard I try, make the business case pay (and I dont see an environmental case, at least not yet).  So at present I am tarrif surfing in the hope that battery prices will come down by the 30% thats needed to make it pay.  I have an EV, a heat pump and 4kWp of solar.

Er James, lol.... I wrote about 'why' with my explanation of Demand-side Flexibility - a battery let's you escape the surge pricing that will inevitably become part of electricity pricing. 😁

And I mean 'inevitably'. [see below]

Meanwhile, I'm fascinated by the ROI approach to these things because we don't really know the economics which rely on too much futurology. I understand it more for those who can just-about-scrape the funds although the same futurology problem applies.  

However the landscape of energy appears right now is not how it will appear in the coming years. There's huge shake-ups on the horizon. Which is precisely why I am working on it. 🫣

Posted by: @lucia

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@jamespa 

Im interested in that comment. 

I would like, and can afford, to get a battery.  But I cant, however hard I try, make the business case pay (and I dont see an environmental case, at least not yet).  So at present I am tarrif surfing in the hope that battery prices will come down by the 30% thats needed to make it pay.  I have an EV, a heat pump and 4kWp of solar.

Er James, lol.... I wrote about 'why' with my explanation of Demand-side Flexibility - a battery let's you escape the surge pricing that will inevitably become part of electricity pricing. 😁

And I mean 'inevitably'. [see below]

Meanwhile, I'm fascinated by the ROI approach to these things because we don't really know the economics which rely on too much futurology. I understand it more for those who can just-about-scrape the funds although the same futurology problem applies.  

However the landscape of energy appears right now is not how it will appear in the coming years. There's huge shake-ups on the horizon. Which is precisely why I am working on it. 🫣

Exactly, and as in my case above, we may have left it too late as our neighbours have sucked up all the local capacity leaving us with just the standard 3.68kW allowable DNO offer.

By the time batteries are 'affordable' on a ROI basis, the same may apply for many others and people find themselves unable to get the required DNO permissions to install them.

Interestingly, we had a similar situation with fibre broadband (FTTC) in our village, whereby the local cabinet served copper connections to 512 properties, but only had space for up to 128 fibre connections, so it was first come, first served and everyone else after the first 128 properties were told no. So this issue does not just affect the energy infrastructure industry.

Posted by: @old_scientist

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Exactly, and as in my case above, we may have left it too late as our neighbours have sucked up all the local capacity leaving us with just the standard 3.68kW allowable DNO offer.

By the time batteries are affordable, the same may apply for many others and people find themselves unable to get the required DNO permissions to install them.

Thanks

I presume 3.86kW applies to export (is this correct?). 

I already have 3.86kW export capacity for the solar, Im guessing they are unlikely to allow me any more anyway

But I confess I hadn't factored into my ROI calculations risk of future blocks on doing things with batteries!

Posted by: @lucia

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Meanwhile, I'm fascinated by the ROI approach to these things because we don't really know the economics which rely on too much futurology. I understand it more for those who can just-about-scrape the funds although the same futurology problem applies.  

Im using a fairly crude approach (attached - but be warned there may be errors!) based on current tariffs and estimated consumption split, but with an allowance

for the cost of capital (ie the interest paid or lost on the capital price of the battery).  Most battery manufacturers seem to warranty for 10 or max 15 years so Im looking for at worst break even in

that time.  I cant get close at present to break even on typically 5K investment for 10kWh or 7K for 20kWh.  bring prices down by 2k on either and Id be there.

My solar inverter is now 14 years old so, assuming I have to replace it sometime soon (they were said to have a lifetime of 10 years), then this would probably come close enough to tipping the balance.

Posted by: @jamespa

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Posted by: @old_scientist

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Exactly, and as in my case above, we may have left it too late as our neighbours have sucked up all the local capacity leaving us with just the standard 3.68kW allowable DNO offer.

By the time batteries are affordable, the same may apply for many others and people find themselves unable to get the required DNO permissions to install them.

Thanks

I presume 3.86kW applies to export (is this correct?). 

I already have 3.86kW export capacity for the solar, Im guessing they are unlikely to allow me any more anyway

But I confess I hadn't factored into my ROI calculations risk of future blocks on doing things with batteries!

 

Not necessarily. Each DNO application is treated on it's merits, and they will allow it if they can. The key determining factor is likely the spare capacity in your locality. If there is plenty of spare grid capacity then you may get the full amount you apply for. If not, then you may get nothing more than the 3.68kW that everyone is entitled to. Totally depends where you live, how much capacity there is on the local grid and how much of that capacity has already been allocated to your neighbours. Generally, as I understand it, you don't want to be the last person in your neighbourhood to make a DNO application.

I think things would become clearer if I momentarily pulled us back to the title of this Topic.
For the moment, please allow me to ignore the issue of exporting to the grid.

Let's return to the ToU Tariff I used in my earlier illustration...
... but we'll add a Storage Battery which can be recharged from the grid:

The householder will obviously decide to undertake that recharge during the cheapest rate of the Tariff,
which is the four hours between 00:30 - 04:30

During that period the battery must import enough energy to meet household consumption for the rest of the day.

In other words, the area under the red line on the graph must equal (or be greater than) the area under the purple line.

In the above example the design of the Storage Battery is such that it ramps up to the required current over several minutes.
It's an attempt by the manufacturer to avoid surges on the grid, and allow NESO to bring further generation on stream.

That's not a statutory requirement for a storage battery, but perhaps it should be!

Even so, the fact that there is only 4 hours at the cheapest rate within this ToU Tariff, means that the total current will be very high in order to fill the battery.

That has the same adverse effect on the grid as does charging an EV:

This is a real-life plot from a monitored local substation, courtesy of National Grid Electricity Distribution (NGED).

Because the houses supplied from that local substation all have single-phase feeds, there is significant phase imbalance.
That leads to losses in the transformer, which gets hot.

About 10% of the electricity generation which enters the grid is 'wasted' at the final node - the local substation.

If that was the only adverse effect it would be bad enough, but look at how much current flows through the Neutral wire as a result of that imbalance.

A high proportion of the underground 'cables in the road' which feed our homes have a smaller Neutral conductor.
It can't carry the same current as the three phases, and it too gets hot.

When those cables were originally installed it was assumed that there would be very little demand overnight.
They were deliberately under-sized, with the expectation that the heat build up during the evening would be dissipated into the soil before dawn.

That's no longer the case.

We've added EV chargers and batteries to the load which went to 'storage radiators'
and there isn't now a cool down period.

Thermal stress in the cable leads to breakdown of the insulation, and the cable fails.

Despite engineers attending on-site to replace blown fuses for the three phases, the only real remedy is to dig up the road and replace the damaged cable.

Suppliers aren't concerned about these issues.

They define their tariffs based on the profit margins they can achieve from purchasing electricity on the wholesale markets.

Those Tariffs would cause lower substation losses and fewer power-cuts if the cheap-rate period was longer than four hours.
But there's no financial incentive for them to do so...

... and Ofgem doesn't intervene because it has interpreted its regulatory role over Suppliers solely in financial terms.

Now let's assume that the same ToU Tariff is being used by a house which has both a Storage Battery and a roof covered in Solar Panels.

There must now be a Hybrid Inverter in the house.
The Storage Battery can be charged either from the grid or from solar, but not both simultaneously.

We'll look at the typical grid demand which might occur close to the two Equinoxes.
The ratio of day/night is roughly even, and the weather is mostly sunny (like it's been for the last week).

The Householder checks the weather and knows that the morning will be sunny, with cloud gradually increasing during the afternoon.

The yellow area shows the solar generation which will be stored in the battery whilst it's also supplying the house during the day.

If the weather forecast can be relied on, then the amount of electricity which needs importing from the grid is much lower.

Thus the area of the graph below the red line, plus the yellow (solar) area must be at least equal to the area beneath the purple line.

As @lucia so accurately stated it earlier today:

Posted by: @lucia

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But batteries & solar for those who can afford them are a no-brainer.

Not only does the battery plus solar argument make sense for for the householder,
it's also the combination which is best for the grid.

Sadly, this is ignored by Ofgem for the same reason as before...

it has interpreted its regulatory role over Suppliers solely in financial terms.

The Energy Industry Regulator isn't providing incentives for strategies which are better: neither for consumers, nor for the grid infrastructure.

To round off this series of illustrations, let me now add in a Heat Pump to the house.

We're going to assume that it's been properly commissioned with the appropriate WC curve and isn't cycling off/on.

Since the ASHP will be running continuously, it simply pushes up total consumption.
The new electricity consumption is the solid purple line, and the dotted line shows where it was previously.

If the solar input remains as before, then the additional energy must be taken from the grid.

As before, the area beneath the red line, plus the yellow area, must be at least equal to the area beneath the purple line.

This too isn't great news for the resilience of the grid.
The higher demand peak between 00:30 - 04:30 is going to be increasing losses and also the risk of damage to the infrastructure.

Either the householder should be installing more solar panels,
or Suppliers need to be told to have much longer low-cost periods for households with heat-pumps.

And that should be the remit of Ofgem...
... if they understood how the grid works, which they might not  😟 

If you've been following the above, you will appreciate that my explanations of Tariffs have been 'informed' by the Ofgem Consultation on Zero Standing Charge Tariffs, which they'd like to see available from Suppliers by the end of 2025.

If you'd like to comment on that proposal, but don't feel able to wade through Ofgem's own multi-page explanations of why/how they need to protect Suppliers by raising the price-per-unit, then you can simply write what you wish to say and submit it by email to standingcharges@ofgem.gov.uk

The deadline for submissions is 20th March, which is in one week's time.

Submissions made by individual consumers will not be published by Ofgem.
In practice very few consumers ever respond to such consultations, which is why the opinions of the Energy Sector Companies tend to dominate policy.

Feel free to use any of my diagrams (above) and explanations in what you send in.

You can also directly refer to the URL of this Topic.
It might be of interest to Ofgem that consumers are discussing such issues in an open forum.

I would suggest that anything you write needs to be clear, direct and on-topic.
It needn't be technical.
I include ethical comments!

For example, here's their Question-5 and my response:

5 Please share your feedback on the modelling we have undertaken, including what additional risks or considerations we should be taking
into account, and whether there are additional or more appropriate consumption scenarios to consider.

You have jumped to the assumption that the costs of Zero Standing Charge tariffs must be loaded onto the price-per-kWh for the SAME CONSUMER.

See your comment 4 pages back "... a likely revenue gap will emerge between what suppliers would recover under the existing price cap rates, and what
they would recover with a zero standing charge variant. To close this revenue gap, the unit rates on the zero standing charge tariff need to be increased
further."

That assumption is invalid.

Energy Suppliers can retain sufficient revenue without the need to be 'fair' to each individual household. Greater costs need to be borne by those
consumers who make greatest use of the energy supply networks, and particularly by households which are profligate with their energy demands.

@transparent I would be interested to know how anyone determines ‘consumers who make greatest use of the energy supply networks, and particularly by households which are profligate with their energy demands.’ Whereas consumption may be determined by metering energy use, how would one determine ‘profligate’ energy demands please? Regards, Toodles.

In this context @toodles being profligate would be a household which doesn't reduce its energy consumption during the high-demand periods within the tariff.

Thus, if daily block tariffs were implemented, a profligate consumer would use electricity irrespective of whether it brought them into the extra-charge envelope.

I would consider the block tariff acceptable if it meant that a low-consumption household was able to benefit from a tariff which allows them zero standing charge.

Our ability to shift consumption into 'grid friendly' periods of the day is easier if block tariffs existed.
It doesn't actually penalise a consumer for using electricity during that time... only if they persist in using so much that the block tariff comes into play.

@transparent At one time (quite a few moons ago!), the suppliers had a scheme whereby the first xxxkWh were at a certain rate and then above that threshold, the cost per unit increased for that billing period. It rather sounds as if your proposal is somewhat similar?

I feel that those who use least (probably because they can’t afford to use more energy anyway) should benefit (FSVO ‘benefit’!) from a lower unit cost and unless they rose above a defined consumption per quarter* might avoid standing charges - thus meaning considerate users of restricted monetary means would be least burdened by the extortionate price of energy.

*I am uncertain as to how this would be implemented for consumers on pre-payment meters as there is probably no means of time related consumption measurement built into ‘dumb meters’ is there? Regards, Toodles.

I am unsure that tweaking tarrif is going to help enough of those households on low income in my experience. I struggle to see how block tarrif etc are targeted enough on ability to pay. Block tarrif is more targeted on ability to shift and ability to cut electricity, that is not the same in my experience. 

It is important to be clear about the purpose and outcome you are looking to achieve, else you may end up with a mismatch between the solution and the original issue you are trying to address.

We need either a social tarrif which is materially cheaper or payments via the benefits system. So either a levy on everyone elses energy bill or higher taxes, and i can see the government raising taxes.