Australia’s electrical utilities face “unexpected drops in electricity demand and lower average wholesale electricity prices,” after underestimating how much the combination of solar and battery storage will erode their sales in the years to come, top investment bank Morgan Stanley warns in a new report.
The bank finds that the Australian energy market “is seriously underestimating the growth of solar and battery storage,” DeSmogBlog reports, “and says the technology will be installed at rates four times quicker than the incumbent energy industry expects.”
The cost of storage battery installations will drop by 40% within two years, Morgan Stanley expects, triggering a “tipping point” for consumer uptake. While Australia’s Energy Market Operator is predicting the country will deploy 6.6 gigawatt-hours of battery storage by 2035, Morgan Stanley thinks it will get there by 2020. The bank “expects the market for battery storage to grow from about 2,000 Australian homes now to one million by 2020,” DeSmog notes. “But its ‘high case’ suggests the take-up could be double that—up to two million homes by 2020.”
A poll conducted in the run-up to Australia’s recent general election found that 71% of voters would be more likely to support a party that favoured distributed solar plus storage. (In the event, incumbent Prime Minister Malcolm Turnbull, widely regarded as lukewarm at best on climate, was declared the electoral winner of a Parliamentary minority over the past weekend.)
Tesla, Samsung, Sonnen, and Enphase are among global battery-makers rolling out products in the famously sun-baked country, which also has high electricity prices.
“We think the impact of solar and batteries will play out in a slow and steady fashion over time,” the report predicted, before “reaching a tipping point in the next few years.” The shift will show up “as unexpected drops in electricity demand (eg. hollowed out load duration curves) and lower average wholesale electricity prices and caps (which reflect volatility).”