energy companies embracing domestic solar and storage systems in scramble to protect profits - residential energy storage systems

With the emergence of domestic solar and storage systems, large utility companies have to scramble to protect their shrinking territory, and the front line of the national power struggle is rapidly being redrawn.
Six months ago, the three major power companies-AGL, Origin and EnergyAustralia-spent a lot of time and resources trying to achieve the large-scale and small-scale renewable energy targets (LRET and SRES)
Either cut or abolish.
Over the past few weeks, the comments have been about lucrative growth opportunities for their small residential solar companies.
Large utility companies listed in Australia
AGL and Origin
In a recent investor briefing, they said that their traditional business in the National Electricity Market (NEM)
The outlook is not optimistic.
A recent report by Bloomberg's New Energy Finance Department found that power generation from fossil-fuel generators has dropped by 9 since 2010. 5 per cent.
Demand for electricity fell by 6.
The same period was 7 percentage points, while Australia's economy grew by 9 percentage points.
According to NEM, coal prices fell by an average of 12 percentage points per year between 2007 and 2012, making coal production lower and lower.
"Falling prices have the greatest impact on fossil-fuel generators because their fuel and operating costs are not borne by renewable assets and are more vulnerable to spot prices," Bloomberg research notes . ".
"Since 2007, NEM fossil fuel's market revenue has fallen by more than half, Bloomberg found, after considering the cost of carbon delivery and wholesale energy sold or offset by renewable energy.
AGL, Origin and Hong Kong-
Australian energy companies, which account for more than third of NEM's capacity, said they do not intend to fully withdraw from coal-fired power generation in the short term, but at the same time, they did not deploy more resources there.
Another fairly large generator, Alinta, decided last week to shut down two uneconomical coal, a sign of the times
Power plants and associated coal mines are located in southern Australia.
Alinta noted that due to declining industrial demand and increased supply of renewable energy, excess power supply led to closure and loss of 400 jobs.
In the retail sector, the three giants are more dominant, with their market share soaring from around 75 between 2010 and 2014.
"Bold growth strategies are sometimes poorly implemented," Bloomberg said, and utilities are struggling to cope with the loss of growing consumers, a figure that has risen from around 20 in the same period.
"In order to retain and attract customers, energy retailers offer discounts in profit competition," Bloomberg said . ".
Stuck in the mud of their traditional commercial battlefield, at least for now, they have fired most of the bullets
In the policy War, vertically integrated utilities decided to adapt to the dangerous disruption caused by the progress of household renewable energy generation and storage, rather than fighting.
The front line has now moved to the other side of the home meter --
Away from Coal Valley, power grid and NEM-
On the roof of the suburbs
Just transferring the battle to the other side of the meter 15 cm has a huge impact on utilities and consumers.
A recent survey by Morgan Stanley's utility team found that consumers had a strong interest in fleeing the grid.
About half of the households surveyed said they were interested in solar and storage systems for about $10,000 and 10-
Annual return period.
Morgan Stanley believes that the cost of utility companies not adapting to the challenge will be huge.
Ignoring the continued financial blood of domestic solar and storage growth will lead to revenue cuts of AGL and Origin by $30 to $40 million by 2017 and by $100 million by 2020.
"We believe that existing companies will use their customer data, relationships and balance sheets to try to respond competitively, but we believe that [revenue]
"Streams may only partially offset corrections to core earnings," Morgan Stanley told customers . ".
"Assuming a market share of 20 million, we believe that Origin and AGL may recover about US dollars in loss earnings each year before the market matures.
"Last month, AGL versus solar-plus-
Store the home market, announcing the power advantage products of its new energy sector.
Lithium-ion batteries planned for sale AGL can store 6 KW-hours (kWh)
Suitable for solar energy
Dimensions of household solar equipment.
AGL said in an investor speech that the new energy sector will have a different culture from its declining core grid power business, which will be at the heart of its longer --
Long transition away from coal.
Given AGL's forecast, it is understandable that the home solar market could be worth as much as $2 billion a year by 2030.
AGL said that the new energy business will lose about $45 million this year and will reach a financial breakeven point by 2018.
By 2020, it is expected to generate $0. 4 billion in revenue, although most of it will come from low-income people
Install and continue margin business such as financial and service payments.
A few days after the AGL show, Origin made its own plan to become the dominant player in the solar field.
Origin has installed 80,000 solar units since 2001, making it the second largest player in the market.
Origin has been using a completely different strategy than AGL to drive its growth.
Its strategy is based onas-
Go, power purchase agreement for "zero cost-front.
Customers will be committed to 7 to 15-
The annual terms calculated by price are 70 lower than the current tariff.
Consumers gain immediate economic benefits and lock in sources for a long time
It aims to reduce its term relationship of "loss.
Origin said it expects a loss of $25 million in 2016 and even a loss next year.
While Origin told investors it has been experimenting with residential battery storage products, it has yet to commit to bundling solar and storage for its customers.
The third player
Energy Australia
Still testing its solar expansion and building a partnership with US
Based on phase energy.
It is believed that Australian energy has been closely following the development of storage packages in partnership with Tesla's Powerwall battery, which grabbed headlines next year.
Even if it is not released, Tesla's product proves to be a game changer.
The reneweconnome website reported that the price of the Legato storage system provided by AGL has dropped third in the past six months, mainly due to the upcoming Powerwall.
According to Morgan Stanley, the estimated return period for current solar and battery installations ranges from about 9 years in Queensland to 16 years in new state, depending on the supplier, spent a tedious and uneconomical 20 to 38 years in Victoria.
However, Tesla's decision to recover its R & D costs in a longer period of time than its competitors forced the industry to give a major rethink of pricing.
An industry insider told ABC that Tesla's Powerwall battery-the current Australian dollar level-could land and install at about $1,100 per kWh, the current price is about mid-2,500 kilometers per kilowatt hour. range units.
If this pricing system is adopted throughout the industry, it will shorten the return on investment time and drive faster growth.
Morgan Stanley said no large-scale grid migration is expected.
At least in the medium term
Mainly because the solar and battery systems are not able to ensure 99.
9. current power supply provided by the power grid.
Morgan Stanley pointed out: "To put it simply . . . . . . The home battery system will not have enough juice to spend the winter, especially in Victoria . ".
In addition to this, there are a large number of families-such as apartment residents and rent r --
There is not enough space on the roof, and funds or interest are not enough to completely unplug the grid.
Hugh Bromley, a research analyst at Bloomberg, said a big advantage of solar powerplus-
Storage is that it does not depend on subsidies.
"Its growth is organic, unlike the policy-driven, large-scale renewable power generation sector, and there is no subsidy that is currently not economically viable," Mr Bromley told ABC . ".
"Utility companies are re-aligning their business to focus more on customers, not technology," Mr brosley said . ".
Utilities are now well aware of the threat posed by roof solar --plus-
Risk of storage and so-called coal-
They fired a "death spiral" into their business ".
The biggest hope for big power companies to survive is their ability to adapt, not to confront or ignore threats.
Topic: electricity-energy-and-Solar utilities