Large energy companies are all building giant grid-scale batteries capable of supporting thousands of homes for around two to four hours at a time, while individual homeowners who have solar panels are increasingly installing their own smaller batteries.

Ausgrid, which runs the power poles and wires across swathes of central Sydney, the Central Coast and the Hunter Valley, is focusing on the deployment of a different type of battery, one that sits in the middle ground between grid-scale and small-scale, known as the “community battery”.

Placing a battery the size of a small shed somewhere like a substation or a roadside reserve could address grid stability issues, the company says, and enable a number of households to benefit from battery storage without having to fork out for a battery of their own, which can regularly cost more than $10,000.

“Effectively, an end customer can sign up to a virtual partition, without the significant upfront costs, making the financial advantages of battery storage available to those who might not have the financial wherewithal to purchase their own battery system,” says Ausgrid head of distributed resources Rob Amphlett Lewis.

“That’s important because we don’t think that the benefits of batteries should only be for homeowners with the capital available for them to make their own purchase.”

Household batteries typically range from five kilowatt-hours to 15 kilowatt-hours, whereas Ausgrid’s community-scale batteries are 25 to 100 times bigger, with a capacity of up to 500 kilowatt-hours. “Now we are moving to rolling out five-megawatt batteries, so these are 5000 kilowatts, 10 times bigger than the ones we’ve done to date,” says Amphlett Lewis.

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“Those really do hit the sweet spot of being lower-cost, but low enough in the system to provide the other benefits.”

The Albanese government’s $200 million Community Batteries for Household Solar program is underwriting the deployment of 400 community batteries. The federal energy department is delivering 58 of those batteries, and the Australian Renewable Energy Agency (ARENA) was allocated $171 million to deliver the remaining 342.

ARENA associate director of business development Leon Chanter says the level of interest from applicants for the $120 million first round of grant funding was surprisingly high.

“We got requests for $1.3 billion,” he says. “It was an enormous, unexpected response.”

While community batteries are not yet commercial, Chanter says the funding is expected to push the technology forward.

In the past six months, Ausgrid, a funding recipient, has rolled out community batteries in Cabarita, Narara, North Epping and Warriewood. It plans to deploy three more in the coming weeks.

“Next year, we are planning to roll out eight of the bigger five-megawatt batteries across the network as well,” Amphlett Lewis says.

Local opposition to new energy projects needed to modernise the grid, particularly transmission lines, has become one of the greatest obstacles for Australia’s shift to cleaner power. According to Ausgrid, surveys indicate community batteries are considered lower-impact, and they have a relatively high level of support: 75 per cent of respondents say they would be comfortable having them included in their distribution networks.

The company says it is investigating options to house its next community batteries alongside existing electrical infrastructure, such as substations.

“It’s horses for courses. Some communities love them but there are always going to be some people who’d rather not have them, so that’s why we are moving to find the least social-impact path,” Amphlett Lewis says.

In Victoria, the Allan government is targeting the rollout of 100 community-scale batteries. Grants are grants open to councils, community groups, businesses, developers and not-for-profit organisations.

Energy Minister Lily D’Ambrosio said the $42 million program, which had already funded 25 community batteries, would improve local energy network reliability, reduce power outages and enable more households to benefit from rooftop solar.

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