Abstract:
Tesla recently introduced its Powerwall line of batteries, aimed at a sector of housing with solar electricity installed. This paper considers the economics behind mass introduction of batteries in the housing sector in the UK from the perspective of peak demand management. Utilities use differential tariffs (such as the Economy 7 tariff on Southern Electric in the UK) to encourage more homogeneous loads. Given current costs of battery systems, this work considers the rates of return that may be possible by buying electricity from the grid in times of low demand, and reselling at peak demand from the perspective of an average UK household. We consider the regulatory framework that would have to be in place to make this feasible and look at the effect a mass uptake of battery technology would have on peak demand management in the UK scenario. Overall however, it is found to not be economically feasible at current prices without heavy government subsidies.
