Financing and Distributing Benefits from Community Batteries
Community Batteries save money by storing energy when it is cheap and using energy from the batteries when it is expensive. They also help maintain the grid's stability by helping stabilise the grid electric parameters. The money saved is calculated by the Community Battery owner and checked by the grid operator. The battery owner wants a return on their investment and will charge the operator. The operator will, in turn, pass the cost on to the retailer, who will pass it on to the end customers. Who owns Community Batteries matters because most of the savings accrue to the owner. This article argues that Community Batteries should be owned by customers who benefit from the Batteries and have the most interest in operational efficiency.
Non-distributing Cooperatives of "behind the transformer" consumers are the most efficient organisations to own Community Batteries. The cooperative can decide how to share the savings between the investors and the consumer member (owners) of the Cooperative. A simple approach is to divide the savings between the investors and the consumers by asking the consumers to pay the savings amount in proportion to the amount of energy the consumers used from the grid. The consumers would purchase the Capital repaid to the investors and become investors themselves. The battery Capital can continue to supply the investors with an income or discounts on electricity, or the consumers can sell the Capital. If the government provided the initial Capital, they would get the money back, and members of the cooperatives would recycle the funds or reinvest the money in further energy savings.
The Non-distributing cooperatives will ensure that they receive the best value for money because, in the long run, they benefit the most from the savings. They will also cooperate and pass on knowledge to other similar cooperatives.
For example, assuming a government spends $50,000 to buy a Community Battery. Assume the battery saves a Cooperative of 100 consumers $5,000 a year or an average of $50 per consumer. The average consumer pays $50 and buys $50 of the Battery Capital from the government investor. The government now owns $45,000 worth of Capital and the customers own $5,000. The Cooperative sets rules on what the consumer can do with the Capital. For example, they can sell it to another consumer, use it to help pay their next year's invoice, or accumulate it in the Cooperative. Significantly all consumers acquire part of the Capital in proportion to their consumption. It means whoever pays for electricity accumulates Capital.
An alternative for the government is to sell the right to establish the Community Battery to a private company or a shareholder Cooperative. The government takes the money, the consumers pay the Battery owner, and the shareholders take the profits from the Cooperative. With non-distributing Cooperatives, the Capital in the Cooperative cannot leave the Cooperative. With shareholder ownership, the original investors take the profits and retain the Capital.
When private investors fund and invest in Community Batteries, the outcome is worse for consumers and worse for the government that sells, gives away or subsidises the right to instal community batteries.