Traditional Cost-benefit analysis using discounted cash flows says that community batteries are “uneconomic”. However, suppose a community owns the battery. In that case, community batteries are economically viable because future benefits are not discounted. If the savings from battery use are reinvested in further electricity savings, batteries show a high return on investment.
The following is a request to the ACT government for assistance in allowing communities to own and operate batteries.
Community Owned Community Batteries
This proposal requests the ACT government’s assistance in
- Discussions with the Australian Energy Regulator to allow Community Owned Batteries to operate in the five-minute wholesale market.
- Allowing individual households to access government climate mitigation subsidies through a Community Organisation.
- Allowing Community Organisations that run a business to access government funding and support and tenders available to companies.
- Assisting in establishing the rules for Community Organisations that operate businesses with collective ownership without shareholders and governed by sortition democracies.
- Requesting Hall and other Gungahlin Suburbs be trial sites for the Federal Government’s proposed Battery Trials.
Community-owned batteries are technically and economically viable. They can be deployed quickly and require no change to existing systems and will reduce the cost of electricity to every community that installs one. They can include home batteries and allow those who cannot install a battery to share in the subsidisation of home batteries without penalising homeowners.
The barrier to their adoption is government-controlled rules and regulations.
A Distributed Electricity System
A distributed electricity system has nodes where each node can have production, consumption or storage. The system is like the Internet, except the flows are controlled by varying the price of electricity and operate as a set of smaller networks. Each node determines whether it will buy or sell electricity. The likely outcome will be that the network regulator can set pricing parameters for different areas of the network and publish the anticipated demand in different areas, and investment will follow. It can test this approach with Community Owned Batteries in suburban Canberra.
Rewiring Australia
Dr Saul Griffith’s proposal to rewire Australia means that much of the electrification investment is spent in buildings. At present, it is not in the interests of all the owners of buildings to invest in electrification. For example, landlords have little interest in reducing living costs for renters, and renters have little incentive to invest to benefit the next occupants. The solution to this problem is for occupants to receive Community Capital each time they pay for electricity. Landlords will welcome this as it gives occupants lower living costs without costing landlords anything and makes their properties more valuable. Community Capital can also provide people who cannot afford to electrify buildings with Capital and investment expertise. Community Capital will accelerate the shift to renewables, provide the funds without any government incentives, and save the government the cost of rewiring its facilities.
Community-Owned Batteries compared to Corporate-Owned Batteries.
The article Efficient Capital Distribution shows that after five years, Community Owned Batteries will double the value of renewable assets in a Community compared to Corporate Service Providers. They will give investors either double the allocated pension returns or capital returns on super equal to the best long-term industry funds. These results occur because Community Capital operates efficiently and saves money compared to the same investments funded with Equity Capital.
Social Capital
Social capital is “the networks of relationships among people who live and work in a particular society, enabling that society to function effectively”.[1] It involves the effective functioning of social groups through interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation, and reciprocity. Social capital is a measure of the value of resources, both tangible (e.g., public spaces, private property) and intangible (e.g., actors, human capital, people), and the impact that these relationships have on the resources involved in each relationship, and on larger groups. Some have described it as a form of capital that produces public goods for a common purpose — Wikipedia
Community Capital will build Social Capital in the village of Hall. Community Batteries will put an economic value on producing a public good for a common purpose at half the cost of a competitive marketplace. Community Capital can do the same for other public goods created for a public purpose, including solar generation.
Well-Being Budget
The tariff plans of Evoenergy and the failure of the regulator to allow local investment in electricity infrastructure means that those who can afford home batteries — currently subsidised by the government — will transfer wealth from the less well-off to those who need it the least.
If the government is serious about Well-Being, Community Owned Batteries must be a priority. All in a local community will benefit and reduce the need for governments to correct the unfair structural balance in society caused by regulation and government bias towards private corporations at the expense of communities of voters.
Funding Capital Works with Community Capital will rapidly increase Community well-being compared to Loan or Equity funding. There are two reasons:
- Community Capital more than doubles the rate of Community infrastructure funding.
- The increase in wealth goes to all buyers of goods and services, including those without wealth.
Wealth to people without wealth increases well-being at a faster rate than increasing the wealth of people who have wealth. Community Capital provides wealth to all, and local communities can decide to accelerate the average well-being by giving more to those with the least. Increasing the well-being of those with few resources increases the well-being rate for the whole community. Instead of a society with increasing GDP, Community Capital will increase measurable well-being for the same GDP.
References
An Alternative to Rentier Capitalism summarises the economic and social advantages of increasing investment to reduce resource consumption to benefit all.
Community Capital Algorithm outlines an algorithm for Community Batteries. Different products will require slightly different algorithms, but the principles will remain the same.
Submission to the Review of the Reserve Bank outlines how the Reserve Bank, along with governments, can fine-tune the money supply using Community Capital.
An Alternative to the Safeguards Policy describes a positive rather than a punitive approach to phasing out fossil fuel industries.
Submission to the National Electric Vehicle Strategy proposes individual custodianship of community-owned vehicles.
Permanent Housing Markets create affordable housing for all with individual custodianship of housing.
