BIDIRECTIONAL FLOW OF ENERGY AND WHAT THE RESULTING
MODERN ENERGY ECOSYSTEM WILL LOOK LIKE
1. Please could you give us a brief background on your experience when it comes to Distributed Energy Resources?
GHD have been engineering DER systems for our clients over recent years. In Western Australia we have contributed to the construction of DER systems for Horizon Power and Western Power. Regional towns that are dependent upon diesel are fertile for the rollout of Distributed Energy Resources that comprise of solar PV, batteries and traditional thermal generation.
GHD has developed tools that help identify where stand-alone power systems and microgrids incorporating DER can be deployed as cost effective alternatives to traditional electricity networks. We have also worked with AEMO to help understand some of the power system security challenges that may arise in the future as the level of DER connected to the South West Interconnected System continues to grow.
Within GHD, I am responsible for the Australian Energy & Resources business which includes power generation and renewable energy.
2. What do you think are the biggest challenges in integrating prosumers into the modern energy system? It is technical, commercial or something else?
The increasing level of roof-top PV systems coupled and the emerging integration of those systems with battery energy storage is allowing electricity customers to both consume and produce power. The prosumer is now able to choose when and how much power they inject or withdraw from the electricity network. Often these decisions are not aligned with the optimal delivery of a secure power system and can result in technical challenges such as a net injection of power into a distribution network. They were originally designed to be passive networks carrying power flow in one direction only. Managing the bidirectional flow while minimising the cost to network customers is a challenge.
Also having a regulatory framework which recognises the full value of DER and passing the relevant benefits to the consumers is critical for enabling the consumer uptake of DER and changing the consumer behaviour to become prosumers. The business models of other participants will adopt and change once a clear direction is provided by signalling future energy strategy and vision for implementing this strategy. It is important that this is not just seen as a technical issue, the regulations governing the operation of the power system and our energy markets also need to be revised to enable the generators, retailers, prosumers, networks and system operators to work in a collective and optimal manner.
Emerging digital technologies such as The Internet of Things and the distributed ledger have the potential to enable this integration and address emerging challenges. We are increasingly seeing the application of these technologies around the globe and expect this to accelerate over the years to come in Australia.
3. If a system that allows for a bidirectional flow of energy (from prosumers to the grid and back) - what do you imagine is the future business model of grids that allows for such a capacity? How different will it be from the existing grid business model?
The role of the network is changing and is no longer defined by the one way carriage of power from generators to passive consumers. In the future there may be many “community cooperative” type schemes that develop to enable the increased uptake of DER technologies and share energy between each other. In this scenario the network still can provide value by providing a means to allow the sharing of resources between adjacent communities, or by potentially providing access to back-up power during extended periods with low renewable generation from DER. The network also allows for competition between large scale power generators and power generated from local DER helping to drive the cost of energy down.
The value that some customers derive from a grid connection will no longer be dominated by the quantity of energy supplied. It is therefore likely that new pricing arrangements will also be required that better reflect the services that customers are actually obtaining from their connection to the network.
4. Do you think home batteries uptake will be similar to that of solar PV? And what do you think is the role of policy in influencing consumer uptake of new energy solutions?
Yes - battery energy storage uptake will increase as costs continue to come down and battery technologies mature. Policy will play in a role in influencing the timing of investment signals that will better enable households to decide when battery investment is justified
Consumer home batteries will be also be significantly influenced by continued development and uptake of electric vehicles. A change of the nation’s vehicle fleet to electric vehicles will most certainly drive the costs of home batteries down too and will make them more accessible. Coupled with the correct regulatory framework that enables the benefits of energy storage to be truly passed on to households, home systems will become even more financially attractive.
5. What’s the status of Internet of Things and Behind the Meter technologies – how far away are we from their mass roll out?
There is already a mature IOT offering in the market in regards to metering and we are seeing an increase in its usage across various retailers. The early data on market adoption is promising and we anticipate this will be the standard sooner rather than later. GHD has observed start-up energy retailers offering monitoring solutions as part of their offering, however increasingly established market players have too followed the trend. The consumer’s expectation of detailed information on their energy usage, solar and battery storage performance is like to drive this adoption rather than regulation and policy.
Generators and regulators are now able to leverage and benefit off this momentum to inform DER system and technology requirements as well as developing their own digital capability to process the data for their own needs. Regulators will have to resolve challenges around data ownership and likely trends of paying for the data produced by the prosumer.
6. Which markets or companies around the world are leading the way in terms of integrating DERs that you’re aware of?
We have a great example of DER development and integration right here in Western Australia. Horizon Power, the states regional utility, is leading the nation on the use of microgrids. Trials have already demonstrated that DER systems can supply electricity more cheaply, safety and reliably than traditional poles and wires and successfully navigate the challenges of the combined forces of decentralisation, digitalisation and decarbonisation. We see this as a perfect canvass for developing DER technical excellence.
GHD is a founding member of the newly formed International Microgrid Association. Through this affiliation we have observed the pioneering DER development work in other states and regions.
Craig will be the panel moderator on 12 June on Generator Panel: What generation mix is required to deliver affordable and reliable energy? (16:30) at Australian Energy Week.
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