Enabling More Distributed Energy In Our Electricity Grids

Since mid 2019, Renew has been working with a technical consultant, consumer-led steering committee and  industry/consumer reference group on a project that considers how best to manage the future integration of solar PV and other distributed community energy resources (CER – also known as DER) in our electricity grids. In particular, Renew is trying to understand the opportunities and costs for enabling much higher penetrations of CER in our grids over the next two decades.

Solar PV, as the most common DER in Australia, is reaching a point where it is sometimes causing or exacerbating technical problems in the grid. Nationally, around 30% of our homes now have solar PV (as of January 2022), and it’s increasing at a rapid rate – it was only 20% when this project started in 2019.

As a community organisation interested in the harnessing the potential of CER and fair treatment of households with it, Renew has been working to better understand the issues and opportunities of enabling more CER in the grid and to help inform the national debate around CER enablement. To do this, we have developed and undertaken two successive CER Enablement projects with the generous financial and strategic support of Energy Consumers Australia (ECA).

The CER Enablement project – stage 1

The first project commenced in late 2019 and was focused on understanding the technical issues and solutions to give us the informed view we needed to fully engage with the issues. We worked with energy consultants Energeia and used a three-step process:

1. develop consumer principles for CER management, defining the outcomes for households that any recommendations should deliver;
2. identify the range of technical issues caused, exacerbated, or revealed by CER feed-in, and the approaches that can be used to remediate them; and
3. assess the applicability and cost-effectiveness of various solutions to the various problems in different types of network situations and recommend optimal approaches that deliver the consumer benefit espoused in the principles.

This is all documented in our Discussion & Options paper (the technical paper, authored by Energeia), as well as a Summary Report (an overview and policy/advocacy-oriented report, authored by Renew). The process and reports have had significant input from industry and consumer stakeholders.

The modelling showed that while a few relatively simple and low-cost measures can be implemented to enable more CER in most parts of the grid, significant variation in energy usage patterns and network infrastructure in different places means that these are not always sufficient. Additionally, the continued growth in solar and battery uptake (and expected growth in EV uptake) means that these are only medium-term solutions, and larger scale and more dynamic measures will be needed in the future.

All up, the stage 1 project highlighted the incredible complexity of CER-integration issues and the great deal of work that still needs to be done. It showed us conclusively that:

• different distributors are at vastly different starting points regarding DER penetration and operational visibility, and this limited our ability to give specific guidance;
• to fully understand the benefits to consumers of CER enablement, the impact of CER on wholesale prices and the interactions between different parts of the network and and different types of CER must also be assessed; and
• a more comprehensive and sophisticated approach is needed to fully consider the cost–benefit relationships between different approaches in different parts of the same network.

The CER Enablement project – stage 2

In 2020, we secured more funding from ECA to do the more comprehensive analysis that stage 1 recommended. We worked again with Energeia, and also engaged CutlerMerz, another consultancy with energy expertise, to undertake peer review of Energeia’s work.

The second project used the CER enablement cost and effectiveness data from the first project by using its to inform whole-of-system modelling to figure out what types of strategies would maximise household benefits while maintaining necessary energy system security and reliability. Energeia used their sophisticated energy usage, wholesale market, and CER cost and operation models to simulate the operation of the energy system between 2020 and 2050. The starting point was where we actually were in 2020, and the end point was a ‘Consumer High DER’ scenario they developed with as much household-owned CER as possible that still produces net benefit after the costs of enablement are met – an idealised ‘best of all possible worlds’ that assumes no barriers to the cost-effective deployment of CER enablement measures in the greater energy system. And the net benefit was considerable: up to $69 billion in reduced costs to electricity consumers compared to the current trajectory.

This approach was designed to best identify the barriers to greater CER enablement. A number of barriers were identified – aspects of the energy system that obscure the true value of CER, constrain better enablement, and discourage using CER to support network operation.

The stage 2 project has produced a technical report (documenting the modelling approach and the detailed findings, authored by Energeia) and a brief overview paper (highlighting the main findings, authored by Renew). We are currently undertaking the final consultation with key stakeholders, and will soon publish an expanded version of the summary /overview paper that makes recommendations for further work and future advocacy.

For more information about this works please contact Senior Energy Analyst Dean Lombard at dean.lombard@renew.org.au.