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Ausgrid turns to rooftop solar to save on network costs

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Oh, the irony of it all. Ausgrid, one of the country’s biggest electricity network operators in Australia, is looking to install more rooftop solar as a way of saving money on network investment.

Irony? Yes, because for the last few years – ever since the rooftop solar boom took off – rooftop solar has been decried by its critics as variously a sponge on society, the rich feeding off the poor and a grotesque imposition on the networks.

Now, the networks are turning to rooftop solar to actually reduce their costs – confirmation, if any was needed, of some of the many benefits of rooftop solar, which has already been shown to reduce, narrow and delay peak demand, and reduce wholesale electricity costs by a significant amount.

Rooftop solar – along with battery storage – is also the technology at the core of the development of renewables based micro-grids, which networks are starting to deploy in regional areas to reduce the risk of fires and storm damage, and offer a more secure, reliable and affordable mini grid.

Ausgrid – which is based around the Sydney metropolitan area and the Central Coast and Hunter Valley,  is now looking to rooftop solar as a key tool to offset some of the billions of dollars it spends on replacing ageing network infrastructure.

It is offering incentives of $250 per kilowatt installed to encourage the installation of solar on the rooftops of warehouses and other industrial facilities in Sydney suburbs such as Auburn, Erskineville, Alexandria, Redfern, Randwick, Waterloo and Kingsford Smith.

The idea is to use the rooftop solar, along with energy efficiency, as a way to reduce grid demand and so push out the need for Ausgrid to replace that ageing network infrastructure.

Such replacements will account for around 80 per cent of their operating expenditure over the next decade, and are usually made to prevent a “major equipment failure” that would otherwise cut off power to thousands.

“We consider solar power systems and energy efficiency retrofit activities would offer permanent demand reductions over the typical network need period once installed,” Ausgrid says in a tender document.

Rooftop solar on industrial rooftops is being targeted because it would coincide with the actual demand from the business activities that take place under the rooftop. And it may lead the way to more innovative solutions such as peer to peer trading and local micro-grids.

Ausgrid is allocating up to $2 million for this trial to see if encouraging more rooftop solar in a certain area can help defray costs. If successful it could be used across the network.

The potential is huge: Using rooftop solar can be a cheaper alternative and means those assets – which have burned big holes in consumer wallets – can be used for longer.

Ausgrid is also looking to encourage more efficient commercial lighting, and is offering retrofits at the equivalent of $25 per energy saving certificate (used in the NSW energy efficiency market), to further reduce demand.

Ausgrid says it regards rooftop solar and energy efficient lighting as “permanent” reductions in demand because once installed, the reduction can be counted on.

It is also looking for “temporary” reductions – things it can call on at certain times – which may include battery storage, load shedding and other demand response initiatives. Diesel gen-sets and co-genertaion and tri-generation will also be considered.

Mark Byrne, an energy expert from the Total Environment Centre who has been critical of excess grid costs, says Ausgrid has one the lowest uptakes of rooftop solar of any network in Australia, thanks in large part to the large number of apartment buildings in the Sydney region.

“Ausgrid has little need to augment the network in most residential areas, thanks to past gold-plating of the network in response to overly optimistic projections of demand growth and overly stringent reliability requirements imposed by the state government,” Byrne says.

“But there are pockets of the network where business demand is increasing, placing a strain on some old cables and substation infrastructure.

“The great thing about rooftop solar in these areas is that solar energy generation matches the peak demand period in the middle of the day.

“But solar is intermittent, so it would be good to see Ausgrid offering similar incentives to install batteries on the same buildings, so the network can rely on lower demand from the grid on cloudy days too.”

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What’s interesting about this initiative is that it is not just targeting the peaks – which are responsible for much of the over-build and gold-plating in Australia’s networks – but average demand (see graph above from Ausgrid’s tender documents).

Ausgrid’s documents note that demand response from the reduction in load from air conditioners would provide material support on peak summer days but might offer limited demand reductions during average summer days when offices, factories and homes do not have them switched on.

Diesel generators can do the job, but are not so great because of noise, environment and legal issues.

In contrast, changes in demand from energy efficiency or new solar power systems would offer permanent reductions which might vary less day to day or be restricted to select days,” it notes.

Byrne notes that if this tender is successful, it might also reduce the need for Ausgrid and TransGrid to spend an estimated $300 million in the next five years on replacing old high voltage cables serving central Sydney.

“We would also like to see Ausgrid go one step further and look at whether solar and batteries could work together to create more microgrids or embedded networks in areas like industrial estates and new housing developments,” he says.

“These could be largely self-sufficient, relying on grid supply only in periods of very high demand or when there are outages in the local grid.

“Local energy trading would be the logical next step, although that probably needs a regulatory change so that customers can have different contracts for their grid imports and their exports to the local network.”

The shift in focus from networks to seeing rooftop solar as a benefit, rather than an impost, comes as regulators and market operators recognise the ability of rooftop solar to reduce peak demand, and effectively push demand peaks to a lower level in the evening rather than mid afternoon.

It also comes after several studies, including this one, note the considerable savings on wholesale electricity costs from rooftop solar. By lowering demand during the peaks, rooftop solar lessens the ability of big generators to push up prices to high levels.

This study put the overall saving at billions of dollars, a handsome return on the cost of federal incentives for small rooftop solar installations.  

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  • David leitch

    This is real progress and great to read about.

    • Andy Saunders

      Those areas are full of daytime loads, so the peak is probably middle of the day. Good fit for solar without storage.

      I wonder if Ausgrid would get to control the power flows if there was storage, or the property owner? Different motivations…

      I would suppose the property owner, given the Ausgrid subsidy is maybe 10% of the cost, but then it would be an interesting exercise to see how exports get controlled.

    • solarguy

      Ditto!

    • Ren Stimpy

      all power to RE by me, but my below par eyes can’t discern jack shit from that graph, and clicking on it doesn’t enlarge it.

  • Roger Franklin

    Clearly Ausgrid did not clear this with Josh, Matt or the Coal Lobby group before getting this message out there. Come on Ausgrid – enough with being logical and reasonable – get with the program – Coal is the answer, but perhaps not Brown Coal – seems that Morrison is a little overly sensitive to that!!

    On a serious note – Nice one Ausgrid!

  • Joe

    I think the Sanjeev and his plans to power his steelworks with RE has set the cats amongst the pigeons so to speak. But really it is a no brainer to solarise industrial sites. Schools have started to solarise their rooves. Factory sites have hectares of roof space sitting there for the taking.

    • mick

      yep cut aircon use by providing shade too

    • DevMac

      What I find strange is that this wasn’t happening much earlier. Small industry, business, schools, etc. have usage profiles that much more closely match solar power provision than households, generally speaking.

      • Joe

        Better late than never that they are getting a roll on.

  • Chris Fraser

    Excellent. Let’s hope the STCs are not changed from their existing fate.

  • Robert Westinghouse

    About time…the science community has been taking about regional, micro-grids, PV and batteries for years….blow me down…but will the LNP see the elephant in the room….no dumb ars*

  • Hettie

    Could it be that the great ship renewable energy has at last overcome the drag of inertia, and is getting underway?
    If so, like all great ships once in motion, it will take one hell of a lot of stopping. Far more than than the terminally ineffectual coalition government can muster despite all its malice.
    In any case, if the s44 issues that have come to light in the last couple of days re Parry and Frydenberg bring them down, the call for an audit of eligibility of all Members and Senators will be overwhelming, and we could soon have a change of government, a return to sanity.
    Puhleeeeze.

    • DevMac

      “we could soon have a change of government, a return to sanity’

      No such thing as a silver bullet. Change of government is a long-shot. A return to sanity requires years of cultural change. In regards to renewable energy and climate change policy in the short term we’ll likely have to settle for begrudging acceptance by those who hold the balance of power.

      Sanity, wrought from logic, reason, and expertise, in the halls of Parliament? A long-term goal.

      • Hettie

        Parry, Frydenberg, now Hawke, and the possibility of a Senate enquiry to require the whole boiling of them to disclose their parents’ places of birth..
        The likelihood of Government collapse grows daily.
        And since it is only the RWNJS and the coal lobby
        driving the insanity, and even the generating companies have done their sums, know that RE is less costly than FF. Joe and Jenny Public, & now Fred and Freda Business are turning in droves to Solar to free ourselves from outrageous power bills.
        ALP have their hands in the coal mine too, but know we must limit emissions, and the Greens will force the issue.
        So I am optimistic. It won’t happen overnight, but the switch to renewables and storage will happen.
        The Coalition is toast. The progressive majority in a new government will be huge, even without the voter anger at the arrogance of Coalition pollies who didn’t bother to do their homework.

        • JoeR_AUS

          You might not realise that place of birth requires a “birth certificate” and there are lots of people who cannot produce one esp people from war torn Hungary ie just because you migrated or escaped from a country it does not imply legally you were born there!

          So, if they have children how can be dual citizens?

  • Ian

    Acceptance. The fifth and final stage in Kubler-Ross’s stages of loss and grieving.

    Would you believe it: a grid-incumbent accepting roof-top solar. Soon it will be the coalition’s turn to reach this stage. They are still displaying anger which is stage 2 out of denial, anger, depression, bargaining, and acceptance.

    Have fun checking out their progress using this tool from psychology!

    • DevMac

      I’d say the Coalition are pretty close to the depression stage. They can stay there as long as they like, although the bargaining stage may be useful for passing legislation retracting most of the changes from the past few years.

  • Soon all Australian power bills will start declining. 📉 📉 📉

  • Ken Fabian

    I would have thought the place to start avoiding grid costs using solar and storage would be the thin ends of the grid – in rural Australia. Although I suppose Transgrid is not the owner and operator of the long runs of poles and wires that service only a few homes or farms, they are just servicing the supply to those operators. In many cases it is already cheaper to supply those customers with PV, batteries and ongoing maintenance than maintaining the existing infrastructure. The backbone of the grid and it’s cost effectiveness is still connected and affected by these runs of poles and wires – and the cut off point for where solar and batteries is more cost effective than either grid extensions or existing grid connections will keep shifting in favour of the RE options.

    • George Darroch

      They’re doing quite a bit of that, taking remote properties and clusters off-grid with batteries and gens as backup.

      • neroden

        I’ve read about Ergon taking remote properties off-grid, not sure about any other grid operator.

        • Horizon, Western Power, SAPN, Ausnet have all talked about it. Western Power particularly keen.

  • JoeR_AUS

    AUSGRID business model is to pay $250 per KW, wow….

    Nice, except when you produce power and they give you up to 12c an kwh and then on sell it at peak time for 58c or mid cycle rates at 24c within Sydney

    Really its nothing to do with saving the planet as such its about getting real about rates and take a 10% margin not 100-400%

  • Michael Cratt

    Does anyone have a link to the Ausgrid website or know how businesses can apply to be part of this trial? I have done a quick Google search and haven’t come up with info or mention of it?