For a significant part of his career, as head of EnergyAustralia, Richard McIndoe’s primary role was to protect his company’s major asset – the Yallourn brown coal generator – against the threat of early closure. It made him a fierce critic of the proposed carbon price and other policies.
Now, in a new role that embraces disruption rather than resisting it, McIndoe is promoting technology that could help Australia to safely close, not just the Hazelwood generator, but the Yallourn coal-fired generator he fought so hard to defend.
Like other coal industry veterans such as Hazelwood’s former boss Tony Concannon (now at Reach Solar) and EA’s Adrian Merrick (founder of Energy Locals), McIndoe has leaped the fence from dirty brown to shiny green (although it should be noted he is a former chair of the Clean Energy Council).
But rather than go to fashionable technologies like solar and battery storage, McIndoe has chosen to focus on ideas that have been around for some time but not fully exploited – voltage regulation and power factor correction technologies.
If these technologies don’t sound very sexy, it’s because they are not. But McIndoe says the software developed by Neal Stewart, his partner in his new venture, Edge Electrons, can make the grid significantly more efficient, more easy to manage in peak demand, and deliver major savings to consumers.
What’s more, it can make the grid less reliant on the very brown coal generators that he was once sworn to protect. “If you had these devices on 25 per cent of Australian homes, you could close down Yallourn,” he says.
Given the right incentives, his company’s eSaver e-SolarIQ products – which keep voltage steady at around 220v to ensure the efficient use of appliances – could cut household electricity use by up to 12 per cent, and deliver paybacks within a few years.
“Given the right carbon price and energy efficiency incentives, paybacks could be a year or less,” he says.
The power factor control product could deliver even more significant savings for business, particularly those being hit by new demand charges. The product is designed to improve the efficiency of certain equipment – motors, pumps, fans, machinery – and therefore reduce the power drawn from the grid.
And, McIndoe estimates, the technologies could clip 5 per cent of the system peaks – a resource the market operator might welcome during the summer heatwaves to keep the lights on, and reduce the need to turn to expensive peaking gas and diesel generators.
McIndoe was first introduced to the technology while at EA, and admits to being surprised by what this and other technologies such as solar and storage can do.
“Technology has moved faster than I thought, and the transition is going to be a lot shorter than I thought it was going to be. I don’t think any of the incumbents have come to terms with how rapidly technology will change this industry.”
The problem facing the likes of McIndoe is the resistance of the incumbents to change, although it should be said that promoting energy efficiency and demand management ideas appear to have a strong ally in the new head of the Australian Energy Market Operator, Audrey Zibelman.
“I genuinely think we are seeing a battle where the major gentailers are desperately defending the hegemony of their position and control of the system,” McIndoe says.
“Their biggest fear is a loss of control to the party which controls the point of load, hence their strategy of taking control of metering away from the DSO (distribution networks).
“For their part the DSOs are looking at the problem from the perspective of greater visibility in order to drive/justify wide scale additional investment rather than adopting technologies which will reduce demand and thereby result in a more targeted but ultimately lower cost solution.”
So just how does his technology work?
The first products available to households are the Edge SolarIQ for houses with solar or storage and the eSaver for smaller, non-solar households. The devices regulate voltage at the household level and ensure that the appliances operate at 220v.
That doesn’t usually happen. As this graph above illustrates (and the other at the top), networks are tipping power into the grid at 253v in some locations to make sure that everyone gets the minimum amount that is regulated, 216v.
The impact of higher voltage is more wear and tear on appliances and inefficient use of electricity. Voltages are also rising because of the impact of solar PV, which is causing reverse power flows in some instances and driving network voltages up in a matter not foreseen when they were designed.
McIndoe estimates that the device – which comes in a small box similar to an inverter, or small meter – can reduce kWh consumption in households by 9-12 per cent per annum.
It can increase the solar returns by a further 6-9 per cent because, by reducing voltage in the house you use less electricity domestically, so there is more solar energy to export to the grid. McIndoe points out that this will be particularly attractive to customers with ongoing high feed-in tariff.
As well, it can provide flexibility. If the device is set at a constant 230 volts, it will still deliver an 8 per cent saving, but then have the flexibility to lower voltage again to a regulatory minimum of 216 volts to reduce demand if there is an interruption in supply. It’s another tool for networks and grid operators.
“So rather than always relying on expensive standby gas generation, you have another ‘tool in the box’ to address the interruption from intermittent supply,” he says.
“It’s also a much more targeted and precise solution than looking at the grid as a whole. That means that you can target individual areas where there’s a lot of solar or wind.”
The company’s other major product is the power factor control device known as the Edge PowerSave. Essentially this makes consumption more efficient, reduces network capacity used by up to 25 per cent, and delivers significant savings to businesses, particularly those on demand charges.
He says they are particularly suited for small to medium-sized businesses – about 400,000 of them are on kV limits or pricing, such as golf clubs, farms, hotels, and petrol stations, and the number is growing.
Edge Electrons is looking to hook up with a number of key strategic partners such as home builders, smart meter and energy efficient lighting providers, the solar and storage industry, energy brokers and wholesalers, and facilities management companies.
Edge has already partnered with Rexel on the wholesale distribution side of the PowerSave product as well as a number of national facilities management and energy brokers such as Energy Action and Bid Energy.
McIndoe hopes to announce a broader national partnership with a major energy retailer over the next few months.
The company has completed 6 months of market trials in Queensland for the eSaver and SolarIQ products and these will now be launched on a national scale at the end of August, initially through two major solar companies but also through a network of national accredited solar installers, and possibly one major retailer.
McIndoe says, however, that the industry view in Australia is completely different to that in Europe, which he has recently visited.
“In Europe there are real, hard targets for energy efficiency, it is a real government policy with teeth. The contrast with Australia, where we have disparate and inconsistent state-based efficiency schemes – which end up being too small and therefore subject to manipulation and volatility – is stark.”
“I don’t think the network companies in Australia are truly across the technologies being developed for edge of grid management. There are a few pilots, but absent a real government push they will just wither on the vine.”
That presents a problem as the grid heads towards its inevitable transition from one driven uniquely by supply to one focused as much on demand management. “It’s very difficult to flip everything on its head unless you have enabling technologies.”
And, he adds, almost ruefully: “It’s just a shame we don’t have a carbon price.” He sees the irony of his comment. A veritable volte-face, as the French might say.
“We argued that the generators needed time to make the transition. Unfortunately those generators have just used that time to shore up their position and raise prices further. They certainly do not need protection from a carbon price anymore.”