Grid operator prepares for rapid uptake of solar and storage

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Australia’s grid operator is modelling transmission network needs to cope with a scenario where virtually every home has rooftop solar, nearly half have battery storage, and one in five households has an electric vehicle. It’s bad news for coal and peaking gas plants.

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The Australian Energy Market Operator, which runs the country’s grid, has adapted its network planning to take into account a rapid uptake of rooftop solar, battery storage and electric vehicles in the coming years.

Regulators and grid operators in Australia and overseas have often been accused of playing down or ignoring the likely uptake of “disruptive technologies” such as rooftop solar, battery storage and EVs.

But in its latest planning for the transmission network, AEMO looks at one scenario where 33.3GW of rooftop solar is installed on homes and businesses by 2034-35, 40 per cent of all homes have residential battery storage (19.1GWh) and 20 per cent of homes have an electric vehicle – equivalent to 2 million EVs by 2035.

That compares to around 4.4GW of rooftop solar now, a negligible amount of battery storage and barely 1,000 EVs.

aemo additions

It’s not so long ago that grid operators would say that 10 per cent renewable energy penetration would be more than the grid could absorb. But those fears have already been proven false – South Australia is already at 40 per cent wind and solar, and work at micro-grids such as King Island and Alice Springs has shown high penetration can be integrated.

However, to avoid being caught out – as many utilities, regulators and planners were by the first five years of the rooftop solar “revolution” – AEMO is now planning for scenarios that include rooftop solar meeting all daytime demand in states such as South Australia and Western Australia.

The 2015 National Transmission Network Development Plan – released today – looks at some of the issues that arise from a “gradual evolution” of distributed generation, and the “rapid transformation” described above.

AEMO says that this transformation has challenges. But they are not insurmountable; they require planning, and they will require system changes, particularly on ensuring that the grid maintains the “frequency” and other ancillary services needed for stable supply. But this does not mean fossil fuel generators spinning in the background.

Indeed, in South Australia, the amount of rooftop solar, wind energy and large-scale solar PV could provide more than 100 per cent of the state’s electricity demand, within one or two decades.

There are another couple of significant points made about the “rapid transformation” scenario.

One is that the prevalence of battery storage in homes and businesses means that the anticipated addition of “peaking” gas-fired stations to balance the “intermittency” of wind and solar is no longer needed. Battery storage does the job.

The second is the large loss of coal-fired generation in this scenario — the higher uptake of rooftop solar and battery storage means an extra 5,000MW of coal generation is retired – for a total of 8,000MW.

That appears to support the idea that every panel and battery cell installed in a home equates to reduced coal capacity and output.

As AEMO notes: when you get more domestic solar, that reduces overall consumption and “drives down the utilisation of these (coal) power plants to a point where it is no longer cost-effective to operate.” Go people power!

Here’s another conclusion, and a bit of a blow to all those fossil fuel and nuclear die-hards who continue to talk up the supposed massive cost of grid upgrades needed to accommodate high penetration of renewables: It’s not going to cost anywhere near the amount previously thought.

Like the old 10-per-cent-renewables-is-too-much-for-the-grid thinking of the past, AEMO has rapidly downgraded network upgrade estimates, even in the “rapid transformation” scenario.

aemo network costs

“Minimal new transmission network infrastructure is required to transport power to consumers, provided new generation is located efficiently to balance the quality and availability of the fuel source, and network costs.”

There are some areas where “congestion” could occur, such as in Sydney and other areas that might get high renewable energy build. But as discussed recently, the city congestion is likely to be an opportunity for “micro-grids” to be established that could defray, and even reduce, those costs.

AEMO boss Matt Zema says the role of interconnected transmission networks will continue to evolve due to the growth of renewables.

“Historically it was viewed largely as a transporter of bulk electricity supply from generation to distribution,” he said. “however in an energy future with a greater mix of renewable generation, the transmission system will provide critical network support services to maintain power system security and reliability.

“Transmission networks are now required to transfer generation from both ends of the supply chain due to rooftop PV, which is expected to make up the largest form of electricity generation across the NEM. This adds weight to the need for investment in support services to manage power system security and reliability.”

But neither of the two scenarios considered by AEMO in this analysis include solar thermal with storage, or even utility grade storage, of the like being considered by a consortium involving AGL, and installed by Ergon Energy, which says it is reducing costs by around a third.

These will likely be included in future scenario planning as the technologies become more widespread.

The two core scenarios entertained by AEMO are the gradual evolution and the rapid transformation scenarios:

In the gradual evolution scenario, rooftop PV grows to 17.6GW by 2034/35 and battery storage to 8GWh. Large-scale wind doubles to 3.5GW, large-scale solar PV increases more than 20-fold to 3.3GW, gas adds 2.1GW and 3.12GW of coal is retired, all by 2022/23, with no change for another decade or more.

In the rapid transformation scenario, where rooftop PV gets to 33GW and residential battery storage to 11.2 GW. There is more large-scale wind (4GW), and about 2GW of large-scale solar. And there is 8,000MW of coal retirements.

The adoption rate of rooftop solar is based on current tariff regimes, although it is clear that moves to lift fixed network tariffs, or to introduce demand tariffs, could severely curtail the adoption of rooftop solar.

AEMO has the transformation looking like this: rooftop solar quickly provides the largest generation capacity in the NEM (which incidentally does not include Western Australia, the Northern Territory and remote areas such as Mt Isa).

aemo rapid transformation

This table below shows how some of the changes may be reflected, state by state.

aemo rapid state by state

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14 Comments
  1. maw56disqus 4 years ago

    you say: “That compares to around 4.4MW of rooftop solar now”
    You mean 4.4GW, please get the numbers right 🙂

  2. Chris Drongers 4 years ago

    Withdrawing 5GW of black coal generation as PV/wind increases implies some major power station and minesite remediation work costing big dollars. Could the miners and burners be successful in claiming state compensation to cover these costs on the grounds that the state encouraged or required the construction of these facilities under capacity or power standards contracts? Have these arguments been tested anywhere?

    • Evan A 4 years ago

      There is also the polluters bill of rights (TPP) to contend with.

  3. Stefan Jarnason 4 years ago

    20% households with EV by 2035? Yet again they are ridiculous off target. If EVs continue on their current path, it will be 80% by 2030

    • Jacob 4 years ago

      Battery density is improving by 5-10% per year.

      Some are saying solid state lithium batteries can be made cheaply by 2020. Of course solid state lithium batteries can be made today, but the process is very time consuming, ie, 6 months for 1 battery.

      So when boffins outside AUS work out how to make solid state lithium batteries quickly, it would be a huge boon for EVs.

    • George Takacs 4 years ago

      Stefan, I suspect at least 80% of households which own cars will have an EV, but it may well be that many households by then do not own cars, relying instead on autonomous vehicles belonging to 3rd parties.

  4. Jacob 4 years ago

    Why would Vic get an increase in LNG fired generation when there will be a colossal increase in storage.

    • JeffJL 4 years ago

      The LNG is to target short lived shortages in supply (peaking plants). Something coal power plants cannot.

      • Jacob 4 years ago

        So how come other states will have a net decline in LNG powered generation.

        • JeffJL 4 years ago

          I’m guessing that they will be the ones to have to close down their highly polluting brown coal generators.

          • Jacob 4 years ago

            Maybe the other states will import electrons from Vic.

  5. Andrew Woodroffe 4 years ago

    No doubt right on the edge of AEMO’s comfort zone, but I would also suggest it is still way too conservative. WA’s contribution? Right now we have just over 1000MW of excessive generation capacity on the WA grid. By strange coincidence, our old coal power station at Muja; A,B,C and D add to 1000 MW, so we could close down Muja today and we will still have plenty of generation capacity for this coming summer’s peaks. Today. Not 2022, 7 years hence. More gas would be burnt in it’s place but our RET obligations, abut 450MW of wind plant, if built in WA, would reduce this once spinning. Also, we still have some 80MW/year of rooftop PV going in.

    And a carbon tax? We know it works. We know GST on current electricity retail prices is already bigger than the carbon tax ever was . . .

  6. JohnOz 4 years ago

    Of course if the grid owners want to protect their over investment it is they who should be getting in ahead of renewable energy owning individuals and installing bulk electricity storage (no doubt cheaper than small individual storage). This would then allow them to better smooth out the difference between supply and demand. particularly the high household production during the day and low demand and high business demand during the day.

    If they don’t invest in storage the grid will become increasingly irrelevant and the investment will have to be written down in their accounts.

  7. Brenton Harris 4 years ago

    RedFlow Ltd have a new market ready product using Zinc Bromide in competition to lithium solution and it appears this is a lot cheaper than comparable battery storage products in the market. Could be a game changer?

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