Network operator says rooftop solar PV shifts peak by several hours

The operator of South Australia’s electricity distribution network says rooftop solar PV played important role in protecting networks in recent heatwave and has shifted the peak of demand by several hours into the early evening.

Spark Infrastructure, which owns SA Power Networks in South Australia, as well as networks in Victoria, says data from the recent heatwaves in January and February made it clear that the proliferation of rooftop solar PV has shifted the peak in demand by a “couple of hours”, from around 5pm to 7pm.

“(Solar PV) helped reduce stress on the network during the heatwave,” Spark said in an analysts presentation on Monday. This, and greater preparation, meant that the network suffered little more than a “few blown fuses” this year despite two separate weeks of 5 consecutive days of 40C plus temperatures (and warm evenings), compared to a signficant “loss of assets” in the last major heatwave in 2009.

Five years ago, South Australia had little rooftop solar PV, but over the course of 2013 it jumped from 366MW of capacity at the start of the year to 548MW, and installations doubled in the second half. Its solar penetration is now an Australian high of 21.2 per cent of dwellings. (See separate story).

The conclusions by SA Power Networks fits in with the observations of private analysts and the Australian Energy Market Operator, which noted earlier this month that solar PV had shifted the peaks quite considerably.

This graph illustrates what has happened, compared to a similar day in 2009. It is similar to the AEMO graph of the same week. As we noted then, not only has it reduce the size of the peak by more than 5 per cent,  and shifted it back by a couple of hours, but the volume and duration of the peak that has been dramatically reduced during the day. It would not take a lot of battery storage to shift and reduce that peak even further.

“The actual peak period moved by a couple of hours,” Rob Stobbe the CEO of SA Power Networks, told analysts on a conference call. “It has gone from 5pm in the afternoon to early evening.”

“(Solar PV) does assist through part of the peak. As we always been saying, solar has some environmental benefits, but we still very reliant on our network.”

Rooftop solar PV is having an impact on the network operator in other ways.

Total consumption from domestic customers fell 5.7 per cent during the year to 3,260GWh, despite an increase in population and a 0.6 per cent increase in households. Consumption from small and large businesses, in comparison, rose.

As this graph on the right shows, consumption has fallen quite significantly from the original forecasts made in its latest regulatory period.

The fall in demand is also being assisted by the improved efficiency of appliances and more rigorous building standards, the operator said.

This is having an impact in other ways. The fall in demand is introducing a lot of risk into the business of network operation.

Spark is looking for a move to a revenue cap from a price cap to remove volatility caused by a change in volumes.

The Australian Energy Regulator has expressed support for such a move, because it could provide the network operator with an incentive to reduce costs, such as choosing demand side management such as storage, rather than building poles and wires, where it is cheaper to do so.

Still, as this graph below shows, Spark and other network operators get a hefty margin (around 66 per cent) on the operation of the networks. That is the difference between the revenue and the cost of  the network. One might imagine what the cost of the network might be if it was run under the “municipal” or even not-for-profit models that are emerging in Europe. As it is, as the AER notes, barriers for entry are high for new competitors.