Rooftop solar may overtake coal by 2040, and save billions

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Rooftop solar on Australian homes and businesses could account for 22 per cent of national demand and overtake the combined output of black and brown coal at that time.

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One Step Off The Grid

The amount of electricity from rooftop solar on Australian homes and businesses could reach 50,000 GWh by 2040, meaning it would account for 22 per cent of national demand and overtake the combined output of black and brown coal at that time.

The Australian Energy Market Operator’s Integrated System Plan that was published on Tuesday put distributed solar, which with battery storage is a key component of  DER (or distributed energy), on track to supply more power to the national grid than coal within little more than 20 years.

According to the ISP, in 2040 rooftop PV generation is projected to reach approximately 31TWh across the NEM in its Neutral (below), Slow change, and Fast change scenarios, and nearly 50TWh in the high DER scenario.

This represents between 13 and 22 per cent of forecast total underlying NEM electricity consumption, the report says, and has the potential to “deliver a major cost saving to consumers.” At the top end, that will be equivalent or exceed the output of brown and black coal by 2040. (See graph above).

And it will reduce costs n a number of ways, AEMO explains. For one, it would reduce the need for utility-scale renewable generation, thus cutting the costs associated with connecting these assets within the transmission system.

Efficiency gains associated with lowering overall system losses are also anticipated, the report says, as energy is generated at the point of consumption.

And perhaps most importantly, there is the impact that distributed solar and storage has on reducing local peak loads, providing network savings at both the transmission and distribution level, that can then be passed on to consumers. This will be as much as $4 billion in savings.

These savings would be greatest, of course, under the ISP’s High DER scenario, which considers a future where distributed rooftop PV generation, battery storage, and other demand-based resources
at the consumer level are higher than in the Neutral case.

Indeed, AEMO says that the purpose of modelling the High DER scenario was to examine how increased distributed solar and storage could impact on – ie. reduce – investment needs for utility-scale generation and storage and transmission. (See chart above.)

(This is an excerpt from a story from our sister publication One Step Off The Grid. To read more, please click on original here).

 

Sophie Vorrath

Sophie is editor of OneStepOffTheGrid.com.au and deputy editor of its sister site, RenewEconomy.com.au. Sophie has been writing about clean energy for more than a decade.

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38 Comments
  1. john 5 months ago

    I think it is inevitable that roof top solar will become endemic in Australia because of the high incidence of solar resources.
    How to manage the high generation of power from all those citizens?
    Well has been seen previously when the bell curve turned into a duck perhaps some citizens will get battery’s to lower the duck especially the evening high energy demand and those storage battery will mitigate that as well.

    • Joe 5 months ago

      Rooftop solar should be made mandatory for all new build homes. Unless shading is an issue what is the excuse for not having solar. In the outer western suburbs where need their A/C to survive the increasingly hotter summers the solar will help meet those peak energy usage events and the punters will ease their hip pocket pain at the same time.

      • Shilo 5 months ago

        Is that like making people have to get a licence to have kids, or make them go to get a licence to get married, or make them wear shoes?, or make them not drink coke, or make them not drink?

        • Joe 5 months ago

          Not sure what your point is or are you being sarcastic.

          • Shilo 5 months ago

            I still think every one should be made to wear shoes in public, not drink coke, get a licence to have kids

          • Ian 5 months ago

            Thanks Shilo, very amusing. When do a housing standards such as Hettie’s examples , which ensure adequate housing quality, become unnecessary burdens on people? Solar is the perfect example of this sort of gray area. Rainwater tanks would be another. I would say building aspect and orientation, window placement, insulation and other passiv Haus design principles should be definitely part of the building code. Roof orientation and suitable space for home batteries to make new housing suitable for solar and storage should be part of the code too. Actually forcing developers to install solar and storage may have negative unintended quality or cost consequences. Others might know better and this aspect of renewables planning would be a very worthwhile debate.

            We have for a couple of generations enjoyed excellent public services like electricity , roads, water etc. Distributed solar, storage, EV charging and distributed water collection may be an essential part of our future existence and a reliable electricity grid may not be possible without distributed solar and storage, EV connectivity. If that’s the case, then our housing standards better reflect the new renewables reality.

          • Shilo 5 months ago

            There are so many things that should be done to improve things. In some states people who put bores in and put pumps down them, have to also put meters on them, and pay for the water.
            So having to put solar on your roof, to a spec and include battery’s, is the same, I just wonder if there will also be a meter put on the house side eventually and home owners charged a little for their own power.
            But thats a way off.
            I suppose I am just a older man that has issues with not having my own choice on my own land and own house.
            Even if its good for me, a bit like stopping smoking or drinking coke and not water. (Not that i smoke, or drink coke)

          • Ian 5 months ago

            You are obviously from the United States which is cool. Don’t you have building codes where you live? How do you ensure that your cities are not overcrowded or that your buildings don’t fall down? Surely you have laws about which side of the road you drive on, or how clean your town water is,. You must have standards regarding the types of additives your companies put in food or the extent of fracking of your landscape? Doesn’t your country protect the environment by preventing unscrupulous companies from lopping off mountaintops to precure coal or destroy pristine country to extract oil from tar Sands?

          • Shilo 5 months ago

            No I am not from the US, however I am from China.
            The next step to solar as I have written about before, is not only will it be a law you must have it, but it will also have to be maintained with inspections carried out by licensed inspectors which the owner will have to pay for and will have to rectify all the inspectors findings.

          • Alastair Leith 5 months ago

            TLDR;?

            I suppose I am just a older man that has issues with not having my own choice on my own land and own house.

            Nuf Said

          • Hettie 5 months ago

            Too long, didn’t read.
            😁

          • Ben 5 months ago

            Shilo, I think your point is valid. There are always unintended consequences of mandates. Here’s a question in the context of this discussion:
            – trees and subsequent shade reduce solar output – what is the priority then? Is a house owner free to choose trees over solar?
            The negative reaction from people to a simple question regarding fundamental freedom of choice is telling.

          • Shilo 5 months ago

            I suppose that question is answered already for the house!!!!!.
            But also needs to be answered for where solar plants go on the ground, Grass, trees, low vegitation or solar pannels?

          • Hettie 5 months ago

            Rainwater tanks are now mandatory in many places, but the required capacity is ridiculously low. 500 litres, to supply toilet and laundry, maybe a little for the garden. Me, I chose to have 3,000 *gallons* I think that’s 13,600 litres.
            Not permitted to have tank water at the kitchen tap, so I fill big jugs from the laundry tap for drinking and cooking, and enjoy the luxury of rainwater showers and the occasional spa bath. Having lived on tank water on a rural property for 12 years, I would never go back to town water. It stinks, and is full of nasties from the catchment area. Ours leaves a pink powder residue when even small quantities evaporate. What is it? I ask myself.
            I pay for it, of course, in the cost of running the pump, but you makes your choices. Town water for the garden, rainwater for me.

          • Shilo 5 months ago

            Yes you are getting around the law, and not sticking to what is for your safety, you are drinking water from a source that could end up making you sick.
            Kind of like solar if its not looked after and maintained.
            (However I am with you 1000%, I drink rainwater, there is no way I will drink the tap water, its better used in the garden)
            ((I also shower, wash, dishwash every thing in rain water, I have a huge amount of water storage I keep adding to every year))

          • Hettie 5 months ago

            Ho ho.
            Here on the edge of a small regional city, where the air is relatively clean, apart from a bit of woodsmoke, I’m not worried. Empty the collection pipes after heavy rain (and remember to close the tap afterwards!), and I have a tank bad that cleans the tank floor every time it overflows, and in 12 years in the other place and 7 years here, I have had no health issues that could be water-related.
            That rule was made when we still had lead in petrol and asbestos in vehicle brake linings. Made sense then. Now, not so much.

          • Shilo 5 months ago

            Our farm is 4th generation and lots of people have drunk from the tanks over the years, all so far have reached very old ages.
            Also almost zero fillings and tooth paste was only used the last 40 years and even then not all the time

          • Joe 5 months ago

            Instead of rambling, state your point.

          • Alastair Leith 5 months ago

            To answer useful sarcasm with information, the urban planning profession in Australia are completely asleep to the need to protect solar access in planning regulations. Currently only existing systems have any legal protection, but the overshadowing of a roof is not ever mentioned in any code I’ve seen. I spoke to a planner/draftie who is writing a paper for uni about the issues. VCAT can’t even understand the concept, it literally does not compute.

        • Hettie 5 months ago

          No, it’s like requiring that new houses have a water supply, and a means of cooking food, and a kitchen, and a bathroom, and a flushing toilet, and a hot water system, a connection to electricity, and rooms of adequate size, and and and just another building regulation.

          • Shilo 5 months ago

            Hmmm lets think about it, some houses have not much sun, some have heaps of sun, and lots are in between.
            The ones that get virtually zero, are you wanting them as well?
            Or is there a lot more details.
            Or simply not matter what ever single new house has to have solar?.

        • john 5 months ago

          NO mate it is simple as in how to be a responsible citizen.

      • john 5 months ago

        Some new build has Solar.

      • phillyc 5 months ago

        As a percentage, I see more solar in new build estates than existing established areas that are nearby.

      • Pedro 5 months ago

        I am very pro solar, but I do not agree that it should be mandatory. When it has been made mandatory in some councils as part of a DA what you end up getting is the bottom of the barrel smallest and lowest quality system.

    • phillyc 5 months ago

      What is the chance that in the next few years network rules will require battery storage to be installed at the time of solar install if a certain size of install is exceeded? I’d say pretty high. Even 5kWh of storage would make a real difference to the evening peak. Could make for an extremely rapid decline of black coal mid morning though as all the batteries are charged up from the solar and then the balance is fed into the network.

      • Ben 5 months ago

        And if that’s the case, then a standard solar system will be back into “very expensive” territory, or subsidies will be back on the table.

    • Ian 5 months ago

      How endemic is endemic? Australia already has a very high incidence of solar on rooftops. If you look at the openNEM widget the solar component is small compared with the rest of the electricity generation so that duck-thing you write about is far off with regards to rooftop solar. I would say that storage should be essential for companies that want to benefit from the LGCs and for the remaining coal generators. Considering that coal cannot dispatch more than about 20% of power rating and considering that the grid needs more flexibility from coal then that, these generators should be required to install storage to maybe 50% of their power rating for 2 or 3 hours a day. ie 1MWh: 1MW peak output

      • Ben 5 months ago

        I’m not sure where the “20% dispatchable” figure originates, but it’s more like 50%, if you mean turn down capability.
        And if you are going to talk about dispatchable, on the NEM that actually means SCHEDULED, and no wind farm is SCHEDULED, they are mostly SEMI-SCHEDULED, which in reality means they can reduce output when asked to, but cannot increase output when asked to.
        The SA battery is SCHEDULED, because it can produce output on demand.

  2. phillyc 5 months ago

    What price do the filthy brown coals bid into the market per MWh? Obviously they must be the cheapest monetarily as they almost never (except breakdowns) change their output as per the NEM graph.

    • Peter F 5 months ago

      Brown coal is the cheapest because the coal is so easy to mine. Also brown coal plants tend to be less flexible than black coal plants so operators will take low prices even if it means short term losses so they can capitalise on higher prices later.
      However filthy is a relative term. They do produce more CO2 per MWh, but usually far less fugitive methane from the mines, less emissions from the mining process and much less heavy metals and SOx from the stack so if we had a damage weighted emissions scheme they may well be cleaner than many of our black coal plants

    • palmz 5 months ago

      One thing to note is gas, in Vic, NSW and SA. Gas is normally the highest bidder so if coal power from Vic can go into any of these markets to replace gas they are likely making good money. TAS will also import power if its cheap

      So unless an inter-connector is constrained to prevent more ‘coal power’ going in they are unlikely to cut back on generation.

      • Hettie 5 months ago

        The problem with that idea, Palmz, is that coal must chug along at the same speed, same output, 24/7.
        Gas, on the other hand, can come up to full production from cold in a matter of minutes. And it’s mostly coal that falls over without warning on stinking hot afternoons when demand is at its peak.
        A great deal of gas capacity lies idle most of the year, only to spring into action when it can bid the price up to the $14,000 cap, as in SA on Monday.
        Rooftop solar is flattening the peaks, making them occur later, and big uptake of even smallish batteries may just about eliminate them. Which is why the fossil fools loathe renewables. RE buggers their business model.
        Simple, really.
        But they’ve had their turn, and incumbency does not give them the right to kill the planet.

        • palmz 5 months ago

          I never said it was a good thing. I was mainly trying to explain why I think brown coal does not ramp down very much day to day at the moment.

          As far as i know all of our coal fleet can decrease production as needed but if Peter F below is right brown coal has not real reason too (I don’t think any one exports brown coal anywhere)

          But black coal is exported so if it can be put on a ship and sold for more that is what they are going to do.

          • Mike Westerman 5 months ago

            One of my takeaways from the ISP is Audrey Zibelman’s concerns about premature failure of the coal fleet. Brown coal has a fairly high minimum operating load, and is inflexible in load, likewise the supercrit plants like Kogan Ck. That means CCGT and black coal like Gladstone will be force into this role until we have sufficient PHES, and the latter may start hitting their fatigue limits. Even tho’ aeroderivative OCGTs can start quickly, the also have limited life with multiple cold start cycles.

            PHES in SA will be able to bring prices down while presenting low risk flexible support. But in Vic and NSW sufficient PHES may not be commissioned in time unless the government directs the AEMC to change the rules to pull it thru urgently. It’s where the Feds pushing Snowy 2 complicates the situation by having a large non-market intervention that lacks revenue transparency, and hence scares off other investors.

  3. Ian 5 months ago

    Love the long range forecasting , especially when the electricity sector is changing so rapidly. It’s like driving in a fog. Given free rein and active support, renewables storage and electrification of ground transport could happen within years not decades. These 20-30 year scenarios indicate the current governmental opposition to renewables in all its forms.

    • Alastair Leith 5 months ago

      AEMO are always conservative on projections, part of their job, but also reflects ownership structure. They projected growth for every year that demand was declining from 2012 onwards.

  4. Rob Campbell 5 months ago

    Sophie,
    Experience would tell us all that picking dates in this ever changing world is risky. I can guarantee that you will never be accused of overstating. Electric cars are going to become half the price of petrol ones, without any subsidy. They will drive a huge surge in PV on any surface and they will provide the sinks and supply that will make hub and spoke networks redundant and fossil fuels obsolete, and by 2025 we will be well on the way. I sit with 7 counties 5 times a year, we are behind at the moment they are 3 steps ahead. They will jump over big batteries instead using the car fleet. Why buy two batteries?

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