SA distributor predicts huge household solar, storage uptake

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SA Power Networks predicts consumer-driven energy revolution will see more than half all SA houses with rooftop solar and 30% with energy storage by 2025. By 2040, those numbers increase dramatically and only a few will depend entirely on the grid.

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South Australia’s network operator has become the latest in Australia to predict a dramatic uptake of distributed energy resources, charting an upwards trajectory that would see almost all households in the state with rooftop solar by 2040 and more than half with energy storage.

In a stunning graph (below) published as part of an investor report released on Monday, SA Power Networks predicted that, by the mid-2020s, more than 50 per cent of all households in the state would have rooftop solar – up from 1 in 4 today – and more than 30 per cent would have energy storage.

By the mid 2030s, SAPN predicts the number of households with energy storage systems will have surged to more than 50 per cent, while the number of households with solar will be up around 70 per cent.

Electric vehicle uptake is also predicted to rise sharply from 2020 onwards, with more than 10 per cent of SA households projected to have an EV in the mix by 2035. It also suggests that a sizeable chunk of its customers will disconnect from the grid completely – in contrast to the view of some retailers – and only a minority will relay on the grid entirely. (see second graph below).

Screen Shot 2014-12-10 at 11.32.35 AM

South Australia is already a world leader in wind and solar energy, with the state sourcing 40 per cent of its generation from those “variable sources”, a development that has forced the mothballing of the biggest coal plant in the state, and now part of the biggest gas plant.

The dramatic forecast from South Australia’s sole electricity distributor follows on from predictions by the WA grid operator that three quarters of households and a majority of businesses could have solar within a decade. Even WA energy minister Mike Nahan, said last week he had instructed the state-owned utility Horizon Power to investigate renewables based micro-grids as a means of providing cheaper and more reliable power to regional areas.

Nahan – who as a former head of the Institute of Public Affairs has been a fierce critic of renewables, and as energy minister once intimated he did not want new large scale renewable investments in the state – said he had asked Horizon Power to “beef up” its capacity in building micro-grids.

He said it was clear that having an elongated grid – with huge distances of poles and wires – or relying on diesel power was too expensive and unreliable.

Similarly, SAPN points to a “long and radial” network structure in regional areas; an average age of network assets of 38 years and situation where 70% of assets supply 30% of customers outside the Adelaide Metropolitan area.

“The energy landscape is changing,” says the Spark Infrastructure report. “Consumers, energy companies and investors must have confidence that energy market frameworks will evolve appropriately.”

On the investor front, SAPN’s eyes-wide-open approach to what it describes as a “consumer driven” energy market transformation has impressed Deutsche Bank.

“We favour companies that take a proactive approach to change as being better placed to leverage opportunities, and avoid major threats,” a Deutsche research note on Spark Infrastructure Group – the ASX-listed company that has a 49 per cent shareholding in SAPN – said on Tuesday.

Source: Spark Infrastructure
Source: Spark Infrastructure

In reference to SAPN’s bullish forecasts for rooftop solar and energy storage, Deutsche notes that while it is too early to predict investment impacts of such disruptive technologies, “it is clear (they) will ultimately change the way electricity is generated, transported, distribution and sold in Australia.”

In particular, says Deutsche, battery storage is a major emerging theme.

“While the economics are not yet supportive of wholesale take-up, costs are falling.  …The impact of batteries on electricity grids is difficult to predict. (They) could result in a significant number of households going “offgrid”. Alternatively, reliability concerns could see batteries used in a more centralized fashion, increasing the need for micro-grids.”

The Deutsche report also notes SAPN’s EV projections, and agrees that they stand to be another potential beneficiary of improved battery technology, and “could represent a material new source of electricity – and hence grid – demand.”

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9 Comments
  1. Beat Odermatt 4 years ago

    The uptake may be even faster. Simply Energy decided to punish people for having solar panels on the roof by imposing a massive 33% increase in supply charges from 83.358 cents per day to 110.781 cents per day. Such disgusting behavior by electricity companies will ensure that “going off the grid” is going to happen faster. I still fail to understand why the Government of South Australia permits such “rip-off” charges.

  2. Petra Liverani 4 years ago

    “… with more than 10 per cent of SA households projected to have an EV in the mix by 2035.” If we don’t have virtually 100% EVs by 2035 I’ll eat my hat.

    • onesecond 4 years ago

      I hope you are right and I think it could happen.

  3. A Wall 4 years ago

    Petra, It’s possible that by 2035 both of those could be true. It could be that almost 100% of vehicles are EVs, and about 10% of households have an EV — if about 10% of households have a large vehicle.

    On another subject, I’d like to see more consideration of electric bicycles in these discussions. An electric bicycle is also an EV!

    • Peter Green 4 years ago

      I like to remind my friends that I go to work in an electric vehicle everyday – the humble and much maligned Railcorp train service.

  4. Steven Zilm 4 years ago

    Interesting that SAPN have predicted such a high concentration of storage…. The major problem we have here is SA is that once you connect stored energy to the grid your FIT goes to ZERO. A SAPN spokesman when quizzed at a recent Clean Energy Council mixer stated “the reason for the ruling, that there will be no FIT if you have stored energy is a State Government regulation” ….Sounded like bullshit to me!

  5. Matt Kelly 4 years ago

    This adoption curve is going to be much steeper. Having spent the last three years tracking the industry from an i-bank it comes down to the tipping point – where the customer finds the solution affordable. The product also needs to keep the utilities happy so the units need fleet control and the ability to dynamically respond to the network. Only three companies worldwide have a product that can do this at the household level and are actually selling units w success; Sunverge and S&C in the US and ZEN in Australia. Solar City is not far off considering Musk is on the case. The next challenge is how to incentivize the household when the utilities need that morsel of electricity injected as the mercury hits 100F. Interesting to see Spark’s next move.

  6. Geoff Bragg - SEIA 4 years ago

    I’m also looking forward to eating my hat….
    The chess game moves on…
    If the networks bring in capacity charging – ie kVA demand charges onto residential connections, as the ENA was talking in recent days, then the installation of small battery storage, with grid imports ‘choked’ to 1 or 2 kVA , will take off, within about 18 months of that decision. It seems to take about 12 to 18 months to get the message through to consumers when a change in RET policy / FiT / economic sales proposition occurs.
    I suspect the management at Selectronic are watching this very closely, as the SP-Pro is perfectly positioned for this space – easily configured to limit kVA from the grid to a preset maximum, and later transition to totally off-grid if conditions permit.

    If the networks next move is to raise the proportion of fixed charges, with capacity charging, and low energy rates, then the consumer’s next move will be to move off-grid altogether. The consumer desire to go off-grid is here now – I receive enquiries regularly, people just need to be economically cornered into making that decision (the emotional decision is already made), and the networks look like they’re falling into that trap as we speak…

    Interesting times.

    • nakedChimp 4 years ago

      The SP-PRO is just a charger/inverter for the batteries (can’t take solar directly) and way to expensive for a smallish ESS in the range of 3-4 kWh.
      Unless Selectronics isn’t upping the ante and bringing out a cheaper system, at best a hybrid inverter they will loose out on that one as the Asian competition is way more economical – even if Australian distributors charge a 200% markup 😉

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