West Australia flags end of centralised energy network

What will the death of centralised energy networks look like? Turns out, what’s going on in Western Australia right now paints a pretty good picture.

As the head of asset management at WA network operator Western Power explained at last month’s Local Energy and Microgrids conference in Sydney, co-hosted by RenewEconomy, when you have a service area equal in size to the entire United Kingdom, but with just one million customers (as opposed to 73 million), it’s a big challenge – economically and logistically.

“When I refer to edge of grid, I’m talking about edge of the edge of the grid,” Seàn McGoldrick told the conference on Thursday. “And there’s a lot of it. Customer density is so low, it’s practically impossible to make a cent.”

And its conditions like these that call for the sort of “non network” solutions depicted in the image below, from a slide used in McGoldrick’s presentation.

The slide presents four different options for the future of the main WA grid: from business as usual; to the disconnection of fringe of grid communities; the creation of a modular network of made up of a variety of renewable energy-based inter-connected grids and microgrids; or even a fully decentralised network.

A McGoldrick noted, concepts like these are not always an easy for network types to wrap their minds around.

“A fully decentralised future goes against my very marrow,” he confessed. “When I entered the business, we were still busy connecting everything.”

And it is, perhaps, a particularly difficult notion in Western Australia, where – as McGoldrick puts it, “as a broad community we’ve invested billions in developing the …grid, and we don’t want to abandon that.”

That’s why he favours the idea of a modular grid, number three in that graph above. But even that represents a wholesale change in the thinking of the network industry. Some towns will be cut off completely, and operate their own renewables-based mini-grids; others will have “thin connections” as a back-up; for others not much will change.

Of course, Western Power is not the only network to think that the future will be different from the past – networks in South Australia and Queensland have also toyed with the idea of micro-grids, and still are – but this is the first time we have seen a blueprint of what that new network might look like.

This is a complete rethink on the old centralised model, and is driven as much as it is by the arrival of cheap renewable power and the emergence of battery storage, as it is by the huge costs of maintaining hundreds of kilometres of power lines, and the threats of storm and bushfires to those connections.

As McGoldrick says, and this is illustrated in the graph below, the WA network makes little money. Only those areas in green generate a return on investment. The WA government currently subsidises electricity consumers by more than $500 million, or more than $500 per household.

That level is unsustainable, and is one reason why energy minister Mike Nahan is implementing the most radical reform agenda in Australia, and one of the most radical in the world. He has embraced solar and storage, and ordered the shut-down of excess capacity, a move likely to see the closure of a significant slice of coal capacity.

“We believe that the future will see a modular version of the current grid, where we will still have those strongly meshed areas, other areas of thin-pipe connection, and micro-grids, both inside the mesh network and on the fringe,”  McGoldrick said.

Western Power is now involved in seven different projects that will test some of those theories. Three of them are micro-grid projects, one is an edge of grid project, one is an island (literally), and another is in the heart of the metropolitan area. They include battery storage, virtual power plants and demand-side management projects.

Western Power is currently testing out a number of new approaches, at various different points of its network, including at Ravensthorpe and Esperance.

One of these is Kalbarri – which as McGoldrick describes it is “a tourist town of around 3000 souls” at the very north-western edge of the grid – where the company is currently testing a microgrid solution using wind, solar and battery storage to address problems with reliability of supply.

“Frankly,” he told the conference, “it’s a nightmare from a utility perspective: remote, trips out all the time… prone to bush fire…

“It is very poor when we can’t meet the needs of the customers up there, particularly during the tourist season.

“We’re very excited for the potential of a microgrid up there.”

But there a lot of questions the network needs to answer first, said McGoldrick: How do we operate the mini-grid? What tariff regime do we employ? Do the national regulations inhibit newtorks from taking charge of things like this? What are the regulatory implications? Is it commercially feasible? Does Western Power have the capacity and capability to do this?

But, as the “appalling, absolutely appalling” outage data shows (see table below), “we’re getting those outages when the sun is shining. So it (the micro grid proposal) is going to work.”