Who should control household rooftop solar and batteries? | RenewEconomy

Who should control household rooftop solar and batteries?

AEMO and networks lobby release paper arguing for “orchestration” of rooftop solar and battery storage as Australia leads the world on distributed generation. But who gets to hold the baton?

Global rates of electricity market decentralisation

Australia has one of the highest rates of rooftop solar uptake in the world, and with the addition of battery storage, and yet more rooftop solar, it is going to be leading the world – by some distance – in the ratio of decentralised energy.

According to the Australian Energy Market Operator, some 45 per cent of the country’s electricity supply could come from decentralised energy (DER), and that level could be reached within just 15 years as more homes and businesses install solar and batteries, and demand management becomes widespread. (See graph above).

AEMO is comfortable with, and even encouraging of, these levels of distributed energy, and says they could help save on network upgrades and reduce the need for expensive peaking plants.

But to take advantage of these opportunities, AEMO and network operators argue that these resources need to be visible, and they need to be orchestrated, or controlled. The question is, who gets to do this?

To canvass these options, AEMO and Energy Networks Australia have released the Open Energy Networks Consultation Paper, and as we foreshadowed last week, it considers three different conductors of this orchestra of solar, storage and demand management: AEMO, the networks, or a third party.

More on that below.

First, however, it’s important and pleasing to note that this paper does not include the hyperbole about “blackouts” that marred discussion about this issue at last week’s ENA conference.

Our summary of those claims – What’s behind scare campaign on rooftop solar blackout threat – inspired more direct feedback to RE than any other story we have written since we launched this website in 2012.

Clearly, this is an important issue – not least for what’s at stake for consumers and the solar, storage, and smart software sectors, but also for the differing views about what’s possible within a smart grid.

And they don’t want to see discussions or outcomes derailed by scare campaigns, particularly when it comes to the issue of equity about control and ownership of distributed assets, which usually belong to the consumer.

The paper recognises that this transition is unstoppable, with the uptake of rooftop solar expected to surge from current levels of 7GW to more than 20GW by 2035 (at current rates it will be a lot quicker than that, given high energy prices and the general customer dissatisfaction with energy utilities.).

AEMO says it does not seek to stop it, but it insists it must be managed. Right now there is not enough clarity on what is where, and what it is doing, and when and why.

Without proper management, the paper warns, customers will suffer because the output of household PV will be constrained, restrictions will be imposed on where rooftop solar can be installed, and network costs will rise. Some might say that already occurs.

It notes that in states like South Australia, with extremely high levels of rooftop solar generation, and where rooftop solar production could match grid demand on some days by 2025, un-managed rollout could result in widespread constraints by 2021, and other more dramatic interventions in following years.

But this is without demand management and battery storage and VPPs, which should happen anyway.

The paper notes that if rooftop PV systems transitioned from being “passive” to “active”, this would help address the challenges, and what it calls “feed-in” management (which, I think, means curtailment) would occur less than 1 per cent of the time in 2025, and less than 4 per cent in 2035.

It further notes that blanket restrictions are highly inefficient because passive DER tends to only cause issues for “relatively small periods of time” in the network or system, and will typically be limited to mild Spring weekdays, and only in certain parts of the network.

With proper orchestration, the paper argues, citing a study by the ENA and CSIRO, the savings could total $158 billion by 2027, or half the value of network investments by 2050, and deliver savings of more than $400 a year.

It splits the distributed technology into two categories: active, which relates to rooftop solar systems; and passive, which relates to batteries and other smart technologies.

Both have issues, including batteries, because they are less predictable. AEMO sees this as an issue with virtual power plants, some of which could present a potential demand swing of 500MW in the case of the proposed Tesla VPP in South Australia. AEMO wants to get visibility – and some control – of what such VPPs will do and when.

Without it, the paper warns, customers will suffer. With proper orchestration, the paper argues, citing a study by the ENA and CSIRO, the savings could total $158 billion by 2050, or half the value of network investments.

“DER can provide demand shifting, load and resource balancing and become an integral part of a reliable, lower cost, secure system,” the paper says.

“Incorporated into AEMOs current optimisation process, VPPs will reduce the need for peaking plant and enhance system level resiliency.”

One of the big issues is whether aggregators of these resources have direct access to the wholesale market alongside existing generation resources.

These might be made through aggregators, retailers, virtual power generation platforms and in sub-markets that include peer-to-peer trading that utilise block chain technologies. Already, you can sense the tension here between network operators and the traditional gen-tailers.

The question is the platform, and who gets to be the “Distributed System Operator”, or DSO. (If you ever need someone to host an acronym party, just ring up a network or energy regulator).

The paper suggests three possibilities.

The first is a single integrated platform (SIP), managed by AEMO. It says this would be able to “simultaneously solve local security constraints and support wholesale market entry.”

The second option is a “layered” platform, run by local networks, that links with an AEMO platform. Called the “Two Step Tiered Regulated Platforms,” this would allow bespoke approaches by individual networks, but may end up being complex.

The third approach is an “independent DSO”, as proposed in the US, but the paper does not seem keen on this because of the potential complexity and cost of setting up yet another energy institution.

The organisations are looking for responses by early August, which will then lead to a “white paper”.  AEMO is preparing for a response as strong and diverse as the 80-something submissions to its Integrated System Plan.

The response should be fascinating. Not just from networks, retailers and players in solar, storage and smart software industry, but also consumer representatives.

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  1. Chris Schneider 2 years ago

    IMHO I think every solar and Battery systems should be connected to a more intelligent grid, so should EVs. This would allow the grid to adapt much better than it currently does. Imagine a system where EVs charge off oversupply rather than using curtailment. Batteries are used to push power during the evening peak but are managed so that it limits the peaks rather than all stopping at the same time and causing major issues. Any feed in should be live metered. but I think the NBN can play a role in insuring all networks are smart and AEMO knows what is happening all of the time. Imagine a micro network where it is better to have a house consume solar from another house into it’s battery for later use than attempting to push it back into the core grid (which it doesn’t do) Currently penetration allows networks to consume this extra power and smarter transformers are allowing better balancing but when the total consumption of a micro grid (behind the transformer) is less than the supply It is my understanding that supply is lost, this will increase as penetration grows. Batteries are the saviour of that. so are EVs.

  2. Ray Miller 2 years ago

    What is missing from the “Reliability” issue is “Resilience” and what I mean by resilience is not the NEM, but the many “people” who increasing require Resilience of services despite either natural disaster or failure of any infrastructure. Long-term resilience also by definition means carbon emissions will need to be zero and even start to be sequestered.

    The way we organise the NEM needs to have front and centre a high level of individual customer resilience, any solution which fails to achieve this outcome is a fail.

    We urgently need a model which achieves a high level of resilience over a wide geographic area and uses the NEM as a basic way of increasing the local resilience. We have started now on the road from a centralised model to a Distributed one, but included in the model must be both technology and management solutions which all improve the local individual resilience. The solutions also must extend beyond just the direct energy sector and include the built environment and our changing climate.

  3. Askgerbil Now 2 years ago

    Electric vehicles can increase the take-up of solar PV systems even more than is already projected. The UK is ahead on controlling VPPs that incorporate electric vehicles for both electricity supply and consumption. Owners of electric vehicle are offered free electricity for their participation.

  4. Askgerbil Now 2 years ago

    Meanwhile, in the UK “Electric car owners will be paid for letting an energy company use their vehicle’s battery in a pioneering scheme to increase take-up of the cleaner vehicles and help power grids manage the growth in green energy.”

  5. Robert Westinghouse 2 years ago

    If the government regulate this like they have regulated everything else – give it to private enterprise – the we are DOOMED. If we do not stand up and so NO, all our efforts in spending our personal money on PV etc will be siphoned off into the hands of the foreign owned power companies….DSO is dangerous… What is wrong with the government running it as a NOT for Profit…??

    • David Klemitz 2 years ago

      NBN, water,…

      • Robert Westinghouse 2 years ago

        Good Points. But with the gov. at least when the charge too much the money does not go offshore and there is a slim chance of some of it coming back. With Private Coys, they take the money and run

  6. John Gardner 2 years ago

    Giles, there seems to be some confusion with para’s eight and eleven after the second graph, with repetition of some data albeit with differing time periods.

  7. MacNordic 2 years ago

    Is it just me or is Australia a world leader of making things complicated in the electricity sector?
    There are a few things that at least push out the problem to the future or even eliminate it completely, such as:

    Restrictions (bad, ain´t it? Well, maybe not…) [“stick”]
    – restrict grid feed- in from the PV system to around 70% of rated capacity. This restriction will only shave off the highest peak for around 1- 2 hours, typically limiting feed- in kWhs by around 3-7% – and you can self- consume all of that shaved peak. Will allow around 30% more PV capacity on any given grid/ subgrid without additional grid cost
    – restrict grid feed- in from the PV& battery system to 50% of rated capacity. All energy produced above 50% will be charged into the battery or self- consumed. This way, the charging of the battery will take place during highest generation and leave the more grid- valuable generation in the morning& evening as feed- in. Enables 50% more PV capacity on any given grid/ subgrid.

    Incentives (cool;-) [“carrot”]
    – offer higher FiTs for different times of the day: at the moment, most systems are pointing north (if at all possible), giving a mid- day peak. By offering higher FiTs in the morning and evening hours, an east-west alignment is incentivised. Gives a more distributed generation profile, with solar covering more daylight load.
    – offer higher FiTs for systems that can be controlled by the grid operator, with remote controll boxes enabling a switch to self- consumption/ battery charging/ EV charging.
    – offer FiT for battery feed- in to the grid, to be remotely activated when needed. Enable partitioning of the battery charge, that is limiting the available capacity for the grid operator and keeping some of the charge in the battery.

    All changes mentioned above are purely for future installations, leaving existing incentives in place – but offer all customers the possibility to change into a new FiT, possibly by guaranteeing at least the same remuneration as enjoyed before.
    Saves massively on admin cost and complexity, while posing a quick fix (stick part) and a longer- term, cost- efficient solution (both parts) as well as enabling a higher PV generation share and fair compromises…

  8. solarguy 2 years ago

    Why can’t we have a system where high roof top solar production is simply put into storage? There would be no need for curtailment then.

    Right at this very moment, our hybrid system is sending 4.2kw out to the grid, the batteries are fully charged and the current load is about 900watts with the TV, washing machine, office A/C and my computer all on.

    Local utility owned batteries could soak up this excess and inject it into the grid in peak demand.

    • Rod 2 years ago

      Agreed, substation based storage would solve so many “problems”.
      But it would entail allowing distributors to become retailers and I can imagine serious push-back in some States.

      • solarguy 2 years ago

        I was thinking of a gentailer or retailer working in conjunction with the network owner. It will be up to AEMO I suppose.

        • David Klemitz 2 years ago

          That is why prices are high(er) !

          • solarguy 2 years ago

            Well what do you propose? Someone has to invest in the battery.

          • Phil NSW 2 years ago

            Given the distributed nature of electrical generation and network assets the concept of distributed storage at either substations or transformers allows for the reduction of transmission losses. If this is the approach then I could see the opportunity to have community ownership by share allotment of the storage installation or VPP. In return the share owners get a substantially reduced rate of repurchased electricity and lower network charges as they are actively contributing to the network infrastructure. This concept has been rolled out to remote communities successfully so why not start introducing it to the main network proper. The AEMO has visibility and control but the customer continues to deal directly with their retailer.

        • Rod 2 years ago

          Could work with retailers. I’d prefer to limit the power of larger gentailers.
          As Electranet are doing in SA with their battery and mooted sync condensers, it creates more competition on the supply side. Which should be a good thing.

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