The Institute of Sustainable Futures is working on a model that may illustrate to industry smart solutions to energy use that will also benefit electricity networks.

Industry is suffering under the yoke of crippling energy costs. As these rising expenses are passed on to consumers, the economy suffers. But the rule-makers in Canberra are confused about how to influence electricity prices and set the economy on an upwards path. Instead, they are caught up in a war of ideology about the real cost of polluting energy sources.

Who can set the Australian economy on a path where it isn’t hostage to energy prices?

Some businesses with the luxury of roofspace have installed solar PV systems to generate electricity so they don’t have to buy so much of it from the grid. It is a good start towards solving the problem, but it really is just scratching the surface. If industry is serious about reducing its impact on the environment and driving down costs then energy solutions need to be found that cleverly optimise demand with solar PV and potentially battery storage and thermal storage.

“There is a huge opportunity with businesses driving the next wave of our energy transformation,” says Dani Alexander, research principal at the Institute of Sustainable Futures at the University of Technology Sydney.

New technology can match business energy demand with renewable generation, Alexander says, but it’s a problem that can’t be solved overnight. Every business uses energy in different ways, and not all managers are thinking about the best methods to cut energy use and where to source clean electricity. They have other things to do. The “energy trifecta” of reducing emissions while maintaining system reliability and energy affordability starts to look conflicted, she says, but there is a way it can be met using renewable energy and load management, or “REALM”.

“REALM is the way we can achieve this energy trifecta,” she says, where onsite systems combine renewable energy, demand management, energy efficiency, storage “and smarts” to integrate and optimise them all.

The objective is to limit purchasing from the grid by maximising usage from onsite generation and reducing the size of a storage system so it can provide the same benefit but at least cost. The Institute of Sustainable Futures is about to commence a project looking at REALM systems with a sample of five businesses that operate in three sectors.

Low-hanging fruit

As the energy market becomes more sophisticated there is also the chance to access other revenue streams from network support services and demand response. “These businesses can install systems that improve their bottom line but that also benefit the network,” Alexander says.

A primary concern for networks is the ramping effect that has resulted in regions with high uptake of solar, where daytime demand from the grid has dropped year after year but evening peak has gradually risen so that load levels rise to the evening peak at a steep gradient.

Afternoon ramping is bad. “The heavy ramp rate can cause system reliability issues,” Alexander says. A REALM system can address this issue by optimising use on site.

So every business should be working out how to optimise its energy use and onsite generation, but they’re not. Why? “Businesses are not thinking about their energy system as a system,” she says. “They are not thinking about integrated and optimised systems and the benefits of that.” The secret is to start with low-hanging fruit. Energy efficiency comes first, then managers should think about solar, then consider whether storage is affordable.

With all the noise about rising electricity prices and the fate of coal-fired generation in Australia, you’d expect many business owners to already have energy solutions in place, but there are scant few demonstrated cases of what could be described as REALM systems. And because it’s not yet possible to quantify value in frequency control ancillary services (FCAS) and demand response, true REALM systems are still conceptual and need demonstration.

The institute is working with five industry partners in three sectors and has visited sites to look at energy use, load characteristics, tariff mechanisms and installed solar PV renewable generation, if there is any. Once they’ve worked out the constraints around energy consumption, it’s time to zero in on what’s flexible. And that’s when it gets interesting.

“Given those flexible loads, how can we leverage them? What are the technologies we can bring in and what are the technologies that exist already?”

The trick is to optimise flexible loads and come up with a strategy for each site that will deliver the best outcome for that business. If all goes well, solutions can be adapted for wider use. “It will be unique to each business but we will be aggregating the findings in a way we can share with the broader business community.”

Very varied

Load profiles in industry vary drastically, and the researchers don’t expect to find a one-size-fits-all solution. Different sites within a business can have wildly different loads and other factors such as climate, the solar resource, ability to extract the solar resource, roof space and the ability to install other storage measures (such as heat pumps and chillers to electrify certain loads) allow for much complexity. “What we’re trying to prove is that there are a lot of uncapped gains by considering the system as a whole compared with just looking at static demand,” Alexander says.

The program will be a success if it shows the benefits will make renewable energy more attractive to more businesses and more reliable for the network.

Some of the five companies have renewable energy targets and some have sustainability targets or emissions reductions targets. All of the businesses had decided to install solar or have it already. “They want to see how they can better utilise [solar] and what value they can extract,” she says.  “We’re not proposing there will be a model system that every business can install but it will hopefully be a model approach they can take.”

You can look at a site and simulate the optimal system which hopefully will be taken up by the sector. It will be “the next level of integration and optimisation”, a step up from getting an energy audit or checking the payback on a solar system based on historical demand.

The FCAS market is not easily accessible, she admits, and third-party aggregators may be relied on to step in and provide those services to several businesses, if system owners have the inverter technology that can provide it. There is also the risk that solutions proposed today will be rendered suboptimal if tariff structures change tomorrow. “But that’s not a bad thing,” Alexander says. “What we’re trying to show here is how that could happen in the most productive way. What are the things that are valuable and how can you monetise them in a way that will drive businesses and most importantly the market to deliver services at the lowest possible cost.”

The right partners

The ISF team is expecting to find that the existing tariff structures are not all valued appropriately, and that services are not provided even though they could be easily accessed by networks if their appropriate value was provided. The institute’s Networks Renewed project found this in the residential market, she says.

The goal is to find where are the values that aren’t being monetised, what is their worth and how should they influence tariff structures.

All five partners are “really engaged” in the project, Alexander says. Having said that, there is plenty of opportunity for them to optimise their energy use. “It’s probably an historical thing, in that it hasn’t been given much focus up until now.” The partners have implemented the basic energy efficiency measures, but there is still a lot that can be done.

One of the five businesses operates at the fringe of the grid but going off-grid is not a focus of the project, Alexander says, although the team isn’t closing the door on the idea.

The researchers are in the scoping stage and building a model that will deliver an optimised system to deliver the lowest cost of energy for each business. When ARENA-funded feasibility work is complete the numbers around savings will be released.

“Knowledge-sharing is such a major part of all ARENA-funded projects,” Alexander says.

All the findings will be generalised in a full report and the hope is that business owners will be driven to action when they see what’s possible. “The real knowledge will be developed when we are able to implement the pilot so that we’ll have real-life evidence it makes sense.”

The participants are committed to being part of the knowledge generation process, “which is often a real challenge.”