Energy Networks Australia’s Welcome to the Grid Edge seminar in Sydney in May included a panel discussion about how the electricity market may be influenced by new technology which orchestrates exports of solar to the grid and provides new markets for trading.

Panel participants

Dr Phil Blythe, CEO and founder, GreenSync

Michelle Taylor, manager technology development, Ergon Energy

Dr Nick Engerer, CTO, Solcast

Chaired by Siham Knowles, general manager network engineering, AusNet Services

Powerful new technology is about to redistribute influence within increasingly interconnected web of energy generators, consumers and network and services providers.

Whether it’s the influence cloud forecasting software will have on system-owners’ self-consumption levels or the shift towards localised peer-to-peer energy markets, the future for network providers and consumers will be nothing the past.

Siham Knowles, chair: How important will solar forecasting be for networks businesses given the increase in installations of storage and energy management systems?

Dr Nick Engerer, Solcast: If you look at the companies that are on the leading edge of battery management systems, they are all using some sort of solar predictive capability to know how to optimise the performance of their battery. That’s already happening and already important. But where this will go in the future is, it will not just be optimising one battery; it will be knowing what is happening with the PV fleet in your neighbourhood – these sort of localised distribution network markets. That will become a way to discharge-charge optimally based on the solar variability because there is so much rooftop PV penetration. The two are exceptionally linked and the intelligent orchestration will depend on the sunshine availability.

Michelle Taylor, Ergon Energy: Every time you cycle a battery it’s costing you money. If you’ve got predictability you can actually downsize the amount of storage you need to put in, particularly in this day and age when battery prices are still a little bit too high. Every tool you can use to optimise how you use your storage is vital.

Dr Phil Blythe, GreenSync: The whole field of DERs [distributed energy resources] is about forecasting, optimisation and control. Forecasting is a key part of it. Given the rate solar penetration is growing it’s a no-brainer in terms of its importance. If you have poor forecasts you have poor efficiency in the way you’re using these resources.

From left: Phil Blythe, Michelle Taylor and Nick Engerer. Photograph: Mike King, Trick Media Photography

Knowles: What role does demand management have in facilitation of an exchange for distributed energy resources?

Blythe, GreenSync: There are so many new terms – DERs is the resources, demand management is the things you do with them, particularly behind the meter. But DERs can also be in front of the meter; some can be dropped into generation sites. On a solar site you can have storage, which can be load-shifting. In terms of what the marketplace construct is, it’s about unlocking value. These DERs can get access to where they’re needed.

The concept around marketplace is if DERs are able to reduce demand charges that’s something consumers can do locally, or tariff-shift. The problem for consumers is getting upstream; getting to understand how they could contribute to a transmission constraint, or a substation issue, or a voltage problem on the local feeder.

There are also the frequency regulation markets. How do you participate as a smaller user in those markets? This is about trying to bridge that gap. This will give consumers a broader range of things to participate in and get faster returns on … or even a reason why they should have controllable or curtailable solar.

Question from the floor: There are forecasts of flat demand, but does that overlook the impact electric vehicles will have as they replace conventional cars? People will buy them as consumer items pretty much in ignorance of the impact they will have on the network.

Blythe, GreenSync: Everything’s getting smarter – the networks, retailers, consumers, the devices being connected to the network. Then they all need to start speaking to one another. It’s not one large smart grid that’s run by a centralist operator, it’s going to be thousands of smaller ones that are decentralised and have some form of decentral operation. That is the challenge.

It’s interesting how the debate around EVs has been around forever. We’re dealing with the battery onslaught now, and I hope we don’t have a third onslaught on our doorstep right now. The view has changed about the rate of change at which [EVs] will come, and there is a view we will probably be able to absorb that [demand for electricity to charge EVs] because we are experiencing almost a flat load and it’s not going to escalate as much. That’s the current theory but it could change in a couple of years.

Taylor, Ergon: I’d like to hope that given the learnings we have had from [the similarly energy-hungry and popular technology] air-conditioning that we have already started and will continue to apply those learnings in relation to the next load growth – EVs and battery charging in general. I know there has been active participation from more networks in this space than there was in the advent of air-conditioning.

EVs are generally, but not always, a little bit like hot water systems in the sense that people want convenience and the convenience can be there, but there is also that ability to have controllable load. We’ve got smart devices … and there should not be an EV charger out there that is not smart.

Engerer, Solcast: People will really enjoy filling their EVs up with free sunshine, and we’ll be happy to tell them when it’s going to be sunny.

Question from the floor: Phil, what are some of the similarities and differences in approach between GreenSync’s peer-to-peer deX [decentralised energy exchange] market and the New York REV project?

Blythe, GreenSync: Fundamentally [New York’s Reforming Energy Vision project is] solving a slightly different problem to what we’re focused on at the moment. They’re in that evolution towards transactive energy, however they’re focusing on the concept that people want to share their energy with their neighbours – and that is true in the sense of community. The problem with that is that there is a distribution network in between those neighbours and the problem with virtual metering and the idea that I want to have a community solar construct is the fact that we haven’t evolved to the point where we can figure out how to charge for shipping that energy even if it’s around the corner or down the road.

What we’re trying to build is the capability for networks to get towards locational-based pricing. We’re trying to evolve the discussion in something that’s in a regulatory sense quite acceptable to move towards this direction because we’re saving on capital spend and being more efficient, but we’re progressing the movement of utilities towards a different world. That’s focused on understanding eventually how you can provide an incentive for the fact that it’s not free to ship your energy down the street, but it’s going to be a lot cheaper than shipping it from one side of the state to the other.

Question from the floor: The ENA Roadmap predicts 50% generation from solar and behind-the-meter and talks about large markets for ancillary services and energy services. Do you see these markets emerging and becoming as large as predicted?

Blythe, GreenSync: It’s not about one market, this is not a secondary market we’re envisaging; this is hundreds if not thousands of markets, because of the locational aspect of these markets. Frequency is the largest [market], and it sits quite sensibly with the market operator, AEMO. However, a market operator dealing with a single 5kW battery storage system is cumbersome. If you were to apply the same level of rigor that they apply to the large generators down to a residential battery and storage system, it’s just untenable to include those storage devices into the larger FCAS market. So we need to think about it differently.

That’s a fairly unique case, where you’re trying to find a way to give access to the larger markets. But I think geographic markets are a real thing. We’re going to need to figure out how to build marketplaces which are closer to where the energy is generated. The role of the system operator will be to manage stability and reliability in those areas. We do see the evolution really pushing for thousands of markets rather than one large secondary market.