As new generation and energy storage solutions of all sizes are added to the grid here, there and everywhere across Australia, sources of renewable energy will inevitably replace coal and gas. The transition to clean energy will only be deemed to be a success, however, if an ever more complex scattering of energy resources is coordinated to supply users optimally and without interruption.

It is a massive task ahead of us.

With this in mind, Energy Networks Australia and the Australian Energy Market Operator have released a report which describes how all customers can benefit from fully integrating customer solar, battery and controllable devices into the electricity grid, and then outlines the capabilities and actions required to start the process.

The Required Capabilities and Recommended Actions Report, part of the Open Energy Networks project, recommends a schedule of programs (shown below) that will allow distributed energy resources, or DERs, to fulfill their potential, so to “make it easier to technically operate the distribution network and the energy system in a high-DER environment”.

“Targeting investment into areas of very high DER penetration and pilots and trials will be important to avoid a scenario where the industry enters blindly into an expensive and broad ranging set of reforms that deliver little customer benefit,” the authors say.

Some of the pilots and trials have already begun, largely with ARENA funding, but solutions must be found to issues related to DER, including: improving low-voltage network visibility, improving forecasting and planning of transmission and distribution to maximise the benefits from DER, integrating DER into the wholesale market and standardising the procurement of DER for network services.

“Early trials and pilots are raising several policy related questions that need to be addressed,” the authors say in closing. “These include network access rights for DER and equity with existing installations, appropriate tariffs to manage DER (especially aggregated DER integrated into the wholesale market) and the regulatory investment tests to benchmark investments aimed to optimally manage DER in the distribution networks.

“There is also much work being done to ensure that DER can continue to be safely installed and integrated into the network and the system. This includes better standards of installed devices and improved connection processes.”

Ahead of the pack

Australia is leading the world on the take up of customer energy resources, with a profound acceleration in generation from solar over the past two years, as shown in the chart below.

Forecasts are notoriously fiddly but AEMO and ENA, working with the CSIRO, go out on a limb in the report to anticipate Australia will be a world-leader in harvesting its electricity from a vast number of sources by 2040.

Energy Networks Australia CEO Andrew Dillon said getting the integration of these technologies right could deliver more than $1 billion in benefits to customers by 2030.

“Our electricity grid was not built to accommodate large amounts of power being generated back into it from multiple small sources – reverse electricity flows,” Dillon said.

“Australia has more rooftop solar per capita than anywhere else in the world and this boom in solar and batteries creates both significant challenges and great opportunities for our local distribution networks.

“The recommendations in this report are designed to shape a future electricity grid that enables us to keep prices down, keep the lights on and to maximise our use of localised solar and storage.”

AEMO managing director and CEO Audrey Zibelman said the report and stakeholder feedback highlights a once-in-a-lifetime opportunity for Australia to move to a two-way system for electricity production and distribution.

“The world is looking to Australia as the leader in installing rooftop solar and batteries to incentivise and integrate these customer resources to benefit all,” Zibelman said.

“AEMO can see a future where consumers’ controllable devices will have a marketplace to supply not just energy, but system and network services that reduce overall energy costs and help maintain system security.

“Through this process with Energy Networks Australia, the vast majority of stakeholders agree that actions are needed to be taken to build capabilities and trial new market mechanisms to ensure the final design delivers the benefits at the lowest cost.”

The objectives of the report are:
  • Ensuring the system can cope technically so more customers can connect and receive the full benefits from their solar and storage devices.
  • Maintaining and improving power quality and reliability at the lowest cost to customers.
  • Being able to harness and manage the collective generation capacity of distributed energy resources to support power supplies, manage peak demand and reduce the need for investment in new generation and poles and wires infrastructure – saving customers on power bills.
The report outlines a set of required capabilities:
  • Enabling distribution network service providers (DNSPs) to improve network visibility – i.e. know where DER are installed and how they behave in real-time, so the local distribution network and the wider system can be managed.
  • Defining network constraints or ‘operating envelopes’ so customers can be advised how much electricity they can export and/or import from the grid.
  • Having standards in place to communicate these ‘operating envelopes’ to aggregators, retailers, owners of DER and AEMO to help ensure the safe and secure operation of the network.

A final recommendation report will be released later this year that makes a recommendation for a preferred framework and the steps required to get there.