The renewable energy landscape is set for an epic showdown, writes Redback Energy managing director Brian Innes, with plenty of battles and changes in alliance along the way.
While Australians ponder who will win the Games of Thrones saga and ultimately rule the kingdom, we’re also witnessing a battle in the Australian energy sector with a similar set of diverse potential outcomes, alliances and power struggles.
The most recent energy transformation road map produced by CSIRO and Energy Networks Australia predicts an energy grid where wind, distributed solar and batteries will create cheaper, stronger and cleaner future supply by 2050. However, the rate of change is still uncertain as we witness a power struggle between energy incumbents and disruptors.
Australia is an attractive market for renewable energy providers, with plenty of space and abundance of sunshine making it an early adopter of wind and solar energy solutions. We’ve seen a proliferation of households install solar with the latest renewable statistics making for some very optimistic reading and demonstrating a clear and unstoppable trend towards a grid dominated by renewable energy. We also have a well-regulated low-voltage energy network and thousands of qualified electricians enabling the potential for rapid market disruption should the economics dictate it.
While this trend currently benefits all in the renewable industry, we are rapidly approaching a point where we need to think about the end design. The key generation technologies of solar and wind will naturally compete in different time intervals and the energy service technologies such as storage and backup generation will have differing competitive strengths in our future grid.
What is clear is that the battle for flexibility is already over. A traditional grid cannot support one powered by renewable energy. Traditional generators face increasingly high marginal input costs, compared to market disruptors in the renewables sector, meaning they’ll begin to lose market share. They’re also saddled with high fixed labour and maintenance costs, which are simply not built to meet the needs of this new dynamic energy environment.
Distributed PV and batteries are growing in strength. We’ve seen the largest uptake of solar in household PV with 6GW installed and it is rapidly approaching two million systems nationwide. This 6GW will more than likely grow above 60GW with the physical capability set by our 10 million households plus millions more commercial and industrial roofs and standard household install sizes of at least 6kW. Rooftop PV standard install sizes will only get larger as new solar roofing products come to market. This amount of PV will provide more than enough for all our daytime energy needs. The next question is what happens once it gets built and who will curtail?
The energy sector now might look like a battle between the traditional energy players and the renewable sector, but what comes next is much more interesting. Like in Game of Thrones, we’ll see a battle emerge between disruptors looking for greater market share, each hoping they will ultimately succeed and dominate the energy sector. These new dynamics within the energy market will be explored by me in upcoming issues of EcoGeneration: The Battle for the Night (how coal will be challenged); The Battle for Day (big solar and the banks take on PV); The Battle for the Duck Curve Peaks (big battles versus lots of small battles); The Battle for Security (who will we pay once the battles are over and how will we pay them); The Battle for Power Quality (who will pay for services we may not all need), and; The Battle for Energy Trading.
Australia’s energy sector is on the brink of great change. A grid dominated by internet of things enabled renewable generation, storage and demand side management control that harnesses energy from renewables on farms at the edge of the grid is much closer than we think. When combined with a more dynamic and lower-cost capacity and ancillary service investments it will bring a stronger, cheaper and cleaner grid and will allow our existing network infrastructure to be sufficient for decades to come.
We don’t know what the result of Game of Thrones will be, but the future grid of Australia looks bright.