A market which links distributed energy resources is due to be tested for its ability to offset investment in infrastructure, writes Jeremy Chunn.

It’s a simple idea. If many sources of solar PV, whether they be factories or households, can coordinate their exports of surplus energy, the benefit to the network will outweigh the cost of bolstering it for those rare days of peak demand.

Once all the technology is in place, a decentralised energy exchange – or deX – will solve a lot of problems, says GreenSync general manager product strategy Bruce Thompson.

If the idea takes hold, there is the potential to shift the entire mindset of the electricity market.

“The future has suddenly arrived,” Thompson says. “We’ve got cost-competitive large-scale renewable generation, a huge drive for behind-the-meter for households investing in solar and we’re at the cusp of a projection for a large investment in battery storage behind the meter.”

GreenSync general manager product strategy Bruce Thompson.

The objective at the deX HQ, Thompson says, is to identify some basic principles around establishing a market where the value of the renewables behind the meter, or distributed energy resources (DERs), is transacted “in an orderly way where you can meet the physical requirements of the network” while also keeping the regulators satisfied.

The inclusion of energy generated by solar PV on household rooftops and stored in batteries would amplify the possibilities for the deX architects’ ultimate vision, but with an often-quoted seven-year payback consumers are slow to commit to the technology.

Thompson senses some “angst” among solar householders about having to settle for whatever they are paid for surplus energy, and he reasons that a surge in demand for batteries is near. “The projection is that batteries are expensive today but they are going to rapidly drop in price over the next five to 10 years,” he says, pointing to industry projections that 30-40% of generation across the grid will be behind the meter by about 2030. “The value in the ability to harness that is enormous for the whole grid.”

Demand response mechanisms in other markets eschew the complexity of orchestrating output from residential systems and rely solely on megawatt-scale participants such as commercial and industrial energy users.

If the energy that is corralled by deX from its pool of participants can be coordinated and made available for controlled dispatch, it will be marketable at a wholesale level. It involves deX establishing a common protocol for being able to dispatch a unit of energy into the grid and building a platform for registration and trade of energy units, work it is undertaking with networks United Energy and ActewAGL, software businesses GreenSync and Reposit Power, and retailer Mojo Power.

Hopefully it will all be operational in time for summer, when it is anticipated Hazelwood’s absence will be keenly felt.

A prototype of the platform is expected to be released sometime before October and later it will be integrated into a project GreenSync is involved in on Victoria’s Mornington Peninsula providing network support for United Energy, where during summer heatwaves there is a huge amount of air-conditioner use “and the current grid isn’t able to supply enough electricity,” Thompson says. In that example, it is more cost-effective for the network to provide incentives for households to install solar and storage than it is to upgrade the network. Over the coming years Thompson expects about 1,200 battery-owning households to be involved, to provide about 11MW of network support.

The deX program will start with commercial and industrial system-owners and expand to include about 1,200 battery-owning households, which Thompson expects will make up about 5MW of a total 11MW of network support.

“The network program is solved by existing GreenSync technology and large commercial and industrial partners, but the opportunity is opening up to households to basically get an incentive to invest in good technology that benefits them all year round behind the meter but provides an additional incentive if they are willing to participate during those peak events,” he says.

Thompson estimates system-owners taking part in the United Energy program are subsidised to the tune of about $1,000 over five years, via bill savings or discounts on the purchase of technology. His estimate is that United is deferring “several tens of millions” of dollars in investment in infrastructure that would only be used once or twice a year. “The overall economic value is really efficient for public infrastructure,” he says. “We’re avoiding what was previously tagged as gold-plating.”