As the tools to generate and manage electricity onsite evolve, energy users are realising they can rely on themselves instead of leaning only on the grid.
Like kids under a Christmas tree, business owners are unwrapping the tools to building their own energy supply and reading the instructions. Some will opt for a bit of solar up top, to provide daytime power and cut their bills. A few may go further and include a battery, to save the sun’s energy for later use. The most studious will design a grid-connected microgrid system, to maximise self-consumption of behind-the-meter solar and storage and make the most of the opening markets for trading electricity and providing services to the grid.
But it won’t all happen by Boxing Day.
In their Electricity Network Transformation Roadmap report, the CSIRO and Energy Networks Australia included microgrids along with standalone power systems and distributed energy resources as necessary means to help keep the grid stable as intelligent networks replace passive ones. The report, released in 2017, looked ahead 10 years and predicted standalone power systems and micro-grids could become a lower cost alternative to traditional grid supply for some users.
From 2027, the authors forecast, “micro-grids and distributed energy resources [will] provide credible non-network alternatives, which, where required, can deliver equivalent firmness as would otherwise be provided by network replacement and augmentation, but at a lower cost.”
Fair Deakin power
Adrian Panow is at the centre of a microgrid experiment, corralling experts across Deakin University as director of Deakin Energy to deliver a microgrid project at the university’s Waurn Ponds campus, a 325-hectare plot near Geelong, Victoria. Generation will be provided by 7MW of ground-mounted solar with single-axis tracking covering about 14 hectares and 250kW of existing rooftop solar distributed around the campus. The project draws on Deakin’s battery research group, who are advising on 1MW of planned battery storage.
Annual load at the site reaches 21GWh, Panow says, and the microgrid project is expected to generate 14GWh a year.
“We have a lot of land, behind the meter but with high consumption, so you can do interesting things,” he tells EcoGeneration. “We are a registered renewable energy generator now – it’s real.”
About 30kWh of battery storage is already installed and the procurement for the remainder is near its final stages. “It will be a lithium battery but we are trying to look at non-cobalt solutions,” says Panow. Yes, you can source cobalt “via ethical means”, but that only leaves other bidders in the global market to compete for what’s left – and some may not be too choosy. Better to avoid the element, if possible, is Panow’s logic. “Also, for a stationary application, lithium ferrous phosphate may well be more appropriate.”
Global supply chains for batteries currently have seven-month delays, he says.
We have the technology
Battery chemistry is one thing, but any system designer and installer will tell you cost is the biggest determinant. Panow says the Deakin microgrid will pay for itself in about 10 years, which to some may sound expensive. “Because we are behind the meter it’s a different equation,” he says, where the grid-connected project will simply offset load from the local network. “For us, it’s in effect an energy efficiency measure. We won’t be islanding because that requires you to add extra kit into the system, and we didn’t feel that it had sufficient research benefits to do that at this point.”
The 10-year payback, then, hinges on the forecast for electricity prices and LGC prices, and what will replace the Renewable Energy Target … and “ultimately we will have some form of carbon pricing; we will match the rest of the world one way or the other.”
Owners of large solar systems running pencil calculations on storage solutions are also holding out for other lucrative benefits to eventuate, such as arbitrage, ancillary services including frequency control, and bulk storage. “But you need a pretty large battery to do that.” After it’s put to use to cut peaks, Panow hopes the battery will enable Deakin to enjoy lower demand charges.
Groundwork is underway on land operated by Deakin as a vineyard in times past, he says. “It’s nice and flat, so we have a unique opportunity there.” One half of the campus is being developed as an advanced manufacturing zone – including the facilities of CEFC-and-ARENA-backed Carbon Revolution, which turns out lightweight wheels for expensive cars. The other half is dedicated to sustainable technologies, including agriculture and energy generation.
Initially the idea was to commission someone else to design and build the entire system, but where’s the challenge in that when you operate a university filled with brains and vision? Instead, the project was divided into nine major tasks and kept in house. Panow admits some parts of the job might have cost less if Deakin engaged the commercial world, but the smarts gained by tackling it in-house makes it all worthwhile. “The knowledge is embedded in the university.”
When speaking at an Asian Development Bank Clean Energy Forum in July, Panow heard peers in member nations lament the lost opportunity from passing the job of designing and building a microgrid to other parties. “None of the knowledge is retained in the country, so they can’t do the next project,” he says. “And if something goes wrong, they don’t have the knowledge or capability to fix it.”
Partners include Mondo Power and AusNet and the ground-mount system will be installed by Next Generation Electrical. Deakin is funding the $30 million project and expects it to be finished early next year.
Expertise gained in Victoria can easily be exported and Deakin has 90 PhDs in India, where there is fairly intense interest in microgrids. “A core strength of Deakin is the cyber security work,” Panow says, “ensuring the modern energy framework doesn’t expose you to greater threats than what you’ve got now.” South Africa recently suffered a ransomware event on its grid and India, not on the best terms with all its neighbours, is alert to the problem.
If owners of microgrids want to unlock their full value they have to find a way to export that doesn’t cause voltage rises on the grid. Shaun Scallan, the institutional program manager of Planet Ark Power, says he has the answer.
Planet Ark Power’s “secret sauce” ingredient for grid-connected microgrids is EleXsys, a piece of proprietary technology that can ensure energy is exported by owners of commercial and industrial solar systems without causing voltage irregularities on the network. “It’s addressing the problem of too much solar on the grid,” Scallan tells EcoGeneration. “It’s a smart inverter, to reduce it to a term people will understand.”
The theoretical impact of owning such a device, of course, is that the owner of a solar system can add as many extra panels as their roof will support and set out into the business of selling electricity. The technology won first prize for the intelligent grid category at the Startup Energy Technologies in Germany in May.
It’s a big step in thinking about energy, but why stop there? If such systems incorporate storage, an owner might prefer to match as much of their on-site generation to their load as they can and lever value from an investment that way. Planet Ark Power is pitching this solution to business owners as a power purchase agreement, with agreements around 10 and up to 25 years.
In return for a contracted price, participants hand over some of the capabilities of their system to Planet Ark Power. “To get that energy price, we manage the discharge of the battery into the market to deliver certain services,” Scallan says, such as trading in the spot market and, one day soon, providing power quality and reliability support to the local network, including voltage, frequency and, possibly, inertial services “which are quite highly valued” – not to mention demand response.
It isn’t easy to explain the value in such solutions to customers, Scallan concedes. “Most businesses aren’t set up with energy management skills in-house.” This is even as energy escalates into the top five input costs in some businesses. Best to explain it in cost terms and as a show of support for renewable energy, which everyone (except many of our politicians and journalists) realises is the future.
It’s all very well to push renewables, “but it’s got to make financial sense or people aren’t going to do it – bottom line.”
After a trial on the Energex network Planet Ark Power has been cleared by the Queensland DNSP to deploy the technology at 50 more sites. The technology was trialled on a 330kW system owned by a Queensland car dealership to facilitate export. “We proved that it did work … now we have to prove it in other DNSPs.”
Whether DNSPs that earn regulated returns will gravitate towards solutions that minimise network investment remains to be seen. All consumers will benefit if networks spend less as a result of large energy users installing systems that reduce demand, however. If technology that settles voltage issues is adopted at scale, it stands to reason that supply charges will fall.
If too many consumers are tempted to leave the grid, and the CSIRO estimates 10% may leave by 2050, incentives should be offered to keep them connected so they can sell their own distributed energy resources. As supply costs are spread evenly, savings could reach around $1 billion between 2030 and 2050, its Electricity Network Transformation Roadmap report says.
The EleXsys tech is one part of the “microgrid as a service” proposition Planet Ark Power is pursuing with customers. With it, more solar can be added and exports maximised. When incorporated in a system with storage, it can also shave peak demand to reduce peak load charges. But, like a Swiss army knife, it can’t perform all of its functions at once. “You can’t take stones out of the horse’s hoof while you’re clipping your own nails,” Scallan says.
On the flipside, in a world where exported solar causes little or no stress to the grid the DNSPs will need to spend less on feeders, transformers and everything else. Batteries, however, are still expensive. “It’s difficult to make this work without some sort of subsidy.”
Dr Adrian Panow will chair a panel on microgrids that will include Shaun Scallan at All-Energy 2019 on October 23 at 3pm.