Energy Spectrum Australia

Energy Spectrum Australia | Issue 13

Welcome to the thirteenth edition of Energy Spectrum Australia.

The below extract has been taken from our thirteenth edition, and if you have enjoyed reading this article and want to read more about the latest developments in the Australian energy market, please contact Ben Cerini, b.cerini@cornwall-insight.com.au for more information.

COAG Energy Council sets out DER vision to 2025 and beyond

The COAG Energy Council’s Energy Security Board (ESB) published its DER Integration Roadmap and Workplan in September, putting forward a vision for integrating distributed energy resources (DER) into the NEM.

The ESB highlighted the expected growth of DER on the NEM, saying: “By 2030, AEMO expects approximately 50% of consumers to have either solar PV or controllable load; and at times during the day distributed generation may constitute up to 90% of the load across the NEM.”

The ESB’s objective is to optimise the benefits of DER for all electricity system users, regardless of whether they own DER or not. It set out actions to be taken over the next five years and by which parties.

By the end of 2020, among other actions, iniital DER standards should be in place supported by appropriate rule changes – with disturbance ride-through and minimum demand being priority standards. Additionally, new governance arrangements for DER technical standards scope should have been agreed by ministers. Communication, data and platform requirements should be identified.

By the end of 2021, the new governance arrangements for DER technical standards should be in place. Communication, data and platform requirements should be defined and an industry guideline established for operating envelopes. Also there should be continual implementation of tariff reform, including consideration of EV specific tariffs. The ESB said that DER should be incorporated into post-2025 market design.

2022, among other actions, should see Distribution Network Service Providers move towards smarter network management through greater visibility and improved operations (supported by national standards, innovation funding, trials and by direction set in updated regulatory framework). In addition, there should be continual implementation of tariff reform, with implementation of vehicle-to-grid tariff arrangements considered.

By the end of 2025, among other actions, DER should be “positively supporting secure and reliable system operation” due to revised technical standards. Regulation and market design should be in place for DER to be participate in appropriate markets on a broader scale, and there should be “comprehensive coordination or integration of distribution and transmission planning”, COAG said.

For the post-2025 period, the ESB said, over the next five years, a “collaborative and concerted effort will need to be made by market bodies, governments and agencies to prioritise items on the critical path”. This Roadmap is being released coincidentally with the ESB’s post-2025 consultation paper which covers wide-reaching market reforms to meet the needs of Australia’s changing energy system.The ESB noted that the post-2025 market design work will go beyond what is in the roadmap document and is likely to have “further implications for regulation and technical issues

Cornwall Insight Analysis shows that rooftop solar PV alone is headed for ~25GW-30GW installed capacity by 2030 (excluding the ~2GW-6.5GW of distributed battery storage if 20% if new rooftop systems have batteries), which aligns most closely with the DER step change scenario. Under this scenario we can expect DER to meeting 85% of SA, 66% VIC, 57% QLD and 48% NSW instantaneous demand by 2025. Compare utility to rooftop solar in the step change scenario; utility solar is forecast at ~32GW by 2040 compared to over ~35MW of DER. If this eventuates, then most integral part of this workstream will be to ensure that the DNSPs can equitably and safely incorporate this capacity will require more granular and dynamic LV visibility.

Most of the focus of system security and constraints etc. is at the transmission level for utility scale projects, but we will need to be more flexible at the distribution level to ensure that all this new capacity can be integrated. If the market is serious about establishing a distribution market for DER to provide services at both the transmission and distribution level by 2025, then we need to begin developing and trialling the frameworks now. We cannot wait for the technical and regulatory standards to catch up, or the levels of DER to increase, (as suggested in the Open Energy Networks Project) before the market design work continues.