ARENA’s ‘DEIP’ Dive into distributed energy

Distributed energy resources – the uninspiring industry name for the customer owned technologies transforming the energy system.

Whether describing rooftop solar, a home battery, an electric vehicle or the latest smart appliances, these technologies will play a central role in the electricity system of tomorrow.

Finding ways to make small consumer-owned resources work within a grid designed for large centralised generators is a challenge keeping energy experts awake at night.

In the quest for answers, ARENA CEO Darren Miller used his All Energy Conference keynote speech to launch the Distributed Energy Integration Program (DEIP) – a collaboration with the energy sector’s peak authorities, as well as industry and consumer associations.

DEIP will bring together the best and brightest from across the energy industry to find ways to maximise the value of customers’ distributed resources.

The 11 participating organisations include:

  • Australian Renewable Energy Agency (ARENA)
  • Australian Energy Market Operator (AEMO)
  • Australian Energy Market Commission (AEMC)
  • Australian Energy Regulator (AER)
  • Clean Energy Regulator (CER)
  • Commonwealth Scientific and Industrial Research Organisation (CSIRO)
  • Clean Energy Finance Corporation (CEFC)
  • Energy Consumers Australia (ECA)
  • Energy Network Australia (ENA)
  • Australian Energy Council (AEC)
  • Clean Energy Council (CEC)

Start solving tomorrow’s problems today

Just three per cent of energy is produced behind the meter today, but that figure is expected to grow exponentially in the coming decades. According to modelling by the CSIRO and ENA, AEMO and Bloomberg forecasts, up to 45 per cent of all electricity will be supplied by DER by 2050.

Historically, our electricity has been pushed in an orderly fashion from large, centralised power stations in one direction, matching supply with demand from end users.

In comparison the distributed future looks chaotic. Thousands of homes with their own rooftop solar panels, batteries, electric vehicle chargers, smart appliances and home energy management systems will feed electricity back into the grid at some times, and draw power at others.

Capturing the potential of these assets without compromising the stability of the network will require a lot of coordination.

Like a symphony orchestra needs a conductor for its individual instruments to work together in unison, a heavily distributed network will need careful management.

To make it work, changes will be needed to the way the network is regulated, planned and operated. Markets will need to evolve.

If planned well, the transition to a heavily distributed network will help to build a stronger and more stable energy network. But it will be vital that the rules of the market adapt to ensure everybody benefits.

What is on the table?

Examining every aspect of the energy system impacting the success of distributed energy, the DEIP team will work on initiatives to grow the penetration of customer owned assets.

Everything will be on the table – virtual power plants, potential markets for DER, access to data, demand response, rule changes, overcoming network constraints, consumer behaviour and more.

The project aims to grow the penetration of distributed energy by making it faster, easier and more affordable for customers to install behind the meter technologies, within a framework that ensures the benefits are shared.

Electric vehicle charging from a home battery illustration
Nissan’s ‘vehicle to home’ can power a home with energy storied in an EV battery. Image: Nissa

Rewriting the rulebook to account for more behind the meter generation will require buy-in from a lot of stakeholders.

AEMO launched their Distributed Energy Resources program to understand the market opportunities and challenges that accompany the rise of distributed energy.

Their Open Energy Networks consultation, in partnership with Energy Networks Australia, is exploring how to capture the greatest value from DER in the distribution network and wholesale market.

AEMO CEO Audrey Zibelman told attendees at ARENA’s recent parliamentary showcase that the world is watching Australia’s response the rapid uptake of distributed energy, particularly solar.

As world-leaders with one new solar panel installed every six minutes, she highlighted the potential benefits that come with our rapid distributed energy uptake.

“Our goal is to make sure the system remains in balance,” Ms Zibelman said.

“If we can achieve that balance because someone has some distributed resources like a solar plant and storage that they are willing to respond to a price signal, or they’re willing to rotate their pool pumps or air conditioner, that becomes a huge saving to the market.

“If we are able to reduce peak demand by using distributed resources so we are not putting on our most expensive generators, we are able to save about 25 per cent on a megawatt hour price.

Residential pool image
Demand response capacity equivalent to the Liddel Power Station could be captured by Pooled Energy’s cloud based management system

“These are sizable reductions we can make just by making the system more productive,” she said.

ARENA’s CEO Darren Miller agrees that Australia is set to have one of the most decentralised systems in the world, and that planning the transition is vital.

“The 1.8 million rooftop solar systems installed in Australia today are just the beginning,” Mr Miller said.

“As more people invest in home batteries, home energy management systems, smart appliances and electric cars, the traditional models of managing the electricity market face a major disruption.

“The potential is there to maximise the value of distributed resources installed by individuals to support a low-emissions, affordable and reliable electricity grid that benefits everybody.

“It’s important that we plan the transition today, given these technologies will only get cheaper and more popular.

“We are taking a whole-of-industry approach to ensure ideas, knowledge and resources are shared. This is the best way for everybody to agree on a pathway forward to transform our electricity system into a two-way street,” he said.

Chief Executive of the Australian Energy Market Commission Anne Pearson said regulatory changes are essential to capture the value of DER.

“The future power system will see more consumers buying and selling energy in a dynamic way in response to price signals,” Ms Pearson said.

“The AEMC is adapting regulatory frameworks so consumers can optimise the value of their investments in distributed energy resources. This can help consumers manage their bills, while also providing more options for AEMO to keep the system secure and reliable,” she said.