ARENA’s investment focus is on supporting activities that facilitate higher penetration and utilisation of renewable energy generation and distributed energy resources in Australia, with a focus on:
- behind-the-meter or customer-focused solutions, including approaches to achieve and monetise benefits across the electricity supply chain from new business models to technologies such as storage, inverter controls or load control
- facilitating higher renewable energy penetration in low-voltage networks to allow increased consumer take-up at lower cost, with a particular focus on grid configurations where integration issues are more likely to emerge at relatively low renewable penetration levels
- addressing knowledge gaps for integrating renewables and grids where knowledge is missing or not sufficiently shared, particularly where relevant to deliberations on energy policy, market rules, regulation or network practices and procedures.
ARENA’s assessment of integrating renewables and grids is based on an internal review as well as consultation with stakeholders over the past six months.
Likely scale and potential for growth by 2030-40
Technological change is fundamentally changing the way Australian distribution networks are used. Electricity consumers are increasingly producing electricity as well as consuming it, opening up opportunities for them to work with energy suppliers to manage their demand.
The strong growth of distributed renewable generation (particularly residential rooftop solar photovoltaic (PV) systems) has resulted in high penetration levels on some low voltage networks in Australia. In some cases these high levels are causing integration issues, including challenges in regulating network voltage, power quality, maintenance of network infrastructure and interaction with protection schemes.
Addressing these issues will enable higher penetration of renewables at reasonable cost: at the residential, commercial and utility-scale levels. For example, without additional integration capability solar PV may be systematically constrained in output at around 40% penetration in some grid configurations.
Technologies are available to address some renewable integration issues such as the control of network voltage and power quality. However the penetration levels are dynamic and it is not clear what the best solutions are in different network configurations.
A 2012 report identified $800 million of potentially avoidable network investment over the next 10 years in areas with good solar resources. However these opportunities are not currently being taken up due to a range of commercial and regulatory barriers.
Many aspects of renewable integration are transferable internationally, although there are some unique Australian characteristics. Generally Australia’s main networks are robust, however there are also fringe-of-grid locations and long, lightly-loaded rural networks where renewable integration issues can arise.
Australia’s electricity market structure differs from most countries, and the policy environment is unique and evolving. Accordingly ARENA has the opportunity to provide particular benefits through the development and demonstration of grid integration technologies, control systems and business approaches in the Australian market context.
Gap in ARENA portfolio
As at June 2015 ARENA had invested $231 million in 14 projects with integration of renewables and grids explicitly referenced in the project scope. However in most of these cases, integration is only part of the overall project scope and the specific integration issues being addressed by the projects are narrow or not well defined.
Another 40 ARENA-funded projects also have the potential to contribute knowledge on grid integration issues although they are not explicitly designed for that purpose.
Integration challenges that are under-represented in ARENA’s current investment portfolio include business models for energy delivery in higher-renewable-take-up scenarios, and behind-the-meter and customer-focused technology and control issues.
Further investment by ARENA in renewable integration will be expected to demonstrate the value and reliability of renewable generation combined with enabling technologies such as storage or load control:
- to improve outcomes for consumers
- to maintain and in some cases improve the ability of networks to serve customers or
- as an alternative to upgrading network infrastructure.
ARENA has released a stocktake study that considered more than 170 local and international projects examining the integration of renewables and grids. The study provided an initial source of evidence and will help in further assessment of this investment focus area. ARENA has partnered with the Energy Networks Association to produce an updated version of the stocktake, which will be finalised in the near future.
Projects that aim to address the investment focus areas identified above will add to that evidence base, which will be shared with ARENA stakeholders including key decision-makers (policy agencies, regulators and market operators) as well as businesses and industry associations. While ARENA does not have a role in policy, regulation or market operation, projects funded by ARENA may produce information that informs those processes.
Knowledge activities of interest to ARENA include:
- reducing barriers, improving the efficiency or cost effectiveness of connecting renewable energy technologies to the grid, including deployment of enabling technologies (such as customer, community or grid-based storage)
- performance data that assists developers, investors and/or operators to better understand and assess the characteristics and potential of renewable technologies in an operational context.