A message from our Chair

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Changing the grid so smart solar can power the future

Sometimes you can have so much of a good thing that it goes to waste.  Drought soaking rain ends up in stormwater drains instead of reservoirs or water tanks. We produce some of the highest quality food in the world, but more than 7 million tonnes, or one in five bags of groceries, is thrown away. 

Australia faces a similar challenge as we continue to enthusiastically embrace rooftop solar. We are the world’s most passionate solar adopters and it’s obvious as to why.  It’s a great way to both decarbonise our energy supply and give us more control over our energy consumption and electricity bills.

But as more and more of us sign up to solar, the volume of energy going into the grid in the middle of the day increasingly risks outstripping demand, putting stress on a system that was effectively built as a one-way street. Our networks are beginning to struggle with the demands of two-way traffic. When that happens, the opportunity to use solar energy just goes to waste.

Costing consumers

Aside from limiting our ability to reduce emissions, that results in poor outcomes that cost consumers money.

Those who own the solar panels are being stopped from exporting – depending on how crowded their part of the network is. This has already happened in South Australia and in some parts of Victoria.

But it doesn’t have to be that way. If we can move renewable energy around in the grid to when and where it’s needed, we can better harness the value of what’s on our rooftops so everyone benefits. But it means we’ll need to think differently about how often we use solar ourselves and when we send it.

This is all the more important because there’s another new energy opportunity heading our way we don’t want to waste – and that’s the significant potential benefits electric vehicles present for the grid. More than just a transport option, EVs are essentially batteries on wheels and could be a boon for – or a drain on – the power system depending on how you integrate the technology.

Electric vehicle opportunities

By the end of this decade, there will be at least half a million of them on our roads and in our garages, with the uptake expected to surge in the 2030s as choice and charging facilities grow while prices come down. This means our cars can join our solar panels in better managing our own energy use as well as contributing to the greater grid – by helping to line up supply with demand to avoid network stress. It is already possible to use bi-directional charge controllers so electric vehicles can export into the grid at peak times, and then charge themselves when demand falls in the middle of the day.  But there are no financial incentives to reward that behaviour. And what we don’t want to see is a flood of EVs creating new peak demand challenges because everyone is charging up at the same time.

Reforms released by the AEMC today will address these issues for solar, batteries and electric vehicles. They’re designed to set the grid up for the future. They’re forward looking – but that’s deliberate – we don’t want our energy sector to be stuck on a hamster wheel of constant catch-up to meet consumer needs.

For the first time, power network businesses will be obliged to treat energy exports as an actual service – this means they will be judged on how well they get their networks “match fit” to handle all of the new solar and batteries we expect to come on. They’ll have to do it efficiently, so their investments will need to be smart. That will most likely be new technology solutions to give them the information they need to better see what’s happening in real time on their poles and wires. That’s a lot cheaper -- and better for our electricity bills -- than building even more of those said poles and wires to manage extra two-way traffic.

Removing solar export bans

We have also ended the practice of networks putting blanket bans on solar exports – so a lot more of those with solar panels will be able to export excess energy to the grid.

And we’re allowing them (not obliging them) to offer new incentive schemes that reward consumers for sending power when the grid needs it, and discourage them from doing so when it would  put the network under stress and cost us all more.

Pricing schemes will have to include a basic free option, so you don’t have to pay anything if you don’t want to. If you want more than that you’d likely choose a plan that could see you earning more at some times and a little less at others. But you would have control over that, and you’d likely be better off because you’d have more options to earn and save. You might earn less if you did nothing to change your energy behaviours. But if you sent more energy in the evening peaks after storing it in a battery or used more of your own solar during the day, you’d benefit. Simple set and forget technology already exists to help people with their energy usage. Timers let you program your air-conditioner to come on just before you get home to cool the house down using your own solar energy, to a delayed start function on your dishwasher.

We have put an important caveat in all of this requiring everything to be done under the watchful eye of the Australian Energy Regulator. Networks will be required to consult with their customers and take into account the policies of the jurisdictions in which they operate before making any changes. The regulator has the power to approve or reject any network proposals that don’t deliver a long-term benefit to customers.

`Solar is – and will continue to be -- a good investment under these changes. We all want the same thing here – a way forward to a renewable grid – more solar and batteries, not less. The biggest disincentive to solar will be to do nothing. And none of us want a good thing to go to waste.