Evolution of the Australian Energy Network
By Kyle Murphy
Australia, like many countries globally, is beginning to experience rapid changes to its existing energy infrastructure as demand for renewable energy and carbon abatement increases. The country has managed to build a very strong transmission network that spans most of the continent, however it is currently better optimized for the traditional one-way flow of energy that has been built around traditional energy sources. In order to effectively integrate Distributed Energy Resources (DERs) – renewable energy units such as solar PV commonly found on homes and businesses – Australia needs to overcome some key technical, economic, and regulatory challenges.
One of the biggest challenges that currently faces the energy network is that of predicting and managing supply & demand, an issue that only becomes more complex during a radical transformation of infrastructure. One idea for alleviating congestion in energy transmission comes from the EVOLVE project1, one of the recipients of ARENA’s $10 million fund for projects and studies that support the integration of more DER into the network. EVOLVE’s goal is to identify congestion in the energy network – much like how google maps visualizes & predicts traffic congestion on roads – and use that to help consumers adapt their energy usage and decrease congestion. The ‘Guide to Australia’s Energy Networks’2 by Energy Networks Australia suggests that Gas has its own decarbonization journey, and that renewable gases such as biogas and hydrogen have the potential to become mainstream and complementary sources of energy to traditional gas. Hydrogen from renewable sources does not contribute to greenhouse gases and can act as carbon neutral reserve energy,
This may also help handle the excess renewable power produced during the day, an issue that results in the ‘Duck Curve’3 that makes energy regulation extremely difficult during peak demand. Rather than wasting excess solar and wind energy during the day and then ramping up power stations in the evening, using Hydrogen as a means of storing renewable energy for later use could increase the efficacy of existing technologies.
In a joint report by CSIRO and Energy Networks Australia, titled ‘Electricity Network Transformation Roadmap: Final Report’4, there is a broad discussion about the technical solutions to achieve inertia and frequency management outcomes, while detailing a roadmap to hit some ambitious goals for a transforming electricity system by 2050. The goals of the report are as follows:
Customers retain security and reliability essential to lifestyle and employment
Networks pay distributed energy resources customers over $2.5 billion per annum for grid support services by 2050
Electricity sector achieves zero net emissions by 2050
$16 billion in network infrastructure investment is avoided by orchestration of distributed energy resources
Reduction in cumulative total expenditure of $101 billion by 2050
Network charges 30% lower than 2016 » $414 annual saving in average household electricity bills (compared with roadmap counterfactual, business as usual, pathway)
A medium family who cannot take up distributed energy resources is over $600 p.a. better off (in real terms) through removal of cross subsidies
By 2050 it is estimated that “customer owned generators will supply 30-45% of Australia’s electricity needs.” This is a huge chunk of Australia’s energy production that until this point has existed entirely on the opposite end of the energy network. The reports findings indicate that "Customers… are likely to determine more than a quarter of all system investment decisions between now and 2050.” This ties in closely with DERs and the idea that the energy network needs to adapt to a two-way transmission framework. By enabling communities to produce a large portion of their own energy, the inefficiencies of long-distance transmission is minimized and may result in a more resilient and affordable electricity grid. The report claims that a key change that needs to be made is in cost-reflective tariffs, which requires almost universal adoption of smart-meters.
There are a lot of ideas floating around about the best way to evolve the Australian Energy Network, though many appear to place a heavy emphasis on the role of the customer and the decentralization of energy production. With Australia’s vast expanse of open land, the role of solar PV and wind is undoubtedly large – however it is not the sole solution. Taking advantage of valuable existing infrastructure such as that of gas is crucial, where we can help decarbonize and store energy through biogases. Policymakers must remain vigilant to avoid over-investment and keep prices low, and reward market actors for engaging with future electricity systems.