By Giles Parkinson, www.reneweconomy.com.au
Oh, the irony of it all. Ausgrid, one of the country’s biggest electricity network operators in Australia, is looking to install more rooftop solar as a way of saving money on network investment.
Irony? Yes, because for the last few years – ever since the rooftop solar boom took off – rooftop solar has been decried by its critics as variously a sponge on society, the rich feeding off the poor and a grotesque imposition on the networks.
Now, the networks are turning to rooftop solar to actually reduce their costs – confirmation, if any was needed, of some of the many benefits of rooftop solar, which has already been shown to reduce, narrow and delay peak demand, and reduce wholesale electricity costs by a significant amount.
Rooftop solar – along with battery storage – is also the technology at the core of the development of renewables based micro-grids, which networks are starting to deploy in regional areas to reduce the risk of fires and storm damage, and offer a more secure, reliable and affordable mini grid.
Ausgrid – which is based around the Sydney metropolitan area and the Central Coast and Hunter Valley, is now looking to rooftop solar as a key tool to offset some of the billions of dollars it spends on replacing ageing network infrastructure.
It is offering incentives of $250 per kilowatt installed to encourage the installation of solar on the rooftops of warehouses and other industrial facilities in Sydney suburbs such as Auburn, Erskineville, Alexandria, Redfern, Randwick, Waterloo and Kingsford Smith.
The idea is to use the rooftop solar, along with energy efficiency, as a way to reduce grid demand and so push out the need for Ausgrid to replace that ageing network infrastructure.
Such replacements will account for around 80 per cent of their operating expenditure over the next decade, and are usually made to prevent a ‘major equipment failure’ that would otherwise cut off power to thousands.
‘We consider solar power systems and energy efficiency retrofit activities would offer permanent demand reductions over the typical network need period once installed,’ Ausgrid says in a tender document.
Rooftop solar on industrial rooftops is being targeted because it would coincide with the actual demand from the business activities that take place under the rooftop. And it may lead the way to more innovative solutions such as peer to peer trading and local micro-grids.
Ausgrid is allocating up to $2 million for this trial to see if encouraging more rooftop solar in a certain area can help defray costs. If successful it could be used across the network.
The potential is huge: Using rooftop solar can be a cheaper alternative and means those assets – which have burned big holes in consumer wallets – can be used for longer.
Ausgrid is also looking to encourage more efficient commercial lighting, and is offering retrofits at the equivalent of $25 per energy saving certificate (used in the NSW energy efficiency market), to further reduce demand.
Ausgrid says it regards rooftop solar and energy efficient lighting as ‘permanent’ reductions in demand because once installed, the reduction can be counted on.
It is also looking for ‘temporary’ reductions – things it can call on at certain times – which may include battery storage, load shedding and other demand response initiatives. Diesel gen-sets and co-genertaion and tri-generation will also be considered.
Mark Byrne, an energy expert from the Total Environment Centre who has been critical of excess grid costs, says Ausgrid has one the lowest uptakes of rooftop solar of any network in Australia, thanks in large part to the large number of apartment buildings in the Sydney region.
‘Ausgrid has little need to augment the network in most residential areas, thanks to past gold-plating of the network in response to overly optimistic projections of demand growth and overly stringent reliability requirements imposed by the state government,’ Byrne says.
‘But there are pockets of the network where business demand is increasing, placing a strain on some old cables and substation infrastructure.
‘The great thing about rooftop solar in these areas is that solar energy generation matches the peak demand period in the middle of the day.
‘But solar is intermittent, so it would be good to see Ausgrid offering similar incentives to install batteries on the same buildings, so the network can rely on lower demand from the grid on cloudy days too.’
What’s interesting about this initiative is that it is not just targeting the peaks – which are responsible for much of the over-build and gold-plating in Australia’s networks – but average demand (see graph above from Ausgrid’s tender documents).
Ausgrid’s documents note that demand response from the reduction in load from air conditioners would provide material support on peak summer days but might offer limited demand reductions during average summer days when offices, factories and homes do not have them switched on.
Diesel generators can do the job, but are not so great because of noise, environment and legal issues.
In contrast, changes in demand from energy efficiency or new solar power systems would offer permanent reductions which might vary less day to day or be restricted to select days,’ it notes.
Byrne notes that if this tender is successful, it might also reduce the need for Ausgrid and TransGrid to spend an estimated $300 million in the next five years on replacing old high voltage cables serving central Sydney.
‘We would also like to see Ausgrid go one step further and look at whether solar and batteries could work together to create more microgrids or embedded networks in areas like industrial estates and new housing developments,’ he says.
‘These could be largely self-sufficient, relying on grid supply only in periods of very high demand or when there are outages in the local grid.
‘Local energy trading would be the logical next step, although that probably needs a regulatory change so that customers can have different contracts for their grid imports and their exports to the local network.’
The shift in focus from networks to seeing rooftop solar as a benefit, rather than an impost, comes as regulators and market operators recognise the ability of rooftop solar to reduce peak demand, and effectively push demand peaks to a lower level in the evening rather than mid afternoon.
It also comes after several studies, including this one, note the considerable savings on wholesale electricity costs from rooftop solar. By lowering demand during the peaks, rooftop solar lessens the ability of big generators to push up prices to high levels.
This study put the overall saving at billions of dollars, a handsome return on the cost of federal incentives for small rooftop solar installations.