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Australia’s Grid Operator Plans For Rapid Solar, Storage, & EV Uptake

Originally published on RenewEconomy.

The Australian Energy Market Operator, which runs the country’s grid, has adapted its network planning to take into account a rapid uptake of rooftop solar, battery storage and electric vehicles in the coming years.

Regulators and grid operators in Australia and overseas have often been accused of playing down or ignoring the likely uptake of “disruptive technologies” such as rooftop solar, battery storage and EVs.

But in its latest planning for the transmission network, AEMO looks at one scenario where 33.3GW of rooftop solar is installed on homes and businesses by 2034-35, 40 per cent of all homes have residential battery storage (19.1GWh) and 20 per cent of homes have an electric vehicle – equivalent to 2 million EVs by 2035.

That compares to around 4.4GW of rooftop solar now, a negligible amount of battery storage and barely 1,000 EVs.

aemo-additions

It’s not so long ago that grid operators would say that 10 per cent renewable energy penetration would be more than the grid could absorb. But those fears have already been proven false – South Australia is already at 40 per cent wind and solar, and work at micro-grids such as King Island and Alice Springs has shown high penetration can be integrated.

However, to avoid being caught out – as many utilities, regulators and planners were by the first five years of the rooftop solar “revolution” – AEMO is now planning for scenarios that include rooftop solar meeting all daytime demand in states such as South Australia and Western Australia.

The 2015 National Transmission Network Development Plan – released today – looks at some of the issues that arise from a “gradual evolution” of distributed generation, and the “rapid transformation” described above.

AEMO says that this transformation has challenges. But they are not insurmountable; they require planning, and they will require system changes, particularly on ensuring that the grid maintains the “frequency” and other ancillary services needed for stable supply. But this does not mean fossil fuel generators spinning in the background.

Indeed, in South Australia, the amount of rooftop solar, wind energy and large-scale solar PV could provide more than 100 per cent of the state’s electricity demand, within one or two decades.

There are another couple of significant points made about the “rapid transformation” scenario.

One is that the prevalence of battery storage in homes and businesses means that the anticipated addition of “peaking” gas-fired stations to balance the “intermittency” of wind and solar is no longer needed. Battery storage does the job.

The second is the large loss of coal-fired generation in this scenario — the higher uptake of rooftop solar and battery storage means an extra 5,000MW of coal generation is retired – for a total of 8,000MW.

That appears to support the idea that every panel and battery cell installed in a home equates to reduced coal capacity and output.

As AEMO notes: when you get more domestic solar, that reduces overall consumption and “drives down the utilisation of these (coal) power plants to a point where it is no longer cost-effective to operate.” Go people power!

Here’s another conclusion, and a bit of a blow to all those fossil fuel and nuclear die-hards who continue to talk up the supposed massive cost of grid upgrades needed to accommodate high penetration of renewables: It’s not going to cost anywhere near the amount previously thought.

Like the old 10-per-cent-renewables-is-too-much-for-the-grid thinking of the past, AEMO has rapidly downgraded network upgrade estimates, even in the “rapid transformation” scenario.

aemo-network-costs

“Minimal new transmission network infrastructure is required to transport power to consumers, provided new generation is located efficiently to balance the quality and availability of the fuel source, and network costs.”

There are some areas where “congestion” could occur, such as in Sydney and other areas that might get high renewable energy build. But as discussed recently, the city congestion is likely to be an opportunity for “micro-grids” to be established that could defray, and even reduce, those costs.

AEMO boss Matt Zema says the role of interconnected transmission networks will continue to evolve due to the growth of renewables.

“Historically it was viewed largely as a transporter of bulk electricity supply from generation to distribution,” he said. “however in an energy future with a greater mix of renewable generation, the transmission system will provide critical network support services to maintain power system security and reliability.

“Transmission networks are now required to transfer generation from both ends of the supply chain due to rooftop PV, which is expected to make up the largest form of electricity generation across the NEM. This adds weight to the need for investment in support services to manage power system security and reliability.”

But neither of the two scenarios considered by AEMO in this analysis include solar thermal with storage, or even utility grade storage, of the like being considered by a consortium involving AGL, and installed by Ergon Energy, which says it is reducing costs by around a third.

These will likely be included in future scenario planning as the technologies become more widespread.

The two core scenarios entertained by AEMO are the gradual evolution and the rapid transformation scenarios:

In the gradual evolution scenario, rooftop PV grows to 17.6GW by 2034/35 and battery storage to 8GWh. Large-scale wind doubles to 3.5GW, large-scale solar PV increases more than 20-fold to 3.3GW, gas adds 2.1GW and 3.12GW of coal is retired, all by 2022/23, with no change for another decade or more.

In the rapid transformation scenario, where rooftop PV gets to 33GW and residential battery storage to 11.2 GW. There is more large-scale wind (4GW), and about 2GW of large-scale solar. And there is 8,000MW of coal retirements.

The adoption rate of rooftop solar is based on current tariff regimes, although it is clear that moves to lift fixed network tariffs, or to introduce demand tariffs, could severely curtail the adoption of rooftop solar.

AEMO has the transformation looking like this: rooftop solar quickly provides the largest generation capacity in the NEM (which incidentally does not include Western Australia, the Northern Territory and remote areas such as Mt Isa).

aemo-rapid-transformation

This table below shows how some of the changes may be reflected, state by state.

aemo-rapid-state-by-state

Reprinted with permission.

 
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Written By

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

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