Opening the hood on networks could turbo-charge distributed energy

When you chat to businesses engaged heavily in commercial solar, to wind farms, to energy management technology, one of their biggest frustrations is they find dealing with networks can sometimes be a bit like dealing with your mother when you were a child.

Mum, would you mind if I did 'X' ... ?

No.

But, I was allowed to do it just yesterday and it's perfectly safe. What's the problem ... ?

Look, you just can't. Conversation over, I'm busy.

Networks have an essential need to manage the reliability and safety of their power system – everyone accepts that. But it can be like a great big information black hole as to what can and can't be done. If you want to dispute or second-guess a network's judgement then you're up for lengthy and costly consulting fees and the risk of alienating someone extremely important to your project. Consequently, many just accept what they're told.

Yet if you want efficient markets that foster competition and support the entry of new players, what do you think might be the most valuable thing you could do as a market designer or regulator?

Top of the list would be ensure disclosure of three things: supply, demand and price over time. If this information is readily available then it keeps everyone honest and makes it hard for any single participant to screw-over others for an extended period of time.

When it comes to Australia's national wholesale electricity market; data on supply, demand and price are readily available. There is very little hidden, thanks to the efforts of the Australian Energy Market Operator and market data software providers, such as Global Roam.

Yet wholesale electricity makes up less than half the cost on a consumer bill and, sadly, readily accessible and useful market information is far less evident once we move beyond the wholesale market, particularly when it comes to network capacity. Networks do provide extremely detailed documents detailing their plans for upgrading equipment and the expenditure associated with it. The problem is, it's in a form that is not particularly useful to anyone else.  

If you provide small-scale power generation equipment or batteries or even have clever equipment that can switch consumers appliances up and down to reduce load on the network, then you are potentially a competitor to network capacity.

But alas, you will not find a market price quoted for what you could earn if you could substitute your product for network capacity in specific locations at peak demand times. Instead you need to get behind the customer meter to capture avoided network value, yet even then prices will not accurately reflect the value of avoided network capacity. For example within Ergon's network there are households that cost Ergon several thousand dollars per annum to service, but Ergon is forced to undercharge them at rates similar to someone living in urban Brisbane.

Also, it isn't particularly easy to discern how much demand there might be and where, for your product to avoid the need for extra network capacity. Network businesses tend not to specify in a neat single map what the rated power demand is that each sub-section of their network can handle during a hot day when demand is likely to peak. Nor do they provide downloadable historical data on actual demand at that sub-section so you could assess the time demand on the network is likely to peak and also patterns of growth. If this kind of data was more easily accessible you'd be able to readily identify where the opportunities were likely to lie.

Thankfully, the Australian Renewable Energy Agency (ARENA) has recognised the need for improved transparency. They will be funding the University of Technology Sydney to create annually updated, free to access online maps of where electricity network constraints are anticipated.

While this won't address the need for a transparent price for avoided network capacity, it will at least illustrate where there is demand for products that could reduce demand load on the power network.

ARENA chief executive Ivor Frischknecht observed: “The maps will help renewable energy and demand management project developers to anticipate network constraints, reduce the need for new grid infrastructure and lower electricity bills”.  

He noted that they may also enable faster development of renewable energy by showing where renewables and demand management can be more cost-effective than network upgrades.

UTS researcher, and a long time demand management advocate, Chris Dunstan explained to Climate Spectator that this online mapping tool could also grow in scope to provide further information to support both network businesses and distributed energy solutions.

For example, he explained that it could be possible for the annual assessment and update of the map to also examine issues like how much solar capacity could be absorbed within certain sections of the network given demand patterns in the area. It might also be used to explore whether the amount of solar connected to the network could be expanded with appropriate controls placed over solar exports. For example, some inverters can allow exports to go up or down depending on whether they might overload the network, or they can adjust the voltage of output if this would be useful. Yet at present networks tend to apply quite crude on-off restrictions – such as outright refusing a solar connection or blanket bans on exporting of electricity no matter what else is going on with the network.

This is leading to obviously sub-optimal outcomes, and it won't be solved by giving networks free reign to readjust their pricing to power retailers. This new project being led by UTS' Chris Dunstan should hopefully be the beginning of improved transparency in power network services.