Why solar needn't kill the grid

As power prices continue to frustrate, the lure of 'going solo' with solar plus batteries is strong. But peak demand data shows that continuing to share infrastructure is the wiser choice.

Angry at your electricity company?

Sick of them constantly hiking up prices for energy you consume while paying you peanuts for power you export to the grid?

Sick of billing errors that seem to always go in their favour?

Want to shove it to them by installing a battery system and disconnect from the grid altogether?

So, should you go solo? And when?

What if I told you that even if solar system prices halved and battery prices plummeted, it would still be better if you weren’t to disconnect from the grid.

Our charts of the week will attempt to illustrate how, in spite of the frustration many may feel with electricity companies, the ability to pool electricity demand across households via a grid and share the use of electricity supply equipment is likely to remain incredibly useful. This would be the case even if solar PV and batteries plummet in cost such that they become the dominant source of power.

The reason comes down to diversity in household demand patterns. When one household’s demand for power is high often another household’s demand is low, and vice versa at another point in time. This diversity in demand means that the amount of peak power supply a group of households needs if they are interconnected via a grid is far lower than if each household were to meet their own needs individually.

Data obtained by the Australian Photovoltaics Institute for 300 households in Ausgrid’s Newcastle network reveals the benefits of demand diversity. This data represents a goldmine of insight because it details these anonymised households’ demand and solar generation for every half-hour, across every day, for the 2010-11 financial year. Network businesses have, to date, kept such highly detailed data close to their chest, which is a great pity because it would allow a far more informed and rational debate about how we might best address the country’s future energy needs.

The chart below shows the substantial reductions in peak power demand that’s achieved as more and more households’ demand is pooled as a group (the ‘sharing’ blue line), versus what would be required if each household were to be disconnected from the grid (to go ‘solo’ in the grey line). Up to about the first eight households there’s little difference between each household taking care of its own needs versus pooling demand. But as more and more households’ demand is pooled we see their shared peak in demand becomes much lower than the annual peak of each household individually. The end result is that by pooling demand the peak supply capacity required is a third lower than if every household met its needs on a self-sufficient basis.

Peak capacity required for accumulation of households if self-sufficient (solo) versus sharing generation supply infrastructure


Graph for Why solar needn't kill the grid

The common misconception is that every individual household’s demand peaks at the hottest day of the year when they turn on their air-conditioner. In fact there is great diversity in terms of the day at which different households’ demand peaks over the year.

As work carried out by the Australian Photovoltaic Institute showed in a Climate Spectator article (The problems with a ‘pipe’ limit on connection capacity, January 20) close to half of households have a demand peak outside of summer, according to two NSW electricity consumption datasets they examined.


Graph for Why solar needn't kill the grid

Source: Australian Photovoltaics Institute

Not only that, but there is a great diversity in the actual half-hour at which households demand peaks in the Newcastle dataset. The first chart above actually understates the benefits of diversity because it doesn’t distinguish the precise 30-minute interval at which each household’s demand peaks, only the day (there’s only so much data you can display on a chart that’s intelligible).

If we delve into the single day at which pooled demand peaked across the 180 households analysed (a hot day on February 5) and break it down to each half hour, we see total demand peaked at 255 kilowatts. This is less than half the peak supply requirement of these households if they tried to be self-sufficient.

Even if solar systems and batteries were to plummet substantially in cost, being able to halve your peak power requirement is going to be worth a lot of money in avoided solar panels and batteries. Counterbalancing this of course is the cost of grid infrastructure, but a lot of this infrastructure is already in place and paid-for. 

With further technological advances it may be that solar plus batteries is the most economic source of new power supply, yet it’s likely that it would be cheaper for that technology to be supplied to consumers on a shared basis rather than household by household. 

Unfortunately, our current electricity pricing structures and regulatory regimes tend to get people to optimise the sub-section of the electricity system which they can directly control and manage. This may stifle the possibility for us to use new technology to develop a superior shared power infrastructure solution.