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Breaking the Gridlock Quantum Shift in Supply Chain - How disruptive technologies are reshaping the electricity industry? Craig Chambers Market Sector Director – Power Generation
Breaking the Gridlock Quantum Shift in Supply Chain - How disruptive technologies are reshaping the electricity industry?
Craig Chambers Market Sector Director – Power Generation
Overview
Distributed Energy – A Quantum Shift
Global Trends & Australian Case Study
Future Adaptation Considerations
Transmission & DistributionWholesale End User
Automotive
Commercial & Industrial
Residential
Definition of Distributed Energy Resources (DER)
Energy EfficiencyLighting
Smart AppliancesBuilding Efficiency
Categories Examples
Distributed Generation
SolarCHP
Wind
Demand ResponseDSM
Electric VehiclesEnergy Storage
Smart GridsMicrogrids
Smart DevicesVirtual power stations
DER
Demand Side Market
DER
DER
DER
The Quantum Shift
Cause • Commercialisation and rapid
uptake of RE and DER • Slow regulatory change and
pollicisation of climate change and the electricity policy
• Industry, government & regulator motivation to maintain the status quo
• Inaccurate forecasting, lack of data transparency and awareness of the consumer
• The system is now grid not generation centric
Effect • Poor asset utilisation and
overinvestment • Unintended power quality
and system issues • Inaccurate Demand
Forecasting • Delayed reform and
privatisation • Lack of competition in the
value chain • Increased investment risk,
costs and instability
History of electricity sector
Build Central Capacity
Distribute Fuel
Create economies of scale
Build RE Capacity
Be reliable and stable
Build T&D Capacity
Reduce GHG
Be flexible & efficient
Build PV Capacity
Don’t build & integrate DER!!!
Give me back control…
BAU
Innovate
Today
Valu
e to
End
Use
r
Time
Industries challenge is to abandon sunk investments for an inevitable distributed approach
Global DER Evolution
USA - California Being the national leader of installed PV capacity California DER uptake is spurred by renewable targets and they are pursuing mandates to ensure DNSPs better integrate DER onto the grid.
Germany Traditional coal and gas fired power stations are closing as a result of aggressive renewable targets. >50% of the countries capacity is now DG meaning major reforms are underway.
USA – New York Fears of repeated power outages caused by natural disasters such as Hurricane Sandy are the drive behind NY states Reforming the Energy Vision (REV) program.
Japan Rising power prices and a consumer focus on self-sufficiency post the Fukushima nuclear disasters has lead to greater uptake of DER and micro-grids.
India Focus is on using DER, renewables and smart technologies to achieve their goal of electricity supply to 100% of the population by 2027.
Australian Solar Market Story
60c tariff commenced
20c tariff commenced
feed-in tariff deadline for both schemes
44c tariff commenced
8c tariff commenced
8c tariff expires
0
20
40
60
80
100
120
140
No.
PV
Syst
ems I
nsta
lled
(‘000
)
NSW
QLD
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
20
40
60
80
100
120
140
160
180
200
Thou
sand
s
Thou
sand
s
Installed CapacityTotal InstallationsReported kW installed
Solar Market Story (cont.)
2028
2016
2024
2028 2021
~
2018 2030
FiT Expiry Year
-
200
400
600
800
1,000
1,200
1,400
NT ACT TAS WA SA VIC NSW QLD
Thou
sand
s
Sum of capacity (kW) Sum of installations
Over 4GW installed over 1.3m installations in 5 years
It’s Duck Season…
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dem
and
(MW
)
Grid impact of storage charging behaviour
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Load
/ g
neer
atio
n (k
W)
5kW PV output Household load Network load (no storage) Network load
12pm 12pm 12am
Peak
Discharge
Peak
Discharge
12am
Solar
Charge
Solar
Charge
Value of DER (Storage)
Shared benefits of DER
Current economic value of DER
Australian DER Forecasted Trends
Source: AEMO 2015
o Energy efficiency is an unknown quantity.
o PV will continue to grow significantly in residential applications
o EVs & Storage will influence peak load not necessarily energy and hence future capacity investment requirements.
o DER has the ability to reduce Transmission losses and improve Distribution losses.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000GWh TransmissionLosses - AEMO
Storage - AECOM - AEMO
Storage - AEMO
SmallNonScheduledGeneration - AEMO
RooftopPV - Residential
RooftopPV - Commercial
EnergyEfficiency - AEMO
Future of Utility Reaction
Defensive Proactive
Invest up to meter Invest up to meter
Deter investment behind the meter
Defensive tariff approach
Limited or no engagement
React to regulatory change
Invest behind the meter
Cost reflective / incentive pricing
Consistent engagement
Promote regulatory change
Partner / acquire change agents
Diversify through value adding
Factors Proactive Industry Adaptation
Defensive Unplanned Uptake
Regulated Asset Base
Peak Demand
Energy Demand
Load │Capacity Factor
Generation
Demand Forecasting
Cost of electricity
Probable futures outcomes…
Slow Growth
Stabilise/ Moderate Growth
Growth
High Growth
Rapid Decline
Centralise Decentralise (targeted)
Degrades Improves
Greater Certainty Continued uncertainty
Stabilise Increase
Centralise Decentralise (disruptive)
Stabilise or declines
DER Adaptation Considerations
• Disaggregate to Re-aggregate
• Redefine Planning & Rules by removing the bias against DER
• Move from passive to active grid management
• Data transparency will inform better decisions
• Network access • Distribution DER assets
capability
• Measure and monetise the locational and diurnal value (+/-) of DER in the system
• Realign the Utility and Consumer interests through shared benefits
• Convert tariffs from Energy to Power based
• Understand the Consumer • Simplify and personalise
the offering
Cure the Tariff Disorder
Breaking the Gridlock
Craft a Demand Si
de
Energy M
arket (DSE
M)
Whole of S
ystem Planning
Transparency is the new green
Conclusion – transitioning beyond integration…
• Existing frameworks assume a linear supply chain from a central source. However as RE & DER increase the traditional market demand for electricity will approach zero or negative requiring systemic change.
• Regulations currently limit economic outcomes for the consumers and significant policy and regulatory uncertainty limits efficient technology innovation and the progress to smarter grid functionality.
• Develop an understanding the real value (+/-) of DER rethink traditional structures to enable a grid of things.
• Data is one answer to being smarter…. • Bringing this transition to fruition will require participation,
dialogue, and collaboration among all stakeholders but the market want solve this alone.
