Solar Battery Storage could rise 10x – AEMO

The latest Electricity Statement of Opportunities by the Australian Energy Market Operator (AEMO) forecasts a potential 10x increase in solar battery storage uptake. The statement of operations is produced annually by AEMO and helps them plan for projected installation of solar panels, batteries, and their capacity as the technology increases and Australia continues its march towards our Renewable Energy Target for 2030.

Solar Battery Storage and the AEMO

Solar Battery Storage (source: AEMO/RenewEconomy)
Solar Battery Storage (source: AEMO/RenewEconomy)

AEMO’s 2017 Electricity Statement of Opportunities helps us project the next 10 years of energy generation and runs simulations for different scenarios (changes in solar battery technology or peak demand, for example). It’s worth reading the whole thing but here are some interesting tidbits we picked up around the place:

An interesting note that Renew Economy picked up on is that peak demand (with an average of around 3,700MW for the last ten years) was at its second lowest level since 2009 in 2017 – largely in thanks to the high numbers of rooftop solar systems installed throughout the country. Being able to manage peak demand means that infrastructure won’t be as expensive and we simply don’t need as much energy – so it’s a great result!

Cameron Parrotte, the boss of AEMO in Western Australia, discussed the situation and what it means for Aussies:

“While there have been recent retirements of some fossil-fueled generators, new renewable generation capacity is enabling the RCT to be met within the defined reliability standard, and with significantly lower excess capacity than historically recorded”

There’s also some great news for Western Australian solar power, where the grid includes a ‘capacity market’ – making it a bit different than the other states. The report projects that the current amount of live and committed generation resources will meet forecast peak demand in the state’s South West interconnected system (SWIS), despite around 400MW of coal, gas and diesel being replaced by approximately the same amount of rooftop solar, large-scale wind and large-scale solar. If you want to read more about the Wholesale Electricity Market in Western Australia please click here.

Some great news for Australia’s energy future. There’s no doubt that we’ll see more and higher capacity solar batteries installed in houses over the next ten years, let’s see how accurate those projections are!

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WA Electricity Grid Needs Upgrade For Solar

A leading energy export from the Australian Energy Market Operator has warned that the WA Electricity Grid requires upgrades over the next couple of years or else it risks being completely overwhelmed by the influx of solar in the state. 

The WA Electricity Grid & Solar

According to TheWest’s website, solar energy now makes up the majority of the WA Electricity Grid’s energy collection – representing around 700MW of capacity. They interviewed Cameron Parrotte, the head of strategy and innovation at the Australian Energy Market Operator – who noted that measures need to be put into place to manage the influx of solar into the grid before it starts to overload.  Parrotte said the amount of additional solar capacity is currently growing at 35% per year. 

“When you talk about comparison to other States, percentage-wise we are flying,” he said.

“Some people then say ‘you’ll start running out of roof space’.

“What you are tending to find is that some people who were the early adopters, some of their PVs are starting to reach the end of their life.

“Instead of putting up another 1kW to replace the 1kW they had, they’re putting in 5kW.”

Parrotte / The West said they believe solar power could fully displace conventional methods of energy generation (coal/gas fired plants) for short intervals within as few as five years. Initially, these intervals would be restricted to times when electricity demand is low (e.g. mild, sunny days in the middle of the day) but surely sends another message to those trying to delay the death of traditional electricity methods. It’s now up to providers and authorities to upgrade the grid and make sure it’s able to take the excess power solar will provide. 

We’ve previously written about blockchain powered P2P energy trading fintech platforms such as Power Ledger or WePower along with less technologically intense solutions such as community solar – the writing is on the wall here and it’s only a matter of time before renewable energy completely overtakes coal and gas fired plants, so it’s important the government act now to ensure the grid is capable of withstanding the new era of energy generation!

WA Electricity Grid - Sunwise - Ludlow Solar Installation
WA Electricity Grid – Sunwise – Ludlow Solar Installation (source: sunwiseenergy.com.au)

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Renewable Roadblock: The ‘Settlement Rule’ Power Companies Won’t Budge On

It’s probably not overly surprising that the transition to renewable energy involves myriad complex challenges (such as investigation of the ‘settlement rule’) – especially in the energy marketplace itself. Australia’s thermal power generators wield a lot of clout and their lobbyists have been working overtime to keep storage at bay for as long as possible, given the potential for lost profit it represents.

One of the core factors of the electricity market is a ‘settlement period’ – power generators bid to supply electricity in five minute blocks but their actual invoiced price is averaged out over 6 x blocks (30 minutes). This is set up to benefit coal and gas generators (they get a larger return over a longer period) – but batteries, which can be turned on and off at will without long/expensive startup times, are disadvantaged. Since the power companies have invested hundreds of millions on ‘gas peakers‘ (power plants that run ‘on demand’ i.e. in peak hours so they can command a premium price – as opposed to base load plants) they are, unsurprisingly, strongly motivated to get as much of a return on these as possible. Would changing the settlement rule move the goalposts and unfairly discriminate against these companies and the contracts they have already signed?

AEMO Investigate the Settlement Rule

Dr Tony Marxsen of the AEMO (Australian Energy Market Commission)  said earlier this week that the main challenge in changing the settlement rule is that it will “affect adversely the business model of investors in gas peaking plants” who have entered into contracts based on the current system. The AEMO have just extended a review into the situation (for the second time).

Dr Tony Marxsen of the AEMO (source: LinkedIn)
Dr Tony Marxsen of the AEMO (source: LinkedIn)

AEMO Logo

Zen Energy’s Richard Turner gave the example of 22.03.17 in Adelaide which had four 30 minute periods when, in the first five minutes (of the 30minute averaged period), the bid for wholesale electricity hit $14,000 / mWh – he noted that, ‘when those events happen, the big generators power up to meet that demand. Even if the price is negative in the final few minutes of that 30-minute window, the generators receive the average price for that 30 -minute period of, say, $2500.’

Turner said if there were ‘true’ five minute blocks (i.e. no 30 minute averages) ‘the battery would just come in, grab that demand and eliminate that pricing event’, rather than waiting for generators to ‘fire up and get going’.  With that said, there needs to be alternatives to the current crop of renewables for when there’s no sun or wind – how would changing these rules affect the marketplace and feasibility of running plants?  It’ll be interesting to see what the AEMO review finds and recommends as current technology dictates that we do need to find a common ground while renewable technology improves over the short-mid term.

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