Future consumer value from Distributed Energy Resources (DER)

4 min

The last decade has seen a massive proliferation of residential solar photovoltaic (PV) systems in Australia, going from less than 100,000 customers a decade ago to more than 2.2 million today. This widespread embrace of such important energy technologies, in addition to our complementary natural resources, puts Australia’s energy sector in an enviable international position.

The generation capacity of the 2.2 million rooftop solar PV systems on Australian homes and businesses makes up over 10 per cent of total generation capacity of the National Electricity Market (NEM) and produces 9 times the generation capacity of the country’s largest power station.

However, these small-scale generators are causing new challenges to the reliability and security of the grid, from the local ‘poles and wires’ networks, right through to the national power system.

AEMO recently released its Renewable Integration Study highlighting that Australia has the technical capability to operate its power system with at times up to 75 per cent  of renewable energy, if recommended actions are implemented well ahead of 2025.

These actions include elements of the Energy Security Board’s (ESB) Market 2025 reform program, investing in critical transmission resources identified in AEMO’s Integration System Plan, and importantly, introducing standards to maximise the potential contribution of distributed solar PV.

For more than a year, AEMO’s DER Program, specifically the DER standards and operations streams, have also been considering and engaging on performance standards for solar inverters and collaborating with industry to develop new standards to improve their capability in-line with international best practices.

What we’ve found is that, in very unique and extreme circumstances in an increasing number of regions, there may be times where there is so much rooftop solar energy in the system, that combined with extremely low demand (for example a mild Spring weekend) and rare system events like an interconnector outage, additional risks to the system will arise. In truly extreme circumstances, the system may go black if emergency controls are not available.

Supplying the energy needs of homes and businesses from distributed solar PV minimises the electricity demand left to keep the generators that currently supply essential system services (inertia, frequency and voltage control) running.  So, an emergency backstop may be required for distribution businesses to dial down or turn off household solar PV to maintain power system security. The alternative is limits on solar PV installation may need to be considered.

While there are complementary solutions that can be pursued to reduce the likelihood of such rare events occurring – for example the increased uptake of distributed battery storage or the shifting of hot water loads to soak up excess solar generation in the middle of the day – there is still a residual need for emergency controls to ensure the security of the power system.

The inclusion of this backstop capability will enable existing and future solar PV system owners to continue enjoying the full benefits of their own solar systems on a day-day basis, whilst ensuring that in extreme abnormal system conditions electricity supplies will not be unnecessarily jeopardised.

Future changes to inverter capabilities will allow consumers the option to gain additional value from their solar PV system. Interoperability of DER is what we’re talking about and it means consumers can earn extra revenue by responding to the needs of the power system or to engage in potential future markets such as peer-to-peer energy trading. With the right capabilities we can avoid black outs and increase savings, at the lowest cost to consumers.

At the request of the federal and state governments, AEMO, in collaboration with the Energy Security Board, recently submitted a rule change request to the Australian Energy Market Commission (AEMC) to introduce uniform technical standards for distributed energy resources (DER), including residential solar PV. These standards would apply to new inverters and would not apply retrospectively.

Ultimately, consistent national standards will allow more rooftop solar PV and DER to be installed by helping to better integrate this fleet within the power system. This will help contribute to a more efficient supply mix and grid, leading to a more affordable energy supply along with an increase in free-fuel renewable energy systems.

The cost to transition to ‘smart’ inverters is expected to be minimal, as they are readily available (manufacturers are currently certifying their devices to comparable international standards) and often installed with simple software upgrades. 

With rooftop solar panels being installed every 6.5 minutes in Australia, now is the time to ensure we manage potential issues and harness future value for consumers investing in distributed resources and all energy users with an efficient and secure electricity system.

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