Unlocking the Power of Distributed Energy Resources (DER) in Australia
MEA has responded to consultations on implementing DER/CER and published a policy document outlining our vision of turning every home and business into an interconnected power station.
MEA has responded to many consultations regarding benefits implementing Distributed Energy Resources (DER), more recently it has been referred to Consumer Energy Resources (CER). In addressing this issue, MEA have published Distributed Energy Resources (DER) Policy a high-level policy document outlining our vision of turning every home and business in the country into an interconnected power station. By doing this, we will be relieving the need to invest in as many mega generation and transmission projects and utilising the existing infrastructure (existing poles and wires in our cities and towns) that the community have cumulatively paid for over the last century.
What is DER?
Examples of DER include:
- Roof top solar photovoltaic units
- Wind generating units
- Battery storage
- Electric vehicle batteries
DER provides consumers with the ability to take control over DER assets and the ability for domestic and commercial and industrial (C&I) customers to enter into trading arrangements that could shift loads, using power (soaking) when it is cheapest for flexible loads (hot water, ovens, EV charging, etc) and delivering power back (sourcing) from storage sources (batteries, bi-directional EV’s) when energy prices are higher, giving households and businesses the ability to pro-actively reduce their overall power costs.
As an example, EVs and home batteries could be all four (flexible load, fixed load, generation, and local storage) in a single day, requiring different pricing to incentivise the most efficient use of the assets. This could be difficult to achieve with one settlement point.
The dream of changing the energy demand curve (the so called “ducks back”), taking the excess/cheap energy produced in the middle of the day, and using it during times of peak demand, thereby flattening the demand curve and stabilizing electricity prices can be realised in a reasonably short time period if we make some rational, sensible decisions. The technology is here now, the regulations just need to catch up, and the workforce of electrical businesses across the country stand ready to make it happen.
Unlocking Benefits of DER
To fully optimise DER’s benefits there needs to be separate identification and measurement of flexible energy loads which requires access to secondary settlement points on household and business premises. To achieve this, the AEMO needs to update its rules allowing for secondary settlement points with their own meter. Without such changes, consumers will not realise the full benefit of DER thereby reducing incentive for consumers investment into private infrastructure.
Secondary settlement points will allow both domestic and C&I consumers to gain control over the utilisation, storage and sale of surplus flexible energy allowing cost saving benefits. It is important that secondary settlement points are to be used strictly for DER energy while necessities such as lights, fridges, general power circuits, water pumps and life-support are to remain with the primary settlement point controlling the passive load.
Time of Use Tariffs
Ideally, DER will operate with flexible demand driven time of use and generation tariffs (TOU) for flexible loads and generation export. Such tariffs will be the primary driver in altering consumer behaviour towards saving, utilising, and supplying energy.
When prices are lower during the day, consumers can store flexible energy. This gives consumers the opportunity to sell energy back to the power grid at night when prices are higher and receive a financial reward in return.
Private Asset Maintenance
Consumers receiving Feed in Tariffs (TIF) should bear responsibility for ensuring the system is maintained to a minimum standard of safety and reliability.
Solar PV
Solar PV is increasingly popular in the Australian market, achieving the highest penetrations of rates in rooftop solar in the world. Policies should reflect this by integrating existing and new solar installations with home batteries and EV charging requirements, targeting subsidies and incentives to drive consumer behaviour to enhance DER implementation.
Electric Vehicles (EVs)
The anticipated increase in uptake of EVs is going to put pressure on the stability of the grid as demand increases to charge our vehicles. Bi-directional charging for EVs is the solution to this, which would provide the benefit of both a soak load for periods of daytime oversupply and a reservoir of dispatchable power during periods of undersupply. Bi-directional EV charging will assist in stabilising the grid. We are advocating to see Government policies reflect this.
Regulation
To ensure a nationally even adoption of secondary settlements, the AEMO should adapt current rules to provide specific instructions for their installation. There needs to be a national adoption of the rules otherwise DER benefits will not be fully realised across Australia.
Financially Responsible Market Players (FRMPs)
The AEMO has recently proposed an option called the ‘FTM2 Model’ which would allow for consumers to use multiple FRMPs at their premises through secondary settlement points. The Commission has rejected such option for small consumers but is considering actioning this for large consumers as there is less risk to consumer protection for this group.
MEA has urged the Commission to amend AEMO rules to a version that promotes increased consumer choice for their flexible energy. This is essential for unlocking the full benefits of DER, efficiently using the wasted rooftop PV in the system, and reducing the need for investment in expensive publicly funded transmission infrastructure. The current environment in which retailers are operating does not in any way incentivize them or exert any pressure to implement such innovations, despite regulatory expectations and policy announcements. Without such pressures, consumers will not fully benefit from DER.
Electrical Workers
Ideally, licenced and trained electrical workers under the supervision of licensed electrical contractors should be allowed to install secondary settlement points and digital smart meters as Authorised Service Providers (ASPs) on behalf of retailers.
Electrical contractors with a cert 4 and a CEC Accreditation should be used for Solar PV installation.
MEA advocates for mandated inspections of grid connected solar and battery systems receiving a FIT by licenced electrical workers every 5 five years. Costs can be recovered through consumers’ electricity bills organised by the retailer.
There is a skilled and existing workforce that could fill this gap rapidly. Licensed electrical contractors with minimal training could become Authorised Service Providers (ASPs) to replace existing meters with “smart meters”. This would reduce connections times, improve consumer experience, reduce smart-meter roll out costs and help facilitate a swifter transition to a responsive electricity grid that can take advantage of DER opportunities.
