The comments of 2 network company heads reveal just how close parts of regional Australia are to a paradigm shift. Both Ian McLeod of Queensland’s Ergon Energy and Rob Stobbe of SA Power Networks see big changes in store for the electricity industry regions under their respective jurisdictions.
Interviewed by RenewEconomy’s Giles Parkinson at the Energy Networks Association conference in Melbourne this week, Mr McLeod and Mr Stobbe both spoke matter-of-factly about the issues facing their networks how they these issues may be addressed. The areas covered by their networks are characterised by sparse populations spread across large areas, making conventional approaches–extensive networks of ‘poles & wires’ delivering power from large, centralised power generation plants–a less-than-ideal fit and increasingly untenable.
The alternative approaches that SA Power Networks and Ergon Energy are talking about implementing will undoubtedly differ in execution, but will be similar in essence. Both will deemphasise investment in centralised electricity generation and the ‘poles & wires’ that deliver electricity . Meanwhile, reliance on self-generated power and energy storage will grow in both areas.
In the case of Ergon, it seems clear that energy storage will play a key role, with the network currently devising a target for energy storage capacity–similar in essence to the one introduced by California, but smaller in scale. The dominating issue on the Ergon grid is the high price of electricity, driven by the requirement that the government-controlled company deliver electricity to all of its customers at the same rate–despite the fact that some customers may be extremely remote and require heavy infrastructure investments to service (the average number of customers per kilometer of wire is apparently less than 5). In light of this, Mr McLeod sees his company’s task as improving the efficiency of the system as a whole.
With the price of distributed solar power lower than ever–and energy storage not far behind–Mr McLeod recognises that it may be an option for many of the network’s customers to defect from the grid rather than pay ever-ballooning electricity bills. He says that this is unlikely, however: “Most people want to be passive on energy use – they don’t want to be worried about batteries, or the fact that the sun hasn’t shone”. In order to ensure affordability for its customers, Ergon could counter this by investing in distributed energy storage itself in order to add strength to parts of the grid where infrastructure is currently ‘thin’ and customers are subject to blackouts more often than those in urban areas.
Meanwhile, South Australia could see its regional communities begin to develop their own micro-grids to combat rising price pressures, generating and managing their own power with only a small connection to the main grid for backup power. Currently, 70% of SP Ausnet’s infrastructure investment goes to servicing only 30% of its customer base. The network company would step back from its current role as a holder of most of the network’s assets. That South Australian communities could step up their energy is not unthinkable in the state, where 20% of homes already have a solar system installed.
“When it comes to reliability, these alternatives like renewables, going into storage, is actually more reliable than what we can even provide,” Mr Stobbe said. “As long as we can top up their storage, it is actually quite a reliable supply. If you look at where it is going to occur first, in my view, I will be in those rural areas.”
He also suggested that the company’s role could shrink back from operating one expansive grid to operating multiple smaller ones. “We might just be operating, managing and building micro-grids, in localised area, with their own renewables on site, and some of their other renewable that could support that community. Why wouldn’t that work? Why would they have to be connected to a central connection point? You can see it happening.”
The comments of these two men confirm the idea held by many that change in the electricity industry will start first at the grid’s edge, where solar PV is already a disruptive force. And the changes look likely to manifest themselves by the end of this decade.
© 2014 Solar Choice Pty Ltd
