Half of Aussie electricity demand will be met by small-scale solar & batteries: BNEF

Australia’s rooftop solar homes and businesses will not just be generating up to half of the country’s electricity needs in the future, but could play a key role in meeting peak demand and keeping the grid stable.

Bloomberg New Energy Finance senior analyst Kobad Bhavnagri believes Australia’s energy system is set for radical change at a pace that may take the breath away – at least from the current crop of policy makers and regulators.

By 2040, Bhavnagri suggests, renewable energy will account for 70 per cent of all electricity demand. This reflects a global trend driven by technology and economics, with policy just a “stepping stone” along the way.

Bhavnagri says there is simply too much risk – to reputation, markets, and the environment – for any new coal-fired power stations to be built. And wind and solar will also be cheaper than gas, even with low oil prices.

Bhavnagri suggests that forecast solar prices will also be wound back significantly in an updated technology cost report to be released at the end of May.

But the biggest change will occur “behind the meter”, in homes and businesses. Up to 50 per cent of all electricity will be generated behind the meter, simply because “end user” technologies will provide a cost of supply below that of the grid.

“This will provide more choice for consumers …. and will require a new array for services. Who provides these will be an evolving contest.”

And by 2040, the combined power of solar and storage could be providing the bulk of the “peak demand” needs, particularly in winter.

“All of that capacity that exists behind the meter has to be coordinated through some sort of mechanism or needs to be incentivised in some sort of capacity to be valuable to system.”

The alternative, he said, was to install a huge amount of redundancy in the system – such as gas peakers and centralised storage – which could be far more costly.

© 2016 Solar Choice Pty Ltd

Giles Parkinson