- Virtual Power Plants
- Distributed Energy Resources Management
- solar PV
- Rooftop Solar
- Australia
Australia Is an Innovation Hotspot, but DER Markets Still Need Work
Australia has been a global leader of distributed energy resource (DER) platforms such as remote microgrids for decades, especially in western Australia. The country is shifting its focus to the technologies necessary to manage grid-connected DER (such as rooftop solar PV). It is also making real the value proposition that its prosumers will realize greater benefits staying connected to the network rather than abandoning the grid altogether. Australia is a focal point of innovation thanks to its recent power outages and high energy prices. It also has some of the highest penetrations of distributed solar PV in the world.
Guidehouse Insights views Australia as a global incubator where DER opportunities from creative aggregations via virtual power plants (VPPs) and DER management systems (DERMSs) can be tested, validated, and commercialized. Case in point: AGL Energy (AGL), the largest retailer of electricity in the National Energy Market (NEM), is moving beyond a groundbreaking VPP pilot program. Although Australia touts a highly deregulated market, more work is required to fully value the network services that DER assets can bring to NEM. This value can only be realized if DER are managed creatively through VPPs and DERMS platforms by fully valuing both voltage and frequency balancing services.
Standards or Markets: What Is the Best Route to Monetization?
A recent study by the University of New South Wales determined that 95% of network voltages are out of the allowable range across all jurisdictions in Australia. The study also concluded that new solutions are required to bring voltages down to accommodate bidirectional energy movement, enabling higher penetrations of DER in Australia’s distribution networks. Higher voltages limit the operational power band in which DER assets can operate. This limit is due to power quality response modes that are mandated in all grid-connected inverter systems in Australia. When these inverter modes are active, high voltage triggers a reactive power response from inverters, limiting their real power output. This response essentially provides an unrewarded distribution network service while reducing these systems’ ability to create value in the wholesale market.
It is issues like these that can have major impacts on decarbonization strategies and the evolution of energy markets, which Guidehouse has dubbed the Energy Cloud. With right-sized VPP market incentives, real-time DER asset orchestration can provide valuable grid services to distribution networks. Standards are key to development of new technologies and platforms, with direct current distribution networks being a great example. But if imposed too soon or for too long, they can stifle innovation.
From VPP to DERMS
Almost 25% of homes located within AGL’s service territory feature rooftop solar PV systems, illustrating the scope of potential assets available to include in VPPs. AGL’s journey started with a 1,000 home VPP in Adelaide, which the retailer is now looking to expand.
AGL engaged in several tests to validate the value VPPs could provide if more targeted services were provided by only a fraction of grid-connected inverters (for which these consumers are rewarded financially). These tests imagined a scenario where there was a market for network services—and that those services were valued by networks—so that revenue from providing those services could be shared with consumers as a reward. Using Generac Grid Service’s Concerto platform, AGL demonstrated that a fleet of behind-the-meter batteries (60 batteries with 300 kW of capacity) were able to, in aggregate, manage peak demand on the system while limiting real and reactive power. In short, a DERMS application was validated. More details can be found in a newly published case study.