Boom in distributed generation triggers big issues for network voltage control
EXCITING OPPORTUNITIES FOR FUNDAMENTALS IN AUSTRALIA’S FAST-CHANGING ELECTRICITY INDUSTRY
As Fundamentals Australia Pty Ltd opens for business in Sydney, MD Jon Hiscock gives an insider briefing on some of the exciting business opportunities for the Fundamentals Group in Australia’s dramatically changing electricity industry.
Fast-changing? Distributed generation in Australia is powering ahead so quickly that solar photovoltaics (PV) are expected to rise from around 3% to 23% of all Australian electricity generated by 2025. Throw in wind and other renewables and parts of the country will hit 30% renewables within seven years.
At the same time domestic rooftop PV is rocketing (126MW installed in June alone, with 1.6 million users), commercial and industrial solar farm projects are getting bigger and more numerous every month.
Australia’s biggest solar farm to date, the 124MW installation at the Sun Metals zinc refinery in north Queensland, is about to start commissioning. It will be overtaken when the Whyalla steelworks completes its 1GW solar and storage installation. And farms of 5 to 100+ MW are popping up all over the country. Total installed new solar in 2018 is expected to top 3GW.
EA Technology Consultant Martin Hunt believes the solar boom is the biggest opportunity for Fundamentals’ voltage control technologies: “Basically the DNSPs are looking for anything that can help them manage the inevitable voltage issues that are on their way. At the moment they can’t easily predict where they might have those issues arising.”
Or as the industry organisation Energy Networks Australia (ENA) says: "Parts of our networks already can't handle any more solar and as many of the early adopters also install batteries and buy electric vehicles, we will see major electricity flows that reverse in a millisecond, causing major problems.”
"After more than a century, we are changing from a centralized, one-way flow of electricity to the consumer, to a decentralised system where many households feed power back into the grid.”
The ENA has released the first in a suite of guidelines for network companies, with the aim of establishing uniformity around voltage, legal frameworks and technical standards. It is consulting widely, but according to EA Technology’s Neil Davies, the development of regulatory frameworks and guidelines is running behind the game. Network service providers need solutions now.
Electricity network owners face two more giant challenges. One is financial, the other an unprecedented change in their roles and responsibilities.
The Australian Energy Regulator has successively cut both cost of capital and allowable rates of return for utilities, culminating in a proposed drop of 13% over the next five years. Cue howls of complaint from Energy Networks Australia that their transmission and distribution network members cannot pull off ‘the most significant transformation in a century’ when returns on investment are falling.
Simultaneously, members are having to add new services on top of the conventional Distribution Network Service Provider (DNSP) model of delivering power sourced from baseload generation via transmission networks to passive consumers, to encompass integration of an array of distributed energy resources, embedded microgrids, and demand side management initiatives.
But many DNSPs are seeing significant changes in network load profiles and loss of controllable loads. Customers are not sufficiently incentivised by strong pricing signals to deter them from using electricity at peak times. Hot water, air conditioning and pool pumps are controllable domestic loads. In Queensland, for example, consumer tariffs are higher than those for feed-in, so customers may choose to run these high demand services during the day, when their solar panels are producing. This can create a localised network voltage stability problem if a cloud passes overhead and the solar contribution is rapidly and significantly reduced.
The factors above combine to put enormous pressures on operators to do more with less money, sweat existing assets and ‘go for what works’ to cope with changes that are rapidly being forced upon them - including voltage control challenges. Australian companies are much happier than their UK counterparts to trial new technologies without waiting for detailed guidelines to be handed down to them. This is clearly an opportunity tailor-made for Fundamentals to grasp.
The business case for investing in new kit continues to get harder, but it’s all down to cost-benefit analysis: How much value for customers and network operators do you unlock by solving voltage issues? The net present value (NPV) of a proposed investment or project is calculated to help assess the financial viability. If the analysis reveals a positive NPV then it becomes an approved project.
At present, the solutions typically being proposed to manage unpredictable voltages are:
- Curtailable generation (i.e. PV which the DNSP can disconnect or reduce as required)
- Expensive LV telemetry (i.e. monitor the LV network voltage at all distribution transformers)
- PV limitations (designate a maximum allowable LV feeder PV penetration and reject all further applications from customers)
- Battery storage and VPPs (Virtual Power Plants) - see below
BATTERIES & WIND
Battery storage is very big news in Australia at grid scale, and is on the rise at the domestic and commercial level. Many domestic PV owners are considering home storage options because the previously highly favourable gross feed-in tariffs for solar generation have been largely removed. Unless they can run high-demand appliances during the day when the sun is shining but homes are typically lightly populated, there is an increasingly compelling economic driver to store that substantial daytime energy to use during the evening peak when time-of-use tariffs are high.
The uptake of industrial-scale storage is arguably an even greater game-changer, with as-yet unknown implications for distribution network voltage management as industrial users seek to take advantage of optimal tariff rates across the day.
The world's biggest lithium-ion battery built by Elon Musk's Tesla company last year, has been installed in South Australia's mid-north Hornsdale Power Reserve. Hooked up to a giant wind farm, it has a storage capacity of 129MWh, is capable of charging at 80 megawatts - and it can discharge at 100 megawatts with a response time of milliseconds. It has already taken part in the FCAS market and demonstrated that it is more than a match for conventional frequency response backup sources, financially as well as in terms of efficiency and effectiveness. More mega-batteries are scheduled, further strengthening the stability of the network.
Wind power has long been established in Australia, and continues to build as a significant grid-scale energy resource, but one with significant dispatchability challenges. 30% of the aforementioned Tesla battery is intended for use as a commercially available energy battery in the NEM, such as to provide firming for the intermittent wind energy supply from the adjacent Hornsdale reserve.
Grid-scale batteries such as the Tesla installation are less immediately impactful on distribution voltage, as they are connected to the transmission network and are operating at the heart of the HV network power/voltage stability challenge. VPPs (virtual power plants), on the other hand, are aggregations of customer-owned batteries and solar PV arrays connected at the low voltage end of the network, and are much more likely to cause network voltage issues at the edge of the network. VPPs are likely to have an even greater impact as their scale grows – for example when commercial and industrial premises start to participate in this nascent market.
Electric vehicles (EVs) have modest penetration at present, in a country with limited government incentives, vast distances and a culture of big-engined SUVs and trucks. But EVs are a political issue in Australia and the situation could change quite quickly. The Australian government has a track record of drastic intervention and could, he believes, change its policy and introduce major incentives at a stroke. As petrol prices begin their inevitable ascent, more consumers will be likely to make a financial decision to own EVs. Penetration could also spike precipitously as manufacturers begin to create surpluses that cannot be sold in other countries. EV charging stations have been quietly increasing in numbers, and recently an EV was able to make a journey around the entirety of Australia, at a fraction of the cost of a petrol equivalent. Range anxiety is becoming a thing of the past, and the economics are increasingly persuasive. There is significant and escalating change afoot, and it impacts the grid operators in ways which are likely to destabilise voltage in complex ways. Extensively augmenting the network to cope with the highly variable extremes is not an economically rational response, smart technology to control the variability offers a much more practical, timely, and cost-effective way forward.
So, what’s the bottom line for Fundamentals? Australia needs voltage control solutions to help networks adapt to the ongoing revolution in distributed generation and storage. It needs a compelling business and technical case for buying them. And it needs them now.
Fundamentals provides products and services for the health and performance of the power grid. Based in the UK and Australia, the Fundamentals Group was originally founded on its game-changing range of TAPP and SuperTAPP (Transformer Automatic Paralleling Package) voltage control products and now includes a range of solutions including Ferranti Tapchangers and the Pacific Volt LV Regulator.
You can contact our Fundamentals Austrlain team by clicking here.
We are indebted to our colleagues from power network experts EA Technology in Australia and the UK (www.eatechnology.com) for generously sharing their knowledge of this dynamic new market: Neil Davies, Managing Director of EA Technology Australia, Mark Sprawson, EA Technology Group’s Head of Network Strategy and Transformation and Consultant Martin Hunt.