By Patrick Matweew, CEO, Redback Technologies
There’s a massive transition happening in the energy sector. We’re in the midst of the biggest change to how we generate and distribute electricity in more than 100 years. The key drivers for this change are the falling cost of renewable energy resources – solar PV in particular – and the need to decarbonise our way of life in response to climate change.
In Australia and in many other countries this has led to a huge percentage of households investing in their own, roof-top PV systems. We now have thousands of small-scale distributed energy generators entering the market and sending PV generated electricity into the grid during the daytime.
In Australia, this deployment of residential PV is being done independently by homeowners without overarching national plan or guidelines. More than 20 per cent of all households in Australia having installed their own small PV system.
This rise in residential solar installations is having an impact beyond the household level, putting pressure on other market participants to accommodate the change. Networks feel the impact of the shift first – on their infrastructure. Then the energy retailers, as their business model comes under pressure as fewer people buy fewer electrons from them.
While the overall move towards a greener Australia is positive, a major challenge at present is that key stakeholders now don’t know what’s exactly going on in the network. Amid this surge in independent energy generation, no one really knows what kind of systems are connected to the network, no one can exactly forecast how much electricity these systems export to the grid and how much the households will consume and at what time in the day.
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Managing the network and keeping it safe and reliable for everyone is very difficult under these circumstances. It becomes harder to know how many more PV systems can be connected to a certain part of the network before it becomes overloaded or unsafe to operate, or before upgrades are needed.
Electricity network operators are especially challenged. They are responsible for managing the flow of electricity through their infrastructure and ensure that market participants can effectively and safely transact their commodity: electricity. They need to know what’s going on in their infrastructure in real time in order to ensure they are ready for what’s happening. Instead, they are having to manage a hugely complex transition project at a massive scale with enormous risk, uncertainty and little to no visibility.
If the energy transition that is now underway is going to be safe and reliable we need to create transparency about what is going on, aligning diverse interests – consumers, networks, retailers, market operators and government. Stakeholders need a single point of truth that creates trust and enables effective collaboration. This can only be derived from real time network data that delivers visibility and transparency.
By deploying new, smart technology into the grid that collects real-time data we can achieve two things and start to ensure the stability and reliability of the grid. First, this smart technology gives network operators the visibility that enables informed decisions on investments and maintenance, allowing more careful management of network costs. They can keep their assets operating safely and reliably, meeting service obligations and exceeding customer expectations.
Second, and just as important as data access, is the ability to use such data to build better services and unlock additional value. Network operators and forward-thinking energy retailers can use the available data to start to engage with consumers in novel ways. In this way, they can become energy service providers in a truer sense while adapting their business to the changing realities of the energy market.
Access to consumers and active consumer engagement will be the success factors for a new breed of energy retailers. Retailers who not only collect data from monitoring devices and smart meters but also look at homeowners’ rooftop solar PV as smart assets that can be connected and aggregated into fleets in collaboration with their customers will be best suited to thrive in the future.
A few hundred solar PV and battery storage systems combined into a fleet by a professional aggregator can offer services to the energy markets that a single residential system cannot. Isolated residential PV systems will be able to work together to become virtual power plants. This aggregation can be done via internet services and secure cloud infrastructure.
Real-time data is the basis for the next steps in developing the energy market of the future that is based on 100 per cent renewable energy, flexibility and automated real-time decision making and optimisation.
If we use technology that is already available today to connect the market participants around a single point of truth based on data, then we can build a reliable and affordable energy system for all Australians – an energy system based on our abundant, cheap, clean, green energy resources.