How Australia’s energy retailers can keep pace with the renewables boom

Solar panels on roof (Australia renewables))
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Despite leading the world in the amount of solar panels, Australia lags behind when it comes to actually harnessing that energy for the benefit of energy consumers and the environment, writes Flux Federation chief client officer Jessica Venning-Bryan.

The Intergovernmental Panel on Climate Change (IPCC) report released in August is the latest reminder that Australia needs to do better at curbing its greenhouse gas emissions. It can be easy to assume that Australia’s progress on sustainability is ahead of our international peers given the explosion in popularity of rooftop solar panels, which reached 2.7 million residences in 2021. Despite leading the world in the amount of solar panels, Australia lags behind when it comes to actually harnessing that energy for the benefit of energy consumers and the environment.

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Australia generates about 15 tonnes of carbon dioxide per person each year, which is about the same ratio as the United States of America, which has about 13 times the population. One of the reasons for this is our reliance on coal, which generates more than 60 percent of electricity in Australia. Non-fossil fuels sources provide just 20 percent of our electricity despite more solar power being generated than our largest scheduled generator.

The slow adoption of renewable energy isn’t because of lack of enthusiasm, it has more to do with the inability of our national energy grid to cope with the influx of DERs (distributed energy resources), and the lack of technology supporting energy retailers to be able to navigate the complexities of selling and billing for DERs.

DERs, also known as ‘behind-the-meter generators’, refer to any energy units or systems located within a residence or business. Solar panels are the most popular DERs in Australia, but they also include renewable energy generators like wind, battery storage technology, electric vehicles and chargers, and more. It’s estimated that DERs could contribute up to 45 per cent of Australia’s electricity by 2050. DERs not only benefit the environment, they can save money for energy consumers generating their own power, as well as giving them autonomy over their own energy usage.

Unfortunately, the energy grid wasn’t built to sustain the amount of energy generators we have today. Traditional energy grids were created with the assumption that a small number of large centralised generators with consistent output would power the country, rather than millions of smaller, distributed generators with dynamic output. This is far from today’s scenario, which requires data, systems, processes, technical capabilities and probably regulations to integrate a DER into the grid. This poses a challenge to energy retailers that have been forced to re-examine how they sell and procure energy alongside DERs. What’s more, DERs have the ability to sell back excess energy they produce back to the grid, further complicating the billing cycle.

There’s also been criticism of renewable energy, including from Australian politicians, that it doesn’t offer the same reliability and resilience as an energy grid dominated by fossil fuels. However, a diverse mix of DERs, not just one form of technology, will actually shore up the grid’s resilience due to their ability to balance peaks and troughs of energy use to mitigate downtime on the network.

Energy retailers may feel like they’ve been left behind as DERs become more popular if they don’t resolve these challenges, which they can do through the application of technology. Just as the energy grid isn’t fit for the influx of DERs, neither are the software platforms that retailers rely on to do business. Traditional energy retail platforms don’t offer the flexibility needed with a mixed energy grid, slowing down retailers from developing new products and innovations for customers. 

Retailers need a platform that can dynamically respond to changes in the energy grid, allowing them to rapidly and automatically bill any tariff and price any plan. By processing any interval data it receives, a future-ready energy retail platform can check connections against price plans and apply relevant charges to generate a bill for the customer. Energy retailers can also bring down acquisition costs while continuing to add value for customers by taking an API-based approach, allowing retailers to integrate data and products without the hassles typically associated with integration.

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Australia should be proud of its progress in rolling out DERs across the country. However, if we continue neglecting our ageing energy infrastructure, we won’t see the benefits of this progress until it’s too late for the environment. We should be doing everything as a nation to support DERs not just with installations, but with the infrastructure that supports it, policies that dictate how the grid operates, and the retailers that bridge the gap between energy generation and consumption.

Software is the golden thread that ties these together and the sooner it becomes an entrenched part of Australia’s journey to a renewable future, the sooner our abundance of renewable energy will maximise its potential.