Customer energy resources have an important role to play in supporting the energy transition. However, SA Power Networks CEO, Andrew Bills, says that more can be done to take advantage of the potential these resources have to offer.
At the 2023 Future Energy Conference in Adelaide, SA Power Networks CEO, Andrew Bills, said that while more large-scale generation, storage and transmission is needed to support our energy transition, there is not enough attention being paid to the massive opportunity presented by customer energy resources embedded in the distribution network. Here, Mr Bills elaborates on these thoughts and discusses the future of energy.
The future of energy is here
AB: I have a vision for a sustainable and sovereign Australian economy with new industry and prosperity driven by cheap and renewably sourced energy. A future where all energy consumers share the benefits at home and at work.
Householders not only will rely on smart energy management systems to ensure that they are using energy when it is cheaper (or even free), their homes will also be airtight, insulated, comfortable and healthy, with minimal heating and cooling required.
It’s a future where people are not worried about their next electricity bill but potentially looking forward to a credit from energy generated on their roof, stored in a home or vehicle battery, and sold back into the grid at times of peak demand.
Already today we have customers living this future of energy. They have invested in rooftop solar and an electric vehicle with a smart two-way charger and are trading successfully into the national electricity market via innovative retailer offers. While there are currently only a few, there was a first steam engine user, and a first mobile phone user.
My view is that in some ways Australians have not understood the fundamental shift that is underway in energy and, for those that do, many do not have the means to get more involved. It’s a shift that cannot be achieved without significant investment, disruption for industry, worry for government and uncertainty for consumers, but it is a chance that as a nation we are taking because of the pressing challenges being posed by the heating of our planet.
The opportunity presented by the challenge
AB: The challenge for this future energy model is to ensure that we minimise the disruption caused in what is an energy revolution; that we maintain reliable and secure energy supply; that we ensure energy is affordable; and that we do everything we can to ensure that everyone benefits from the change.
We can deliver on the so-called “trilemma” of reliable, secure, and affordable energy, but there will be bumps on the road to get there. At SA Power Networks we believe one of those bumps is not having a clear transition plan. A target of net 100 per cent renewables is not a plan, it’s a target. How we get there in a stable, orderly, and efficient way and ensure that we meet our objectives is not clear.
As such, a key aspect of SA Power Networks’ submission to the South Australian Government’s Green Paper on the Energy Transition in 2023, was the critical need for an integrated energy plan that can manage state-based risks while still accounting for NEM-level planning and progress. The South Australian Government has acknowledged that need.
As a basic principle, investment decisions in South Australia’s homes and businesses behind the meter will impact the level of investment needed on the supply side. Our hope is that the proposed creation of a planning and forecasting function in government will help in better harmonising both aspects of our energy system.
In South Australia, we now have more than 37 per cent of customers (about 350,000) with solar, with a total installed capacity of almost 2.2GW – more than sufficient to regularly meet the state’s electricity needs in the middle of mild sunny days. We also have about 35,000 home batteries installed.
Electric vehicles (EVs) are the next big thing influencing energy outcomes. They have three to ten times the storage capacity of home batteries and are a great opportunity to utilise abundant renewable energy. We can kill two birds with one stone when it comes to EVs with cheaper transport and cheaper total energy bills for households.
Electricity is much cheaper for running a vehicle than petrol/diesel, and indicatively we believe that the average household could halve their total energy spend from about $4,500 to about $2,400 per annum by switching to an EV.
We also can accelerate our energy transition and ensure that more benefits flow to consumers more quickly by addressing the barriers to consumer investment in behind-the-meter smarts and technology that can deliver immediate energy bill benefits.
We believe while the focus on more generation, more storage and more transmission is essential to the transition, we also should be directing much greater government and industry focus to demand-side opportunities. For many customers, investing in energy management systems, solar, home batteries and/or electric vehicles is out of reach.
Targeted financial assistance to help consumers make this shift will bring direct benefits in reduced energy bills – something that won’t immediately happen with investment on the supply side, which in fact will drive up prices in the short term.
Assistance also should be targeted at tackling our substandard housing stock. There is plentiful evidence to demonstrate that energy reduction measures for houses pay off in just a few years and reduce the cost of ownership overall by significantly reducing household energy bills.
We believe there is a need to move urgently on efficiency standards to ensure that all existing housing stock, as well as new housing, is highly energy efficient. This will deliver an immediate energy cost benefit to consumers and help reduce heating and cooling impacts on energy demand. If planned well, it could also be a significant economic stimulus.
The vital role of the network in the future of energy
AB: With EV sales now reaching a tipping point, we are going to move more rapidly toward the electricity network’s additional role of being the primary fuel source for transport.
The good news is that there is tremendous spare capacity in the distribution network to substantially meet demand from EVs and avoid the need for larger-scale network upgrades ultimately paid by consumers.
Unlocking this spare capacity will need a mix of incentives to ensure we use as much electricity as possible in daylight hours to take advantage of low-cost rooftop solar energy; utilising smart energy management systems that look for the best outcome for customers and respond to network signals; ensuring vehicle charging is diversified; ensuring our homes and businesses are energy efficient; and helping customers understand how their energy use impacts their energy costs.
So how will the distribution network of the future look to support this change? The key features chart (Figure 1) shows the significant change in the way the distribution network will need to be optimised to support our future energy vision.
The system is complex with high levels of collaboration required from various players including customers and networks to manage multiple flows of energy. We are leading the way with innovative network tariffs, our Flexible Exports option for solar, and investment in information technology systems to help deliver this dynamic relationship between our network and customers.
In the long run, I believe the future of energy is one that is more democratic, where customers have greater control over how they make, use and share energy and that they see energy companies as partners in achieving their goals. With the right settings we can have a reliable, cheap and clean energy system that works for customers, drives new industry and commerce and which improves environmental and health outcomes for all.
