There’s been a lot of talk about Australia’s energy future lately. In fact, the topic has managed to almost singlehandedly divide our Federal Government. The question at the heart of much of this divide is simply ‘can renewable energy be a viable alternative to fossil fuels?’ Setting aside the hyperbole, fear and misinformation – the answer is absolutely yes. Not only is it possible, it is happening.
The Sydney Morning Herald recently reported on how renewables and energy storage (batteries) will make 90% of Australia’s future energy mix. Small-scale solar, such as household solar, will account for the largest energy generation source in Australia. It is projected that solar power will be responsible for generating around 75 gigawatts of energy by 2050, wind power will account for around 48 gigawatts and battery storage capacity will increase to around 27 gigawatts. It is important to note that the majority of the battery-stored energy will be sourced from household solar and battery systems.
Although the progression of mass-scale renewables is inevitable, delays will result from politicising, funding limitations and competing priorities.
There are 2 main things that need to change, in order to ensure a swift and efficient transition to Australia’s clean energy future:
- Solar panels and batteries must be affordable for everyday Australian households – via innovative models like those offered by ShineHub
- The Australian Energy Regulator must change the rules to allow virtual power plants to operate to their fullest potential and enable community energy sharing
Virtual Power Plants
Currently, coal and gas supports the grid in peak times. Virtual power plants have the potential to change this, by allowing the grid to draw directly from household solar and battery systems. Virtual power plants are well established in Europe, but Australia continues to lag behind.
There are 8 potential services that virtual power plants can provide to the grid. In Australia, only 1-2 of these services are currently allowed, depending on the state and grid provider.
Across Europe, there are numerous virtual power plants that provide the complete suite of these 8 potential services. As a result, households fitted with solar and battery technology are benefiting significantly as the grid pays for the ability to access their batteries.
When virtual power plants operate to their fullest potential, the payment made to households from the grid can be as high as $600-$700 per year (as many European customers are currently getting).In order for Australians to benefit from virtual power plants to this extent, rules and regulations need to change. The Federal Government needs to get on board.
Community Energy Sharing
Once virtual power plants are established and are operating to their fullest potential, the next step is community energy sharing. This will allow all Australians to access solar energy sourced from households, businesses and community solar farms.
Community energy sharing is particularly important for those in our society who don’t have the ability to generate their own solar power, such as renters, households with unsuitable roofs or limited access to sunshine.
Currently the grid is set up for customers to buy power from centralised power stations and this is supported by the trifecta of market regulations, infrastructure, and financial incentives for grid providers. Unfortunately, this setup prevents community energy sharing from happening.
Right now, it is possible for energy retailers to offer a package where a home or business can sell their power to their neighbour, however the problem is that the person selling the power can’t get any more value than the wholesale price of power.
What is needed is updated grid infrastructure which can dynamically price the cost to use the grid in real time, so that homeowners can get the real value of their shared power. It is also vital that market regulations are adjusted to allow easier access to provide virtual power plant services and electricity retailers interested in pioneering this future.
This community energy sharing model is operating right now in the Netherlands with great success. Check out one of the European leaders in this space, Vandebron (just make sure you click ‘translate’).
Driving Australia’s clean energy future
The annual Bloomberg New Energy Finance energy outlook forecasts renewable power investment in Australia will reach more than $US138 billion ($186 billion) by 2050 as the rate of new wind and solar entering the market increases to account for 92 per cent of all generation.
The transition towards Australia’s clean energy future is inevitable but in order to ensure the process is efficient and fair, Government policies and priorities need to change. We must ensure that all Australians can access the benefits of our clean energy future and we must prioritise solar and battery technology as the keys to unlocking our community energy potential.