Solar Progress - Issue 2, 2013 Sample
description
Transcript of Solar Progress - Issue 2, 2013 Sample
05/13 issue 2
ISSN: 0729-6436
Building a power station: electrons or steam? Options in solar thermal technology
Running an electricity network Some hypothetical alternatives
Building a technical Nepal Painstaking progress in the third world
Central Victoria turns on to solar power What a difference a solar city makes
The OffIcIal JOurNal Of The AustrAliAn solAr CounCil
Solar 2013 Conference & Expo
Speakers and events
It’s time to look at
Solco in a new lightYou may know us as Australia’s first choice for Solar PV and Pumping products. But today, we’re so much more.
Building on the success of our wholesale components and system supply business, last year we established new divisions in Power Generation (IPP) and Project development (EPC).
For our existing wholesale customers, Solco Solar Products is extending its product lines and service offerings to further improve our customer service levels across Rural and Regional Australia. With Solco Solar Power, we’re actively investing in our own or joint-venture large-scale PV power generation opportunities.
And where project scale and risks exceed our wholesale partners’ capabilities, Solco Solar Projects can step in to manage commercial PV project development from design, through procurement, installation and maintenance.
Powering Australia’s solar energy future.
With over 25 years experience and a long term commitment to a sustainable energy future, what can we do for you?
Call 1800 074 007 or visit solco.com.au
SOL0
102_
210x
297_
Eco
SolarProgress | 1
22
Contents
844
Australian Solar CouncilForeword by ASC CEO and Solar
Progress Editor 2
Solar project financing tour of Taiwan 6
SOLAR 2013 CONFERENCE & EXPO PROGRAM 18SOLAR 2013 CONFERENCE & EXPO
KEYNOTE SPEAKERS 20
State Branch activities 49
ASC Membership listing 60
Solar advances and researchSolar thermal technology <50 MWCarbon reduction Ventures – into CSP 8
CSIRO’s Solar Forecasting project 30
Special featuresIf I ran an electricity network Alan Pears reviews the 2012 Energy
White Paper 12
Illawarra Flame at Solar Decathlon
‘energy olympics’ 22
Swedes aim high in transport renewables 34
Central Victoria Solar City – changing the
landscape 38
Building a technical NepalPeter Freere’s vision materialises 44
ResourcesAustralia’s Solar Installations 100 kW + 28
Political updateShadow Minister Greg Hunt outlines the
Coalition’s energy policy 4
News and viewsAustralia China partnership 16
Pain versus GainNigel Morris assesses solar industry’s vital
statistics 24
Local and global solar news 42
Tech TalkTech guru Glen Morris on PV maintenance 36
Advertorials: Solar products and services
Yingli, Urban Group Energy, Refusol,
Solar Inception, SMA, SunTrix and Schneider
Electric 42
Solar company profiles 52
A listing of prominent solar entities
38
18
Front cover:Newstead’s conservation-oriented community embraces healthy lifestyles and solar power Image courtesy Central Victoria Solar City
dITOr
dr Bill Parker
Phone: 0403 583 676
cONTrIBuTOrS: Peter freere, rob fuller,
Greg hunt, Glen Morris, Nigel Morris,
Wayne Smith, Nick underhill
cONTrIBuTING edITOr
Nicola card
NaTIONal SaleS MaNaGer
Brian rault Phone: 03 8534 5014
deSIGN & PrOducTION
annette epifanidis
cOMMSTraT MelBOurNe
level 8, 574 St Kilda rd Melbourne 3004
Phone: 03 8534 5000
auSTralIaN SOlar cOuNcIl
ceO John Grimes
PO Box 148, frenchs forest NSW 1640
www.solar.org.au
aBN 32 006 824 148
commStrat aBN 31 008 434 802
www.commstrat.com.au
Solar Progress was first published in 1980. The
magazine aims to provide readers with an
in–depth review of technologies, policies and
progress towards a society which sources
energy from the sun rather than fossil fuels.
except where specifically stated, the
opinions and material published in this
magazine are not necessarily those of the
publisher or auSeS ltd Trading as australian
Solar council. While every effort is made
to check the authenticity and accuracy of
articles, neither aSc nor the editors are
responsible for any inaccuracy.
Solar Progress is published quarterly.www.solar.org.au
SOlar PrOGreSS is published by commStrat for the australian Solar council (aSc).
Solar Progress subscriptions: contact anna Washington executive assistant, aSc [email protected] or call 0409 802 707
34
2 | ISSUE 2 • 2013
Bill Parker Editor
John Grimes Chief Executive, Australian Solar Council
I spoke about the extremes of weather in our last edition, as it was
actually happening. Now, the Climate Commission has released its report
(http://climatecommission.gov.au/report/extreme-weather/). The term
extreme weather or climate event refers to “an occurrence of a value of a
weather or climate variable beyond a threshold that lies near the end of
the range of observations for the variable” (IPCC, 2012).
You do not need to be reminded of the severity of weather patterns in
the past few years, whether that is drought or flood or extremes of heat.
The challenge is now one of adaptation. If you have the good fortune
to live in a home designed for your local climate, it may not now be as
effective at maintaining comfort as it was. Since design for the climate
implies the use of climate data it follows that adjustments need to be
made for new designs.
At the other extreme of flooding, the planning of new residential
developments must take into consideration the effect of flooding and
building on low lying coastal areas or river flood plains. None of this is
technically hard, but it requires well–informed local governments to enact
sensible planning policies.
On a domestic note, my last electricity bill was another extreme event.
Enough was enough. I have placed an order for a system, thus joining the
1,000,000 and rising who are financially motivated to install PV.
Of course, as some readers may know, this is not my first experience
with PV but there is a massive difference now in the market compared to
that of 1998. Then, at the time of installation there was about 4 kW total
grid connected PV in WA. Now there is more than 275 MW.
As long as the electricity retailers keep hiking up prices, that number
will grow, even with a grossly unfair buyback tariff of 8cents/kWh. More
on this in our next issue.
Bill Parker
DRAMAtIC ENERGy CHANGESThe way we generate, transmit, use and store energy is changing at a
dramatic pace. Energy efficiency measures, a switch to renewable energy
(solar and wind), increased distributed generation (like solar PV), and the
prospect of battery technology at the household or local level (including
in electric vehicles) are all having a dramatic impact.
AN INDuStRy PROtECtED FROM CHANGEFor almost 100 years the energy companies have not changed their
business models. There was no reason to. Their charter was to deliver
ever more energy to an energy hungry nation. In return they worked as
monopoly or semi-monopoly providers. Better still when they spent money
they put their prices up by a set margin that was guaranteed by government.
A sector with a government guaranteed rate of return on all expenditure,
which was not subject to outside influences and competition for over a
hundred years. What a great business!
tHE RIGHt RESPONSESo the energy industry’s response to competitive change, outside
pressure, and new technology has been predictable. At first ignore. Then
attack. Then undermine and set up barriers.
This is the phase we are currently in, and it has become increasingly
polarised and political. In my view this will only end badly for the incumbents.
Think Kodak, Chrysler and any newspaper you care to name.
The sector needs to change, and change fast. We need to strike a new
deal. A deal where we put a value on energy efficiency and align our
interests. Where solar, and storage are integrated sub-station by sub-station
to strengthen the grid and reduce costs. Where we plan for a transition to
distributed renewable energy.
The solar industry is the only industry worldwide which has continued
growing and creating new jobs in the period since the GFC. As we transition
to a 100% renewable energy system it is time for the incumbents to start
embracing the new reality. Change is coming, ready or not.
John Grimes Printed using fSc® mixed source certified fibre by Graphic Impressions Pty ltd.
4 | ISSUE 2 • 2013
Solar power will have a growing role to play in providing Australia’s
energy needs into the future, both on a small and large scale.
One million roofs across Australia now have a solar system installed.
It is an important milestone and an indication of the Australian
community’s support for solar. It has taken significant time to reach this
level and there have been more than a few hiccups along the way, with a
range of changing federal and state policies that have created significant
uncertainty for the industry.
That is why I am extremely mindful of the importance of providing
much needed stability and sustainability for the industry. The Coalition
has been very upfront and transparent about the policies it is taking to
the next election, including our commitment to the Renewable Energy
Target (RET), reducing Australia’s emissions and specific support for the
solar sector.
It is important to recognise that there is agreement between the two
major political parties on the need to reduce Australia’s greenhouse
emissions by five per cent by 2020. There is bi-partisan support for both
the targets on climate change and the RET.
The point of difference is how you get there. The Coalition has
consistently argued that a Carbon Tax, which primarily drives up the
cost of electricity, is the wrong approach. If it was being judged on its
environmental outcomes alone, then it would be scrapped immediately
because on the Government’s own figures, Australia’s emissions will
increase from 560 to 637 million tonnes by 2020 under the Carbon Tax.
On the key criteria for which it should be judged, the Carbon Tax fails.
The Direct Action PlanIn contrast, the Coalition’s Direct Action Plan will cut emissions and will
do it without a $9 billion a year tax on business and families. Our policy
is to focus on emissions reduction by purchasing abatement at the
lowest cost via a market mechanism. In that way we achieve our five per
cent target but within a capped budget and with local environmental
benefits, such as cleaning up landfill gas, revegetation or via energy
efficiency in buildings.
Also included in Direct Action is our promise to deliver One Million
Solar Roofs. While Australia has now hit the one million mark, we still
believe there is opportunity to further expand the market in a sustainable
way. In response to concerns within the industry about programs that
have been rushed out then scrapped, the One Million Roofs will occur
through a staged roll out. The program will be delivered with a cap of
100,000 per year over the next decade. There will be a focus on low
income earners to provide them with a means of combating rising
electricity prices. The program will cover solar PV, solar hot water and heat
pumps. Staging it over ten years provides the industry with a structure for
planning and is an attempt to bring to an end the highs and lows that
have traditionally plagued the sector.
The Coalition remains committed to the 20 per cent Renewable Energy
Target. It is a position we have re-stated following the recent review. As
already mentioned, the Coalition is very much aware of the importance
of providing certainty for the renewable energy sector and that any
significant change would create sovereign risk.
The RET was introduced by the Howard Government and we have
been consistent in our support for the scheme, which assists in
reducing Australia’s CO2 emissions. It is the RET that has been the
driver of solar investment, along with the significant drop in costs, and
will be into the future.
R&DWe also know there is a role for research and development and so have
given our support to the role of the Australian Renewable Energy Agency.
While there have been some significant disappointments in regards to
the Government’s flagship projects, we believe with rigorous assessment
ARENA does have a role to play.
However we do not agree with the Government’s allocation of $10
billion to the Clean Energy Finance Corporation. The Coalition remains
critical of this process for it is putting $10 billion of borrowed taxpayers’
money on the line, without producing one extra watt of renewable
electricity as it will still fall within the RET. As far as we are concerned, it
doesn’t pass the sound financial management and policy test, particularly
in the current context of a major budget shortfall.
The Coalition has a strong track record on the environment and in its
support of the solar sector. What we want to be able to deliver, if elected,
is a policy that provides sustainability and a long-term future for the
industry without constant chopping and changing. Solar has a key role to
play in the energy sector and we encourage the industry to continue to
invest and expand.
The Hon Greg Hunt MP is Shadow Minister for Climate Action and the Environment.
Solar Progress asked Greg Hunt, Shadow Minister for Climate Action and the Environment, about the Coalition’s energy plans.
Coalition’s support for the solar sector
Political update
Greg Hunt (right) expresses support for the Australian solar industry
SOLAR SOLUTIONS MADE EASY
Advanced
solar technology
• QualityTier1solarpanels• Reliableinvertertechnology• Flexibleandtailoredfinanceoptions
6 WAREHOUSES ACROSS AUSTRALIA
CONTACT US TODAY 1300 180 888
www.solarfund.com.au
• ExclusivedistributorofSungridPVsolarpanels
• Australia’slargestwholesalerofCSUNandSamilproducts
6 | ISSUE 2 • 2013
In March the Australian Solar Council
coordinated a Solar PV and Solar Project
Financing tour of Taiwan, the second largest
solar manufacturing centre in the world.
Delegates were introduced to pre-qualified
solar financing contacts, as well as a selection of
the best solar industry players in Taiwan.
WINAICO was the primary sponsor of the
trip, and we worked closely with Austrade and
the Taiwanese Industrial Technology Research
Institute (ITRI) to make sure the delegates got
the most out of the visit.
The unanimous feedback from delegates
has been that the trip was definitely worth
the effort, with the level of contacts and
introductions exceeding their expectations.
Delegates’ feedback to the Council indicates
that all are now in detailed discussions with
prospective partners.
China VisitBuilding on the success of this visit, the
Australian Solar Council will lead a delegation to
China in September. After visiting and meeting
with around 100 companies in China over the
past year, we have picked the best to include on
the tour.
We will send a more detailed program out
shortly, and if you would like to express interest
in joining the tour, or sponsoring the event,
please send me an email at [email protected]
Not on our Mailing List?If you are not on our email alert database, but
would like to be, please visit www.solar.org.au
Australian Solar Council CEO John Grimes presents insights into the value of a recent visit by delegates to Taiwan, which boasts a massive solar industry.
Taiwan Solar Financing visit a success
Top: WINAICO Visit - Delegates get ‘up close’ to solar manufacturing Below: One on one Meeting Forum
Top: Delegates at the opening briefing session – John Grimes is centre front row, yellow tieBelow: Factories Tour
Australia’s number one panelTrina Solar is proud to be the number one choice of solar panel in the Australian market*. Industry-leading products such as our “Honey” cells deliver higher efficiencies and excellent value for money. Combined with our standard 10-year workmanship and 25-year linear power output warranties, Trina Solar is an investment that delivers great returns and offers complete peace of mind.
It’s no surprise that with award-winning products and a commitment to powerful local partnerships, Trina Solar has become Australia’s number one choice in solar panels.
www.trinasolar.com.au
*SOURCE: Australian PV – Technology and Brands Report 2013 by Solar Business Services.
8 | ISSUE 2 • 2013
One of the recommendations in last year’s ASI report (“Realising the Potential of Concentrating Solar Power in Australia”) was that Australia should think small when it comes to solar thermal power. This begs the question of how small is small? Bill Parker spoke to Rob Coltrona, the Managing Director of Carbon Reduction Ventures, about his move into solar thermal technology.
Do you wantelectronsor steamwith that power station?
Solar advances
Australian CSP had its origins in the outback at White Cliffs with a
25 kW multiple dish plant. This plant can regarded as the birthplace of
CSP in Australia, and from it came the Big Dish at ANU in Canberra, a
400m tracking plant. This has so far proved to be a challenge to transfer
the technology to full commercial operation.
Using the same basic starting point - that focusing the sun’s heat
on to a receiver enables the production of steam - another pioneering
venture began at Lake Cargelligo (500 kilometres west of Sydney) with
the origins of the technology commencing in the late 90s with the work
of Bob Lloyd.
This 3 MW plant uses large graphite blocks mounted on a tower with
an internal heat exchanger and a field of heliostats deployed to focus
on the block. In theory, it could be ideal to supply a reliable quality of
electricity to a “fringe of grid” or isolated township or mining camp.
Fast forward to another venture. The intention here is to build a 1.5 MW
plant at Morawa in Western Australia. Carbon Reduction Ventures, the
company intending to build this small plant are using the same technology
as at Lake Cargelligo under an agreement with Solastor Pty Ltd.
But how was CRV conceived? Rob Coltrona has a background in
technology development, a scientist by training, who chose to surround
himself with a team of people with backgrounds in project management,
utility experience and engineering. It grew from his experience in R&D
commercialisation management at Murdoch University. But just how do
you make the transition from R&D at a university to taking on a barely
tried, as yet not commercial, new technology?
Coltrona’s main driver was energy storage. His business interest was
piqued by the model of SunEdison (a successful US company started in
2003 and supplying commercial, government and utility customers via
Cooma Tower
SolarProgress | 9
small PV plants). But since PV had no viable large scale storage option at
the time, the focus for him was on finding a new solar technology with
storage potential.
Pointing at production curves for PV versus thermal storage, he
asks: “Why pay for a spikey output curve when you can have the
reliability of a consistent flat result? The key issue is actually heat, and
that’s a useful commodity; easy to capture, can be used very efficiently
and with low impact.”
In 2009 when CRV was just an idea, the options for technology
development were few in the solar space, and an approach to Lloyd
Energy’s Steve Hollis in 2009 proved fruitful. Hollis was keen to see the
deployment of the graphite block system in WA. The work in New South
Wales was underway to the point of delivering an output but at that
stage had progressed no further.
4 kW
3 kW
2 kW
1 kW
0 kW
12:00A
M
4:00AM
8:00A
M
12:00PM
4:00PM
8:00PM
DAILY PERFORMANCE
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
12:00
4:00
7:00
8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
DAILY PERFORMANCE
Pow
er (
MW
)
Ralph M., Engineer
Electrifying ideas.We develop new ground-breaking
products from brilliant ideas.
With knowledge, guts and technical
creativity we make today, what
will lead the way tomorrow.
Phone: +61 408 555 580
www.refusol.com
With our innovative technology REFUsol inverters achieve a maximum effi ciency of 98.2%.
REFUsol 008K, 010K, 013K and 020K three-phase string inverters are light, compact and easy to install.
As a leading technology company
we supply fi rst class products of
the highest quality. Our promise:
creating innovative products that
are at the leading edge.
Making progress, made by REFUsol.
brisbane
july 24–26
Visit us:
20130415_AZ_SolarProgress_103x297+5mm_rocket_EN.indd 1 4/16/2013 9:53:09 AM
> 10
Top: CRV PVBottom: CRP SCP
10 | ISSUE 2 • 2013
In 2012 CRV was successful in winning a WA Low Emissions Energy
Development (LEED) $3.775 million grant and the interest of the Shire of
Morawa. Morawa is situated on the fringe of the South West Integrated
System and one of the WA towns with poor electricity delivery. The
company is now busy with the final feasibility study and construction may
commence later this year.
This technology is different from the now familiar CSP projects. In this
case, heat is stored directly in a large graphite block. The block contains a
heat exchanger circuit that delivers the steam. Otherwise, it is not all that
different from other CSP plants in principle.
Beyond the “Flange” – the opportunitiesThe standard steam turbine is commonly used for CSP plants. However,
CRV are proposing to use the Organic Rankine Cycle technology because
it allows power generation at lower capacity with higher efficiency and at
a lower steam temperature, hence the possibility for lower-cost, smaller
scale decentralized operation becomes more feasible. Rankine was a 19th
century Scottish engineer and physicist. He was a founding contributor to
the science of thermodynamics who developed the theory of the steam
engine, but it wasn’t until the 1960s when Harry Tabor (a well known ISES
personality) developed the Organic Rankine Cycle engine.
WA had an ORC plant at Meekatharra with the first outback ORC
installation, not ultimately a success story (wrong place, wrong time and
not enough local experience). Now, with work of Mario Gaia at Turboden in
Italy the ORC technology is mature and suitable. (The Cargelligo plant uses
a simple steam turbine.) Rob Coltrona is quite sanguine about the process
and talks about the numbers in blunt detail.
“We have 100% heat in, 25 to 30% out as electricity; the rest requires
further inputs to be cooled. But how much parasitic demand is there? How
much cooling required?” he asks.
“I can see the challenge being how to use that waste heat beneficially,
and an example would be absorption chilling. The trade off between
“valuable water” and electrons is a choice, so we need to manage the
system to balance the technology to make the most of available water
versus possible electrons”.
There is no doubt that the CRV team will address that question in a
creative way. In fact, such a plant could just as easily be used to rectify poor
quality groundwater, for which there is a need in WA’s agricultural areas,
Morawa included.
The ChallengesLike the construction of anything, be it a hotel, building or swimming pool
or a 1.5 MW graphite block solar thermal plant, many approvals must be
obtained for the construction, and such processes are not normally fast.
The project will also require approval from the WA Development
Assessment Panel as it is over $5 million in value. Just another building for
the building inspectorate to evaluate and make recommendations to the
local councillors for a decision.
However, establishing a functional proof of concept providing a better
quality of electricity supply to an outback town could be the route to win
hearts and minds of miners, indeed anyone wanting a regular, reliable
process that produces electrons … or was that just plain heat?
An argument that has endured for decades – PV or Thermal – is also
played out right here. Short term, PV at megawatt scale wins financially,
and if the end user wants proof, visit the Walkaway solar farm or one of the
larger installations across Australia. Operation and management costs may
be lower for PV (two people at Walkaway), but local employment may see
benefits from CSP. Mirror cleaners in Spain have jobs where they never had
any employment at all before CSP, with heat being an added benefit!
Perhaps the biggest challenge will be optimisation. Beneficial use of
waste heat is one aspect. Configuring the plant to maximise electron
production or steam is another. Despite long–term costs of diesel being
relatively stable, they are rising and there is a forward security issue, thus
diesel displacement is a market, especially in WA.
Staying connected with the research benchIt is hardly surprising that Rob Coltrona values his strong connections
with the University sector. He sees this as an opportunity to generate
more trained higher degree students and to maintain the link between
operational technology and R&D.
“The central question for them is about cycle efficiency, from the heat
collection to the electron,” he says.
We look forward to this technology being firmly embedded in all the
markets that can benefit.
Further Informationwww.carbonreduction.com.au
Water or air
OCR Fluid (vapor)
OCR Fluid (liquid)Vaporizer
Heat Source
Liquid Pump
Condenser
GeneratorTurbine
Water or air
OCR Fluid (vapor)
OCR Fluid (liquid)Vaporizer
Heat Source
Liquid Pump
Condenser
GeneratorTurbine
Solar advances
Organic Rankine Cycle
The ORC plant at Meekatharra
C
M
Y
CM
MY
CY
CMY
K
SolPac_Mag Ad print.pdf 1 26/02/13 2:47 PM
12 | ISSUE 2 • 2013
Alan Pears takes a different viewpoint on the Energy White Paper 2012.
If I ran an electricity network…
Special feature
We have seen the release of the final Energy White Paper and the report
of the Senate inquiry into electricity pricing. The final white paper was
substantially improved from the draft. But it still rates a ‘fail’.
The core scenario on which future energy policy is based is the
International Energy Agency’s (IEA) ‘New Policies’ scenario, which is
pretty much our past growth trajectory. The IEA’s ‘450 ppm scenario’
to limit global warming to around two degrees is largely ignored. The
brief discussion on page 204, titled ‘Integrating a Changing Climate into
Energy Planning’ focuses on climate adaptation and climate impacts
on energy infrastructure. The overall position is that cutting emissions
is not the responsibility of the energy sector, but is dealt with by other
government agencies and COAG councils!
So the Energy White Paper 2012, Australia’s energy transformation
fails to confront fundamentals such as the IEA view that, if we are to limit
global temperature increase to near two degrees Celsius, and global coal
consumption will decline by 30% by 2035. Less than a third of the fossil
fuel industries’ proved resources could be burned without exceeding
climate limits.
The white paper encourages people to explore different scenarios with
the online eFuture model, developed by CSIRO. Unfortunately, this only
allows consumption growth scenarios to be explored.
Among other things, the paper argues that fossil fuels are not being
subsidised, and that the generous taxation incentives simply reflect the
varying risk profiles of different activities. An interesting interpretation.
As usual, energy efficiency is dealt with last, in 16 of the 227 pages
of text.
Overall, this will be an interesting document for historians to look back
at when they try to explain to future generations how misguided our
society was, and why we failed to manage climate change.
Senate inquiry into electricity pricingThis report is a thoughtful discussion of the shambles that is our
electricity market. It has some useful recommendations and is well worth
a read. But the Hansard records of the inquiry hearings are much more
entertaining.
Hansard shows how, on one hand, the existing energy sector is
unanimous that there have been problems but that they are well on the
way to fixing them, so they should just be left alone. On the other hand,
they blame each other for the problems and express concern about the
lack of information on which to base decisions. For example, the head of
the Energy Department’s energy division admitted that his department
SolarProgress | 13
“So if I ran a network, I would broaden its activities into the competitive areas of the energy markets, both wholesale and retail, as well as the energy services market.”
had done no analysis of demand-reduction activities and their relationship
to electricity prices (Hansard 25/9/12). How can the department advise its
minister for resources on energy policy without doing this?
Those outside the mainstream energy sector were unanimous that
the problems are serious and will require substantial change. For
example, demand management expert Dr Paul Troughton estimated
that $16 billion had been spent unnecessarily on electricity supply
(Hansard p.67 27/9/12).
The depth of the cultural problem in the energy sector is reflected
in a comment by Australian Energy Market Commission (AEMC) chair,
John Pierce, in the hearings (Hansard 25/9/12). He drew upon a football
analogy, suggesting that the energy sector was just one specialist player,
and that there were other specialist players responsible for environmental,
social and other policy areas.
He suggested that it was ridiculous for other players to try to tell
a specialist player how to play as part of a team. He saw the role of
AEMC as focused on economic efficiency: others should deal with
other issues. He saw AEMC’s role as being “to inform other parts of
government what the effect on this efficiency objective is of things
they are thinking about…”
He, like others in the energy sector, interpreted the energy market
objective in very narrow economic terms and saw no role for energy
policy people to help other agencies to develop joint policy. No wonder
energy policy conflicts with other policies.
While the inquiry and its recommendations are a very useful step,
the big question is whether the energy sector will retake control of the
agenda through management of the detail of ongoing changes. Or will
they review their approach so it meshes with other government policies?
If I ran an electricity network…Electricity network operators are the whipping boys of the industry, with
some justification. But how could networks become part of the solution
instead of part of the problem?
At present, the core business of an electricity network is seen as
ensuring reliable and safe supply of electricity to consumers from large
power stations and measurement of electricity use for billing purposes.
They have no direct links to consumers and their culture is based on
building and maintaining poles and wires. Regulators treat networks
effectively as regional monopolies – although as I have pointed out
before, this is incorrect, as they compete with distributed generation,
energy efficiency, fuel switching and demand management – so they
are able to exert unfair market power. Networks are also paid based on
the size of their assets and the amount of electricity supplied through
their wires.
The main risk networks now face to their businesses is that use of
their capital-intensive networks will decline, while peaks become more
significant. Unless regulators agree to them extracting higher charges
from consumers or separating payment from electricity flows, this will
reduce their profitability.
14 | ISSUE 2 • 2013
So if I ran a network, I would broaden its activities into the competitive
areas of the energy markets, both wholesale and retail, as well as the
energy services market.
I would install regional electricity storage systems, which I could use
to store low cost electricity and sell it at premium prices. This technology
could be located strategically to also store exports from PV and other
distributed energy systems locally, before they complicate the operation
of the main network. This would allow ‘smart’ consumer technologies to
interact better with existing ‘dumb’ grids, reducing the need for high risk
investment in networks.
I would seek a licence to bid demand management into the wholesale
electricity market and set up a subsidiary business to develop this market
capacity. I would minimise additional investment in the existing network
so that depreciation and other allowances in tax rules would allow
reducing returns from them to be managed.
I would set up another subsidiary business to sell in-home and in-
business displays and smart controls, on-site electricity storage, PV and
stand-alone power systems, initially for fringe-of-grid customers, people
in high fire-risk areas and where networks are under stress. This would
include allowing consumers to share use of backup generators and
storage within local areas. This could include leasing these technologies
and providing ongoing fee-based maintenance and monitoring services,
so that those with on-site equipment need not be deeply involved in
running their energy systems. It might also include using under-utilised
grid capacity to provide low cost backup.
For the existing business, I would develop more sophisticated network
pricing schemes so that PV, other distributed generators and energy
efficient consumers gain benefit from avoiding demand or exporting
electricity at times and places of most use to the network.
This would encourage PV owners to consider orienting their panels
to generate more in the afternoon or to install storage to allow them to
complement the grid. This might be done through adding to existing
feed-in tariffs at certain times of day or by offering rebates on energy bills
based on actual avoided peak demand/exports at critical times.
Remote management of specific equipment such as pool pumps and
air conditioners and voluntary limits on peak demand, in exchange for
discounted prices, could also be part of the new business model.
Partnerships with welfare groups, community groups and other
businesses, as well as separate subsidiary businesses, will be necessary
to overcome lack of consumer trust in network operators, cultural
barriers and limited internal marketing and sales skills within the
network business.
Some elements of this model depend on changes to energy market
rules. But government policy makers should be supportive, as the
alternative is higher consumer energy costs and potential business failures
among network operators.
Alan Pears has worked in the energy efficiency field for over 20 years as
an engineer and educator. He is Adjunct Professor at RMIT University and
is co-director of environmental consultancy Sustainable Solutions
Reprinted from RenewEconomy of March 27 2013 with kind permission
of article author Alan Pears
Special feature
High risk areas in the Hills east of Perth. Poles and wires buried in the bush.