DER RoadmapWorkshop30 July 2019

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Department of Treasury

Welcome and Introduction

Danny DeSchutter Principal, ThinkPlace

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Department of Treasury

Opening Remarks

Stephen EdwellIndependent Chair, Energy Transformation Taskforce

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Department of Treasury

Setting the Scene on Distributed Energy ResourcesJai ThomasDER Project Lead, Energy Transformation Implementation Unit

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Department of Treasury

DEFINITION OF DER

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Distributed energy resources can refer to distribution level resources which

• produce electricity, or • actively manage consumer demand

e.g. solar PV systems, electric vehicles, batteries, and demand response such as hot water systems, pool pumps, smart appliances and air conditioning control

Department of Treasury6

• AEMO has estimated the minimum demand will breach the system security threshold of 700MW in 2022, and will continue to decrease further over time.

CONTEXT

Department of Treasury

THE VIEW FROM CARNARVON

Video courtesy of Horizon Power

https://youtu.be/X_1mjYb1yVY

Department of Treasury

WHAT IS THE DER ROADMAP?

“An action-oriented plan that seeks to identify the policy,

regulatory, customer and technical requirements (and who

is accountable for delivering them) to support high levels of

DER on the SWIS whilst ensuring safe, secure and

affordable electricity supply in the short, medium and long-

term.”

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Department of Treasury

SWIS CHARACTERISTICS• Wholesale, Capacity and Essential Services markets

• DER currently unable to participate in these markets• Monopoly, government-owned retailer (Synergy) for

small customers• Uniform tariff policy – high variable/low fixed charges• Tariffs not aligned with underlying cost structure

• Monopoly, government-owned network operator • Western Power expenditure and revenue is regulated

• ERA applies efficient expenditure test and ex-post review• Non-network solutions assessed and procured by WP• Reliability measures built into Access Arrangement and

Network Quality and Reliability of Supply Code

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Department of Treasury

THE VALUE STACKReliable supply to customers has multiple inputs:

100%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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Representative Cost StackGreen Schemes, 1%Market Fee & Essential Services, 2%Retail, 3%

Capacity Cost, 25%

Energy Cost, 20%

Network Cost, 49%

Department of Treasury

DER – THE STATE OF PLAY

• 1,100MW installed rooftop solar PV capacity • 280,000+ installations in the SWIS• Capacity growing rapidly (~200MW per year)

• Battery uptake has been slow so far• 900+ battery installations• Current price not cost effective - downward price trend

• Minimal uptake of Electric Vehicles to date• <400 registered in WA (2018)• 0.1% of new passenger vehicle sales• Currently a load – potential for grid support in the long term

• Little-to-no centralised coordination of DERs

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Department of Treasury

DER ARRANGEMENTS

• Inverter standards apply (AS4777.2)• Legacy feed-in tariff (ends 2020-21)• Renewable Energy Buyback Scheme

• Flat rate - 7.135c/kWh• 5kW limit, no battery export

• Non-REBS DER connections• Limited by Western Power’s Connection

Guidelines and technical limits• Battery exports allowed• Off-take negotiated with retailers

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Department of Treasury

DER PILOTS AND TRIALS

• Distribution Battery Storage • Western Power/Synergy

• DER control and optimisation trials • Horizon Power: Broome, Carnarvon, Onslow

• Network technical trials• Western Power: dynamic tap changes

• Pricing Trials• Horizon Power MyPower

• Peer to Peer trading trials

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Department of Treasury

WHAT’S GOING ON ELSEWHERE

• Open Energy Networks program defining Distribution System Operator roles

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“Coordination of these distributed resources is essential to alleviate the challenges and convert what could otherwise be a challenge to the system into an asset”

AEMO and Energy Networks Australia 2018, Open Energy Networks, Consultation Paper

Department of Treasury

LOOKING AHEAD

• What are the key ingredients to the future state we need to support a high-DER future?

• What market, technical, customer and regulatory settings are required to get us there, that don’t exist today?

• Are there any major barriers?• Which actions should be prioritised?

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Department of Treasury

THE BASELINE SCENARIO• Continuation of current trends over next 5 years to 2025.• High PV uptake

• Passive DER• Low day-time demand from the grid• System security and reliability issues have emerged• Network hosting capacity becoming an issue

• Battery uptake growth steady• Electric Vehicle growth remains low • Utility-scale renewables growth steady• Hydrogen adoption extremely limited

• The DER Roadmap will define actions required over the next 5 years 16

Department of Treasury

CREATING THE ALTERNATIVE SCENARIO

• Maintaining system security and reliability• Unlocking value of DER• Customers’ continued ability to connect DER

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Department of Treasury

DOMAINS

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Domain

•Technology

•Network Solutions and Investments

•Network operations

•Regulations and Rules

•Tariffs and incentives

•Markets

•Customer protections

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Next steps

Engagement:– Consolidation and review of todays findings– 1:1 sessions with Stakeholders – please reach out– Future sessions on specific topics as required

Contact details Jai ThomasDER Project Lead, Energy Transformation Implementation unitjai.thomas@treasury.wa.gov.au

For further information, please visit our webpage: http://www.treasury.wa.gov.au/Energy-Transformation/