The future of energy

Australia’s energy future — from power generation right through to residential energy storage — has been a topic that has sparked considerable debates and discussions.

Events such as the 2016 statewide South Australian blackout and closure of Victoria’s Hazelwood Power Station have put increasing pressure on decision-makers to guarantee supplies for much of the Australian eastern seaboard.  

As a result, the Australian Energy Market Operator (AEMO) has been working closely with the National Energy Market to ensure consumer requirements are met,  while governments, utilities and decision-makers are putting plans in place to ensure future power demand can be met. A prime example of this is South Australia’s large-scale battery installation to back up supplies in case of grid failure. 

While Australia’s power industry is traditionally perceived as conservative and slow-moving, rapid developments in technology and the rising popularity of renewable energy are opening the door to new and innovative energy delivery models. 

The rise of virtual power stations 

The Australian Government is no longer subsiding private individuals installing solar panels, but this doesn’t appear to have hindered the technology’s appeal. Australia already has one of the highest residential solar penetrations in the world, and in November 2017 marked an all-time high for panel installations. This wide install base has made Australia an ideal location for the introduction of solar battery storage and in turn the creation of ‘virtual power stations’. 

Created by a combination of multiple houses installing solar panels and solar storage batteries, virtual power stations are connected to the main grid in order to feed power back in. This power is remotely managed via software integrated into the system by a third-party provider. The last couple of years have seen a surge in the concept’s popularity, due to consumer angst about rising electricity prices and renewable technology becoming more affordable.

The practical benefits are fairly obvious — no-one wants a repeat of the South Australian blackout, and the risk of such large-scale incidents occurring could be offset by the adoption of such technology. Load shedding is also an ongoing issue around Australia  — wider implementation of virtual power grids could allow houses to self-power during peak demand times, helping reduce or even negating the issue. 

Utility providers are open to working with virtual power stations, but greater clarification is still needed for how they can be effectively used in the future. Given the relatively recent rise of the technology, there is still work that needs to be done in its regulation, and there are questions about its reliability as part of the wider grid.

Tightened cybersecurity in a decentralised distribution model

Looking further into the future, serious analysis suggests that within a few decades half of all electricity demand will be sourced from solar and storage virtual power stations, across individual homes and businesses. 

This presents a cybersecurity challenge for many utility companies. Cybersecurity is often thought of in terms of data theft but, given the increasing computerisation and automation of the distribution process, it’s entirely possible that malicious attackers could attempt to interfere with Australian energy supplies. It’s believed to have already happened in the UK, though the exact details are still ambiguous.   

Part of the issue is the decentralised nature of virtual power stations. Traditional power distribution systems are relatively closed, meaning that prospective attackers have only a handful of potential entry points. But with the likely increase of virtual power stations, there will be more and more additional entry points. Attackers may only need to breach one in order to cause considerable damage to a system. 

Traditionally, utilities have been proactive in protecting and strengthening the power network against electronic threats and cyber attacks. Moving forward, they’ll need to place greater emphasis on educating the public on the wider implications surrounding power security. 

The rise of virtual power stations presents practical benefits for residential as well as business users. Ultimately, they give consumers more power over their energy and leave them in a better position to use energy as a trading commodity between themselves and utilities. While further testing must be carried out around their practical viability, it’s an appealing option. 

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