Grid integration could save billions

Unlocking the benefits of new energy technology could lead to a 30% reduction in the network component of electricity bills by 2050 and a fairer, more efficient energy system.

Analysis released at the All-Energy Australia conference in Melbourne last week indicates economic benefits of $16.7 billion would be achieved through the smart use of network incentives to customers.

Energy Networks Association (ENA) CEO John Bradley said the analysis was commissioned by the ENA and CSIRO as part of the Electricity Network Transformation Roadmap program.

“Customers, not utilities, will make more than $224 billion — or more than a quarter — of all energy system investment decisions between now and 2050,” Bradley said.

“Energy networks can unlock the full value of these distributed resources, like solar, storage and demand management, with smart incentives for grid-support services.”

The modelling shows that if networks buy energy services from customers who have distributed energy resources, like solar panels and battery storage systems, it could:

• replace $16.2 billion of network investment;
• avoid $18.6 billion in cross subsidies between energy customers; and
• provide $16.7 billion in economic benefit to the community.

Bradley said smart incentives would reward participating customers for the ‘orchestration’ of their distributed resources in key locations, at key times during the year, in return for financial benefits.

“These benefits rely on distributed resources providing the grid support needed in the right place at the right time.

“Some networks are already introducing new partnerships, such as rewarding customers for allowing the energy network to use their battery storage during times of peak demand.”

Bradley said the analysis indicates the first step is to introduce demand-based network tariffs which are fairer and more efficient, with the choice for customers to voluntarily opt out.

“To create a platform for a smarter, more integrated grid, Australia will need a faster implementation of demand-based tariffs and the timely use of smart meters,” he said.

He added that the Energeia modelling found that the early transition to demand-based tariffs could save customers over 10% per year on network charges and avoid $1.4 billion in network investment by 2026.

“Smart incentives are also vital to avoid major cross subsidies and inequity between customers. This could save $600 per year for a medium family without distributed resources.

“Network tariff reform is designed to make prices fairer and more efficient, support customer energy choices and reward efficient use,” said Bradley.