The AER (Australian Energy Regulator) has notified the country’s power networks that they must include the numerous advantages of rooftop solar systems and distributed electricity to the grid when determining the cost of investments required to take in Australia’s flourishing rooftop solar agreement.
The DER (Draft Distributed Energy Resources) integration expenditure guidance note is asking for feedback from investors before a final document comes as electricity network companies tackle voltage and thermal constraints of a utility grid not built for 2-way electricity flow.
Presently Distribution networks i.e. DNSPs recommended a solution to tackle the management of growing amounts of distributed renewable energy generators to put tough limits on the intensity of rooftop solar energy that could be transported to the utility grid which includes zero in a few situations.
Although it’s just a poor substitute. The subsequent grid-based solutions would start from fundamental grid upgrades to the installation of powerful operating packages- in which import-export limits could differ with respect to time and location, for the domestic battery installations.
At the same time, Distributed Networks i.e. DNSPs are evaluating the prices of such an investment as well as how much of them can be delivered to the customers; the Australian Energy Regulator aims to point out that these prices should be evaluated against the numerous benefits of residential solar and domestic storage and shortly electronic vehicles, must provide to a wider power grid.
An elongated explanatory announcement following the AER draft document states that” As DER keenness levels grow and user expectations regarding SER use develop, network companies have suggested to invest in projects intended for growing hosting capacity and assisting a wide range of DER services”.
A lot of DNSPs have developed business cases to support DER projects on a financial basis. This explanation needs measuring DER advantages, not only to the network in the question but also to the wide range of electrical systems, along with the impact DER could have on the retail energy marketplace.
With respect to the retail energy market, the draft note affirms the more evident fact that the customer-driven acceptance of DER up to now mostly rooftop PV solar, has benefitted to decrease the entire price of supply experienced by all the customers, letting electricity prices down not seen in years.
The document states that “Increased DER production stands in for production by marginal centralized generators, which might have greater short-run marginal costs, as fuel and maintenance costs.” Additionally, it says that customer investment in DER decreases the requirement for investment in new or replacement centralized generators and could support the efficient working of the power grid by offering important system services like FCAS (Frequency Control).
But, it’s not where the advantages and cost of DER stop. Instead, the Australian
Energy Regulator shows, DER provides a variety of network-specific advantages that DNSPs must include into their investment calculations and as a result, deduct from the total price.
Or, as the AER states- “where a DNSP calculates – an advantage related to a DER integration investment, it must show that its expansion overheads have been altered in a continuous manner”.
Therefore, what are these network advantages? Here are the benefits- one of them is an environmental benefit and some rare benefits of DER that are stated by AER:
- Prevented/Avoided/Deferred augmentation
- Prevented/Avoided replacement/ asset derating
- Decreased line losses
- Enhanced reliability
Let’s look at each of them in detail:
- Prevented/Avoided/Deferred augmentation
The augmented DER capacity may result in avoided/deferred/prevented transmission augmentation since it might decrease the quantity of load supplied from inside distribution networks and decrease growing demand at the point of transmission connection. It might also result in avoided/deferred/prevented distribution augmentation since it can increase the load supplied from inside distribution networks and might decrease the growing demand at the upstream network assets.
- Prevented/Avoided replacement/ asset derating:
The draft stated that “Growing DER capacity could reduce the average load on the network assets, allowing deratings and when replacement is needed, small and cheaper assets could be deployed”.
DNSPs might measure these advantages where the recommended investment to grow hosting capacity results in changes in different parts of the network where – growing demand is not increasing with time at the related network asset, growing demand coincides with times when DER transports are allowed, network asset durability could be enhanced by decreasing the loads.
- Decreased line losses:
“Growth in DER production might lead to avoided transfer and distribution losses. DER production could deliver loads inside the distribution network, decreasing the supply from centralized generators attached to transmission lines of distribution networks, which prevents power from being lost due to heat when transferred over transmission lines. It could also decrease the distance the electricity travels over the distribution network in comparison with centralized generators, which decreases the quantity of power lost due to heat when transferred over transmission lines”.
- Enhanced reliability:
“DER could transmit distinct consumers and/or local utility network faults, where it could be isolated, decreasing undelivered electricity and blackout duration”, the draft stated, additionally, that it’s just measurable if the DER in question allows growth in flexible production and/or versatile capacity and where batteries could be added like VPPs and microgrids.
Especially, this cost stream might be stated where – the recommended investment contains or incentivizes extra investment in storage battery – which else not deployed- the extra storage battery investment is capable of separating at the time of the fault, up to certain hours of blackouts are common”.
As per the Australian Energy Regulator, this benefit is about deferred greenhouse gas emissions because of extra DER. No doubt, “These could just be listed if there’s a noticeable tax, levy or any other payment related to environmental or health prices which generators are needed to pay or where law-making authority directs DNSPs to calculate the effect of these consequences and has given a cost that needs to be used.”
The guidelines state that” renewable power capacity and/or a possible carbon cost for producers must be integrated into the DNSPs measurement of benefits of retailer market. If there’s a jurisdictional necessary to measure the cost of carbon, the DNSP must measure the benefits of carbon-related to proposed investment”.
With regards to the AER, these benefits may contain customer benefits like, “feeling of independence on the utility grid, and persistence”, which can act as inspiration for customers,” to remunerate a premium to invest in DER or accept decreased revenue from their DER investment”.
When the regulator explains that few consumers might value these non-monetary or intangible benefits, it states DNSPs must not involve them in their measurements. “According to the RIT-D principles, possible options must increase the existing value of the total financial benefit to all those who generate, use and transfer energy in the NEM,” it states.