A new Energy Networks Australia (ENA) and CSIRO report outlines the specific measures that could be taken to transition to smart energy, saving electricity customer hundreds of dollars per year and allowing Australia to achieve zero net carbon emission by 2050.
The two-year Electricity Network Transformation Roadmap study, which involved hundreds of stakeholders, found a national, integrated plan was needed to enable reliable and affordable electricity supply to be maintained during Australia’s transition to a more decentralised, clean electricity system.
ENA Chief Executive Officer, John Bradley, said Australian families would be better off by $414 per year on average under the Roadmap’s suite of measures.
“The Roadmap would transform Australia’s electricity system, enabling more choice and control for millions of customers while saving over $100 billion by 2050,” Mr Bradley said.
“If we act now, the grid will be more secure and resilient, despite high growth in large scale renewables and two-thirds of small customers taking up solar and storage by 2050.”
CSIRO Chief Economist Energy, Paul Graham, said a key Roadmap finding was that $16 billion in network expenditure could be saved by 2050 if the grid buys support services from customers with onsite resources.
“Under the Roadmap, traditional network investments can be avoided where it costs less to ‘orchestrate’ distributed resources in the right place at the right time and this saves money for all grid users.
“By 2050, over 10 million customers will own distributed resources like solar, storage, home energy management systems and electric vehicles which they can use to sell grid support services worth $2.5 billion per year.”
Mr Bradley said the Roadmap would require collaborative action by grid operators, governments and other parties.
“Grid operators can act directly on many parts of the Roadmap including transforming their customer relationships, service innovation, smart grid operations and developing new incentives for customers,” Mr Bradley said.
“However, a better energy future will need clear market signals. A key objective of the 2017 review of carbon policy must be securing a stable and enduring framework which will reduce the cost and uncertainty of decarbonisation.
“Australian electricity customers want an electricity future which avoids more frequent blackouts and bill shock while addressing global warming – this is their Roadmap.”
Affordable move to zero net emissions
Mr Graham said that the Roadmap shows that it is possible to contribute to global targets to reduce emission while lowering the impact on household bills.
“CSIRO analysis confirms it is possible for the electricity sector to maintain a reliable, stable grid while achieving zero net emissions by 2050, in line with the aspiration of the COP21 Paris Agreement,” Mr Graham said.
“On the way to a zero net emissions future, Australia’s electricity sector could exceed its share of current national carbon abatement targets, achieving 40 per cent below 2005 levels by 2030.”
Energy system analysis concludes that an integrated set of measures will be required including stable enduring carbon policy frameworks and incentives to enable ‘orchestration’ of millions of distributed energy resources, like storage, electric vehicles and smart homes.
“A low cost and secure transition of the electricity system depends on stable, enduring carbon policy and the Roadmap recommends an Emission Intensity Scheme for the generation sector be developed by 2020,” Mr Bradley said.
“By contrast, carbon policy which could change dramatically at every election or differs in every state is a recipe for a high cost and less secure electricity service to customers.
“Analysis for the Roadmap indicates technology neutral carbon policy, like an Emission Intensity Scheme, provides least cost abatement and could save customers over $200 per year by 2030.”
Mr Bradley said decarbonisation would require transformational changes in electricity grids.
“Significant abatement is achieved by connecting millions of small scale renewables and our analysis forecasts Australia to have six times its current Solar PV capacity in 10 years and 16 times current levels by 2050.
“The Roadmap also highlights the key role of transmission networks maintaining system stability in a low carbon future, with high penetrations of variable renewables.”
Mr Graham said the Roadmap analysis confirmed the critical role of thermal plants in balancing variable renewable energy output during the transition. However, this would need to be replaced over time by low emission solutions like battery storage, pumped hydro, gas fired generation with carbon capture and storage, or Power to Gas hydrogen technology.
“Our current analysis points to a zero net emissions future enabled by battery storage and biomass but there is a fierce technology competition underway,” Mr Graham said.
“With so much technology innovation occurring, market frameworks which are technology neutral and allow the best solutions to emerge will deliver lower costs for customers.”
Mr Bradley said the pathway to a zero net emissions future would present significant challenges which were manageable if governments, industry and customer advocates worked together in a national approach.
“During forums involving hundreds of stakeholders, there was immense support for Australia’s electricity system to prepare itself for a zero net emissions future.
“We’re hopeful the Roadmap analysis and proposed measures will support State and Federal Governments consider these issues during the carbon policy review scheduled for 2017.”