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Australian government agency ARENA has recently been investigating the opportunities to integrate renewable energy into the grid, and the challenges associated with this. Utility recently spoke to ARENA CEO Ivor Frischknecht about some of the challenges and opportunities presented by renewable grid integration.

The Australian Renewable Energy Agency (ARENA) was established by the Australian Government in 2012 to make renewable energy solutions more affordable, and increase the amount of renewable energy used in Australia. The organisation has a $2.5 billion budget to fund renewable energy projects, support research and development activities, and support activities to capture and share knowledge.

ARENA is supportive of all renewable energy technologies and projects across the various stages of the innovation chain – from research in the laboratory to large scale technology projects.

An important focus for ARENA has been investigating ways to integrate renewable energy into the grid. Currently, ARENA is investigating a new initiative that would focus on demonstration projects that address barriers to higher penetration of renewables in distribution networks, at both residential and commercial scale. It could also demonstrate the value and reliability of using embedded energy resources – such as renewable generation, storage and demand management – as alternatives to upgrading ‘poles and wires’ network infrastructure.

“ARENA’s Board has identified integrating renewable energy in distribution networks as a major challenge and an opportunity for growth in the renewable energy sector,” said ARENA CEO Ivor Frischknecht.

“We are already funding several projects in this area and have been working with stakeholders to develop our priorities for future work.”

Why grid integration?

Due to the success of a range of renewable policy measures and accompanying cost reductions for technologies such as wind and solar photovoltaics (PV), renewables are reaching high penetration levels in a number of locations in Australia.

This distributed form and new source of energy generation presents an array of new matters for network and distribution operators to integrate into their business. These operators will benefit from improved forecasting for new generation types, technical standards, and balancing supply with demand to ensure that maximum benefit is derived from high renewable penetration.

According to Mr Frischknecht, technological change is fundamentally shifting the way Australian distribution networks are utilised. Increasingly, electricity consumers will produce electricity as well as consuming it. They will own or otherwise access distributed energy resources, especially rooftop solar, smart appliances and, potentially, energy storage. There will be greater opportunities for them to work with energy suppliers to manage their demand.

“Our stakeholders have told us that managing distributed renewable generation and other technologies is becoming increasingly important in distribution networks,” said Mr Frischknecht. “ARENA sees connecting to the grid as an emerging issue to future deployment.”

The strong recent growth of distributed renewables – mostly solar PV – plays a major part in these changes. Approximately 95 per cent of Australia’s more than 3GW of solar PV is connected to a network. Last year solar PV penetration in regional Queensland reached almost 18 per cent, according to modelling recently undertaken for ARENA by ACIL Allen. In South Australia, SA Power Networks has projected PV penetration in their network to reach 60-80 per cent of premises over the next 15 years (refer to SA Power Networks Future Operating Model 2013-2018).

“While solar PV generation is valuable in that it generates during the day when electricity demand is greater, it is also variable and doesn’t fit neatly with the network’s current reliability requirements. It also generates less during late afternoon/evening residential peak demand periods,” noted Mr Frischknecht. “Over time, as more electricity consumers install solar PV and battery storage costs come down, several stakeholders are concerned that the electricity grid will become an expensive back-up system for consumers who generate most of their electricity requirements on site.”

The transition to a new way of using electricity networks will have technical and economic challenges.

“As integrating renewables into the grid is a priority area, ARENA is undertaking activities to develop an evidence base that will be useful for the industry to navigate challenges – for example performance and reliability of a range of distributed technologies, pricing network services or engaging with consumers,” said Mr Frischknecht.

Major projects

ARENA currently has a number of projects underway as a means to further investigate the integration of renewables into the grid.

Stocktake project

The ‘stocktake’ project will collate and publish information on the various trials and studies on integrating renewables into the grid that have been undertaken around Australia, as well as the most relevant international projects.

“This will bring together the existing knowledge, experience, gaps and issues into a single place,” said Mr Frischknecht. “This will be a valuable resource for the sector, as well as for ARENA to identify specific priorities for this area of work.

“ARENA has engaged Marchment Hill Consulting to deliver the project and has convened a small expert stakeholder reference group to guide the project, including members from network companies, retailers, research organisations and energy market bodies.”

ARENA will communicate the results through its website in a series of instalments scheduled during 2014, and will hold a series of workshops to update stakeholders on results and analysis and to seek feedback on how to make future results as valuable and user-friendly as possible.

DANCE project

The Dynamic Avoidable Network Cost Evaluation (DANCE) project has been developed by the Institute for Sustainable Futures, located at the University of Technology, Sydney with ARENA funding. ARENA is now looking at extending this project.

“The project aims to provide a national, annually updated, publicly accessible, online map of network constraints. This could help identify potentially avoidable network costs in transmission and distribution networks,” said Mr Frischknecht.

While much of the information required for this is already produced annually in some form in Distribution and Transmission Annual Planning Reports, the information provided can be difficult to access and interpret for those without specialised skills and knowledge, and is produced in different formats. The map could assist the sector in several ways such as helping to lift productivity of network capital assets and developing markets for distributed energy services.

Clean Energy Council project

The Clean Energy Council’s Future-Proofing in Australia’s Electricity Distribution Industry project will focus on barriers to integrating renewables and related technologies in distribution networks.

It will engage a cross-industry steering committee.

“The project will explore the technical, knowledge, regulatory and economic challenges and consider solutions and the benefits of integrating renewable energy into distribution grids,” said Mr Frischknecht.

The project’s objectives are to:

• Identify key barriers that currently challenge the sustainable integration of renewable energy and demand management and what is needed for efficient resolutions both in the near and long term.

• Establish, coordinate and maintain relationships and transparent dialogue between key stakeholders.

• Ensure a holistic approach to the distribution network.

• Demonstrate the technical performance of existing and emerging renewable energy and demand management technologies and explore their value to the distribution network.

• Provide a set of recommendations and advocacy platforms to inform policy and regulation reform aimed at alleviating barriers to, and capturing the benefits of, the continued integration of renewable energy and demand management into distribution grids.

The project will also produce reports and hold stakeholder workshops starting around October 2014. The final reports are scheduled for May 2015.

ARENA’s funding status

The Government announced in the Commonwealth Budget 2014-15 that it intends to return almost $1.3 billion of ARENA’s uncommitted funding to consolidated revenue and incorporate its operations within the Department of Industry. However, the Australian Parliament will need to repeal the Australian Renewable Energy Agency (ARENA) Act 2011 for these changes to take effect. Until this occurs ARENA will continue its work progressing funding proposals and managing existing projects. Projects that already have a funding agreement with ARENA are not affected by 2014-15 Budget announcements.

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