Electricity distributors design their networks to ensure customers have access to the electricity they need, even in the most extreme conditions. Traditionally, this has meant, as demand has increased, investment in traditional poles and wires infrastructure also increased. But now, new research from United Energy has highlighted the role solar and battery storage can play in providing the electricity customers need when network demand peaks.

United Energy (UE) is an electricity distribution business that supplies electricity to more than 650,000 customers across Melbourne’s eastern suburbs, south-eastern suburbs and the Mornington Peninsula.

UE has an exciting vision for the future to become “The Intelligent Utility” by accelerating the transformation of its electricity distribution network into one that is smarter and cleaner.

According to Karl Edwards, Manager Customer Innovation & Growth at United Energy, grappling with the challenges solar and storage present to electricity utilities led the organisation to a profound realisation.

“We were looking at different ways in which we could drive innovation into the grid and came to the realisation that through the use of solar and storage technology, we could transform the very nature and function of the grid itself,” said Mr Edwards.

“The traditional utility grid would no longer just include poles, wires and transformers and stop at the meter, but could extend out beyond the meter to also include controllable solar and energy storage technologies which are installed within our customers’ homes.”

This realisation led UE to develop a Virtual Power Plant (VPP) concept. A VPP consists of solar panels paired with batteries and a smart inverter, which is controlled via intelligent software.

The batteries are used to store excess solar electricity generated from the panels and then release the electricity to supply households and the grid at times when customers need energy or the grid needs support.

As an energy distributor, UE needs to build and maintain electricity assets so Victorians can continue to enjoy low- cost reliable energy supplies.

There are portions of the UE network that require more capacity, especially during peak times, to meet customer energy requirements.There are also areas which encounter voltage difficulties due to the high penetration of solar.

In the past, network capacity has been increased and voltage issues have been solved by upgrading equipment such as wires and transformers. In the future, the VPP has the potential to be a more cost-efficient means of meeting capacity and voltage requirements while reducing the investment required.

“The VPP pilot project came about because we saw an opportunity to utilise solar and energy storage technology as a smarter and potentially more cost-effective alternative to investment in traditional network infrastructure for meeting our customer peak demand requirements,” said Mr Edwards.

“We commenced the VPP pilot project in October 2013 in conjunction with our technology partner, Sunverge, and our retail partner, Energy Makeovers. As part of the project we completed behind the meter installations of over 50kW of solar and 150kWh of storage across ten residential customer sites and one commercial site.

“In commencing the project, we learnt that energy storage can be beneficial to not only ourselves as a utility, but can be used for a multitude of different applications across the electricity supply chain.

“UE developed an innovative business model that could allow the benefits of installing solar and storage technology to be shared by all the key stakeholders within the electricity supply chain; the end customer, distributor and retailer.“

UE as a utility can use the technology for peak demand reduction and augmentation deferral on high temperature days; a retailer can use the technology for energy arbitrage when spot prices are high; and end customers can also financially benefit from having storage installed by increasing their self-utilisation of solar energy.

The distributor/retailer partnership model allowed a unique tariff structure and customer offering for customers participating in the project to be formulated by Energy Makeovers, where all parties could benefit from having the technology installed.

“From the recent rollout of our AMI infrastructure, we learnt there is a strong correlation between peak demand on the UE network and high-temperature events,” said Mr Edwards.

“When this project was initiated, battery products were not specified beyond 40 degrees. This presented a major problem as we would need batteries to reliably operate when called upon to provide network support in even the most extreme temperature conditions, in excess of 45 degrees.”

Battery trials

The VPP unit.

The VPP unit.

To better understand how batteries perform in high-temperature conditions, UE hired a laboratory and subjected the VPP pilot storage units to extreme temperature conditions that matched those experienced during the Black Saturday bushfires of summer 2009.

“We placed the storage units in a worst case scenario of direct sunlight with no wind cooling at all and recreated very similar radiant heating and air temperature conditions for the hottest three days recorded over summer 2009,” said Mr Edwards.

“What we found from the lab testing is that even in the most extreme temperature conditions, the batteries were able to operate as required.

“We were able to use the findings from the lab tests in order to better understand exactly what causes heat gain within the storage unit, as well as identify the tradeoffs that could be made to the operation of the storage units in order to maximize their performance during extreme temperature conditions.

“The results from the lab testing were used as the foundation or blueprint for formulating our control strategy to minimise demand on the UE grid during evening peak periods on high-temperature days.

“UE successfully programmed the VPP to automatically forecast high-temperature days and prioritise operation of the VPP fleet for dispatch of energy during the evening peak, whilst proactively managing internal temperatures of the storage units for optimal performance.

“We executed our peak demand control strategy across a range of storage units installed in the field and found that we could reliably call upon battery technology for network support and peak demand reduction when required.

“Since our lab testing, we are now seeing products emerge with improved temperature management systems and increased temperature ratings.”

The future for storage

According to Mr Edwards, energy storage technology has the potential to play a key role in future energy infrastructure.

Technological advancements and ongoing price reductions in solar and energy storage technologies present an opportunity to utilise the technology as an alternative to traditional network infrastructure for meeting peak demand.

UE has identified that the use of storage in place of traditional augmentation is economically prudent only within selected pockets of the distribution network.

The economic feasibility of storage is closely linked to battery prices and the rate at which they fall over time (i.e. the percentage of sites where storage becomes economic in comparison to traditional augmentation improves as battery prices fall over time), however, even under the most aggressive price reduction forecasts for storage, there will still be a large number of substations where either the use of storage technology is not suitable, or does not represent an efficient investment.

“What this means is that the grid has been around for many years and we expect that it will continue to be around for many more,” said Mr Edwards.

“Solar and storage will not fully displace the use of the grid within urban environments, and we do not expect to see a mass defection of customers leaving our grid in the future when they have the technology installed.

“There are natural limitations to the amount of solar panels that can be installed on customers’ roofs, and we expect that most customers will prefer to stay connected to the grid so as to be able to substitute their energy requirements from the network.

“This is even more important for customers in winter months in Melbourne, where it is challenging to generate sufficient solar energy to meet their daily energy needs.”

Intelligent technology

UE undertook a worldwide investigation to identify and understand the state of the technology that was suitable for VPP installations, including a detailed review of the battery technology, software and integration.

The preferred batteries for the VPP pilot program were lithium ion batteries due to their high energy density, long lifespan and potential for future cost reductions.

Sunverge was selected as the technology partner for the project. Sunverge was able to provide UE with an intelligent, utility-grade, fully integrated energy storage product that was specifically designed for residential applications.

The Sunverge product had fully integrated its software solution with premium hardware to manage safety, performance and controllability.

The VPP is controlled through Sunverge’s secure website, and multiple batteries can be orchestrated with a single command.

The software platform designed by Sunverge could accommodate the unique commercial model UE had developed by facilitating joint control of the energy storage plant by both a distribution business and a retailer.

The Sunverge software platform enabled UE to aggregate a fleet of distributed energy storage resources which could be controlled in tandem to operate as a single VPP.

Sunverge customised their standard hardware to better perform in hot Australian climatic conditions by adding active cooling to the VPP system.

Sunverge also continued to evolve their load and solar generation prediction algorithms to maintain the most efficient operation possible for the hardware.This ensured that the Sunverge system could provide maximum value to the customer when the VPP system was not being used by UE for network support functions or the retailer for arbitrage.

Managing peak demand

Karl Edwards

Karl Edwards

UE expects energy storage to fundamentally change the way utilities approach demand planning over the long term.

“At UE, we design and operate our network to facilitate there being sufficient capacity available to meet our customers’ peak electricity demand requirements,” said Mr Edwards.

“Electricity demand on the UE network typically peaks in the evening period over the summer months on the hottest days of the year.

“Economic growth and the installation of sizable load appliances, such as air conditioners, has historically caused peak demand on the UE network to grow, resulting in electricity distribution network infrastructure assets becoming overloaded, or constrained, over time.

“In order to minimise the risk of asset failure and supply outages, UE invests capital in upgrading overloaded network infrastructure assets such as cables, wires and transformers,” said Mr Edwards.

UE recognises that traditional means of providing electricity supply services to its customers are changing. A number of factors such as increased customer engagement in energy decision making, changing demographics, government policy and technology advances (such as energy efficiency and the installation of rooftop solar) is causing growth in peak demand to flatline or fall in parts of the network. I

n a world where demand on parts of the network is falling and future peak demand on a substation is unknown, it has become increasingly difficult to plan for large-capacity upgrades using the traditional approach to demand planning.

“We are seeking ways in which we could make more efficient use of our existing infrastructure assets,” noted Mr Edwards.

“We know that the use of solar alone does not reduce peak demand, however solar coupled with controllable energy storage technology provides UE with the ability to incrementally add capacity – by reducing customer grid consumption – to the network as required in response to changes in customer demand patterns over time.”

Solar and storage can be progressively installed on the network to delay a capital investment in augmentation until a clear trend in peak demand growth is evident and it is established that network augmentation is required to support customer load.

Where peak demand continues to grow, solar and storage can be added incrementally to provide capacity where it is cost-effective in relation to traditional augmentation.

Where peak demand growth is not rapid enough to justify augmentation, additional energy storage units can be added as required to maintain the distribution substation within its rating.

In regions of the network where growth falls or flatlines, energy storage can be removed and transferred to other constrained regions of the network if required.

“The analysis we have undertaken suggests that wide-scale deployment of energy storage will have a material impact on peak demand growth within parts of our distribution network,” said Mr Edwards.

“In pockets of the distribution network where there is a high penetration of storage installed, peaks will likely flatten. We are unlikely to see the growth in demand that we may have seen historically in these parts of our network.

“In other parts of the network where the penetration of storage is relatively small, peak demand growth will continue and investment in traditional poles and wires infrastructure will be required to ensure customers peak demand requirements can be met by the network.”

Upgrade savings

UE has estimated that should battery prices fall in the future as forecast, storage could be the most cost-effective solution for up to 30 per cent of upgrades on its network by 2020. These cost savings will benefit all customers located within the distribution network through lower prices.

Meeting voltage requirements

Through its research, UE has found that solar alone does not shave peak demand; and a high penetration of solar installed on distribution network (in excess of 30 per cent) can potentially create significant issues with voltage rise on the network.

“We learnt that by locating the batteries at the right locations along the distribution feeder, controllable solar and storage can be very effective at regulating voltages too,” said Mr Edwards.

Storage helps address voltage rise issues on the LV distribution network in one of two ways:

  • Passive voltage regulation – which absorbs excess PV generation into the batteries during times of light load and high solar generation
  • Active voltage regulation – which involves actively controlling the energy storage plant to sink and source both real and reactive power to the network in order to regulate voltages at the point of connection.

If network voltages are high, active voltage regulation can be used to add load to the network by charging the batteries from the grid and therefore using the batteries as an energy sink to drag voltages at the connection point lower.

Conversely, stored energy from the batteries can also be exported to the grid to boost grid voltages at the connection point if the network voltages are low.

“We have discovered that there are scenarios or pockets on the network where the use of storage for voltage regulation is particularly efficient,” said Mr Edwards.

“The voltage regulation control algorithm developed by UE could help facilitate a much greater penetration of solar on the UE distribution network by helping manage the voltage rise and power quality issues associated with the installation of PV by customers.”

Next steps

Whist UE has successfully tested the technology at individual customer premises as part of the VPP pilot project, the VPP pilot customers were distributed across the whole UE network and were not located on one particular constrained region of the network.

UE has identified selected constrained (overloaded) assets for rectification, whereby solar and storage is more economic than traditional network augmentation solution.

As part of the next steps for this program, UE seeks to commence installations of solar and storage assets within selected constrained regions of the network in order to prove that the technology can be controlled in concert to defer investments in actual planned augmentation projects.

United Energy was recognised for its work on this project at the recent Clean Energy Council Awards, where it took out the Innovation Award for its commitment to helping shave off peak demand.


Lauren brings a fresh approach to content. While she’s previously written for publications as diverse as Australian Geographic, The Border Watch and Girlfriend, she’s found her true passion in her current role as an editor in the world of energy and infrastructure trade magazines.

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