As solar panels pop up on rooftops in record numbers, a smarter grid for a more distributed future must be built for the customers of tomorrow, according to Energy Networks Australia CEO Andrew Dillon.
Last year, Energy Networks Australia and the CSIRO released the Electricity Transformation Network Roadmap, which paved the way for a more connected grid and highlighted the need to transition to a system with more distributed generation.
Setting out 45 milestones and 158 actions, the Roadmap provided a clear pathway for network businesses to respond to the evolving environment with the agility, innovation and collaboration required to secure Australia’s energy future.
Energy Networks Australia chief executive officer Andrew Dillon says there is significant work to be done, both technically and regulatory, to make our networks capable of hosting more distributed generation sources.
“We already have significant numbers of solar connections around Australia – 32 per cent of Queensland households have solar on their roof, South Australia is at around 30 per cent and WA has more than 25 per cent,” Mr Dillon says.
“By world standards, those numbers are off the charts. The likes of Hawaii and California are barely 20 per cent, so Australia is way in front of what is often seen as renewable energy leaders around the world.
“This is good news for renewable generation and good news for those households that have solar, but it also means we are at the bleeding edge of both the technical and policy challenges – how do we integrate all that into the grid?”
Mr Dillon says a particular challenge networks face with the rise in solar installations is the coinciding rise in battery storage.
While with solar it is relatively simple to predict output from solar panels and therefore, predict what is getting injected back to the grid, it is a “totally different story” when storage is thrown into the mix, Mr Dillon says.
“Customers can have various reasons for wanting to charge their batteries at certain times of the day and inject back into the grid at other times of the day. It could be, for example, in response to a wholesale price signal, but if it is not coordinated with a network, it could lead to significant technical challenges,” he explains.
“So, what we don’t want to see is voltage issues, frequency issues or even localised outages.
“We certainly don’t want to see networks having to say to many customers, ‘sorry you can’t connect, we’re full’ and we don’t want to see networks having to spend a significant amount of capital on their existing network just to accommodate solar for certain small periods of the day.”
Mr Dillon says the way to avoid all of those outcomes is to effectively manage or ‘orchestrate’ these resources.
Energy Networks Australia has teamed up with the Australian Energy Market Operator (AEMO) to develop Open Energy Networks, a guideline for integrating new technologies such as batteries and solar into a modernised grid.
“Our challenge is to try and make sure there are no losers,” Mr Dillon explains.
“This is where it’s interesting, particularly with solar, if you can start to get this orchestration going we can really manage these localised resources and harness them to reduce grid expenditure and that will keep costs down for all.
“Hopefully we get some broad agreements on a high level on the sort of functions we need to start managing this.”
Making this work for the consumer, as well as networks and retailers, is of critical importance.
“If you look forward at our energy system, our Roadmap predicts up to half of electricity generation could be behind the meter by 2050 and if you think about those numbers, that’s a radical change to what we’ve seen historically,” Mr Dillon says.
“But more importantly, in this regard, it means networks’ role has to move from this one-way conduit to a platform basis and, therefore, our relationship and how we interact with our customers has to change as part of that.
“It’s not something that has happened overnight, it has obviously been on the cards for a while and networks have responded by being far more strategic and more heavily involved in consumer engagement than they perhaps were in the past.”
To support a more integrated grid, Energy Networks Australia has commenced a project to prepare a nationally consistent set of guidelines for network connection of a range of generation technologies, outlining the technical requirements to facilitate streamlined integration.
The development of National Connection Guidelines to standardise the connection of distributed energy resources (DER) into the grid has been identified in the Roadmap as a critical action to better integrate of growing numbers of customer resources into
“One of our challenges with the energy sector is we have grown from state-based grid to what is now a connected, but not always aligned, national grid,” Mr Dillon says.
“And where this plays out sometimes is in areas like connection policies where different states have had different technical requirements, which, in turn, have been interpreted differently by networks. And so there is a patchwork arrangement, which is highly frustrating to the likes of solar installers and other businesses wanting to help consumers connect more things to the grid.
“So we are now doing this project to align these standards across the country.
“We are working with a range of stakeholders – from the Clean Energy Council to regulators and consumer groups to try and get this project going, and it has been a very positive piece of work so far.”
When it comes to the future of Australia’s energy system, Mr Dillon says we should be looking across the oceans.
“While we do lead the world in penetration of household solar, many of the challenges we are facing – decarbonisation and trying to maintain reliability while integrating more and more intermittent solar and wind into our grid – are also being experienced by many countries around the world, so we’re not alone.
“There are some key themes we see from looking around the world that we want to make sure we appropriately consider for Australia.
“The first one is the logical response to more intermittent generation – to be more connected.
“If you look at the US they are doing more connections, and the border between Canada and the US, for example, has 35 interconnectors. Now it’s a long border but that’s a lot of interconnectors.
“And if you look at Europe, they’ve got targets for interconnection between countries and the reason for that is the more interconnected we are, the stronger the grid and its ability to handle more intermittent supply.
“Here in Australia we naturally have a less connected grid because of our geography, but we would say the logical response to the changing generation mix would suggest that we need to be more connected.”
Mr Dillon says hydrogen will also play a role in the future of Australia’s electricity sector.
“There has been a growing focus on the opportunities for Australia that hydrogen can present,” he says.
“Again, if you look overseas, Canada, parts of Europe, Japan and South Korea are really interested in the potential of hydrogen as an energy source most likely to be created by simply splitting water into hydrogen and oxygen using electricity.”
Hydrogen can be created by using excess electricity generated by Australia’s wind and solar farms when costs are cheap to run an electrolyser, and can then be stored in existing gas networks.
“This is far from a pipe dream, with a significant amount of work going on worldwide. Japan alone has spent US$12 billion in R&D in the hydrogen space in the past few years. So I think hydrogen is likely to happen.
“For Australia, it is potentially a significant export opportunity. We already have LNG export facilities, so it’s likely we can use that expertise or potentially even adjust those facilities to export liquid hydrogen as well.
“And we are likely to have lots of wind and lots of solar energy, so the input coming in is certainly very exciting.”
Andrew Dillon is an experienced energy sector executive, most recently as the General Manager Corporate Affairs at AusNet Services, owners of electricity transmission and both gas and electricity distribution networks in Victoria. Prior to AusNet, Andrew was General Manager Corporate Affairs at Energy Supply Association of Australia, worked in Corporate and Government Affairs at TRUenergy (now Energy Australia) and was a Senior Ministerial Adviser. He is also a Director of Goulburn Valley Water. Over two decades Andrew has worked in many parts of the energy industry as well as in government and consulting. He was appointed the Chief Executive Officer of Energy Networks Australia on 20 November 2017.
Mr Dillon qualified as a chartered accountant and spent time in banking and energy roles in the United Kingdom.