August 2018 for solarnetwork.
An example of how solarnetworks function is revealed in the US state of Vermont, where utility Green Mountain Power drew on electricity from 500 Tesla Powerwall batteries installed in about 400 homes to address peak demand. The savings from wholesale electricity costs were so great – $US500,000 in one 1-hour peak demand period on July 5 – that GMP is able to offer the Powerwalls to consumers at just one-fifth of their normal price – $US1,500, or $15 a month – in exchange for being able to use some of the storage at certain times.
It is a formidable task galvanizing policy support for wholesale distributed generation, or WDG. This means changing the way transmission costs are considered. NZ has its own lobby in Wellington,Like the Clean Coalition in California, which is proposing feed-in tariffs for distributed solar generators who export their electricity. Such efforts will help create a grid based eventually on community microgrids.
Wholesale distributed generation
WDG systems are distributed solar generated electricity exporters that are connected to the distribution grid and sell their electricity wholesale. Wholesale means a sale to a load-serving entity,. A load serving entity buys WDG and re-sells it to customers on a retail basis.
In California, about 17 percent of the renewable energy in the state comes from local solar, such as solar panels on rooftops and parking lots.
These resources offer great potential as WDG, but the potential is as yet largely untapped,.
WDG systems avoid the need for expensive transmission
Consider how your excess electricity, generated by your solar panels,could delivers it’s energy to the homes and businesses close by. Rather than being distributed to the larger, high-voltage transmission network, with the voltage losses inherent during the step-up from 240v to 10 Kv. WDGs are produced and used locally, This avoids expensive transmission costs and saves money. That value will eventually be recognised by NZ Policy makers, who have yet to deal with Corporate Hydro, which persists in obstructing WDG use.
It is now very clear that no need exists for utilities to charge grid transmission rates for WDG.
It is expensive to transmit electricity over large, high-voltage lines. Nearly half the total wholesale cost, which is about 3 cents/kWh ,in NZ.
“Now that it is becoming clear how much transmission costs, the value of DG is going up. When you add 3 cents/kWh to the value of WDG, it’s like adding 50 percent to the price of what utilities should be paying for WDG.”
How to open up the WDG market
A major way to open up the WDG market is to look differently at utility transmission costs. Unlike the Hawkes Bay Lines company which has no demonstrable justification for putting a grid-based transmission charge onto grid connected solar generators(whether or not they export to the local lines or use/store their energy on site). It is therefore necessary for government to create policy that recognises the benefits of WDG and insist that the costs of transmission are transparent.
Fortunately The investor-owned transmission lines company in Hawkes Bay is alone in being the only lines company to impose a punitive transmission charge on domestic solar generators. There is no justification for this charge. The local energy is not going through the transmission grid, but only through the local distribution grid.
Putting a meter at transmission-to-distribution substations, would make it clear whether DG is coming from the larger lines or the local lines.
Value of feed-in-tariffs
In addition to taking a hard look at the cost of transmission, FITs provide long-term, predictable payments for distributed energy.
The existing California Clean Coalition for distributed energy conveys that it is.“essentially a rate tariff that’s pre-defined and standardized so that any party knows in advance the price they will sell energy for. There’s no negotiation. It is standard”. They are seeing more WDG purchases in places where there are FITS and it has been figured out how to value WDG properly.”
For example, a FIT in Gainesville, Florida.,begun in 2009, helped Florida increase its solar PV capacity by 3,500 percent, keeping energy price increases to less than 1 percent. In marked contrast to NZ where delivered energy prices have increased 50% in a decade.
Along with FITs and more WDG on the grid, community microgrids will create locally produced energy with utilities paying for the energy provided by microgrids. However, many existing regulations prevent utilities from embracing community microgrids,
The existence of already built solarnetworks (solarnetwork.nz) will slowly but surely influence regulatory change. Not to mention that solarnetwork.nz would consider registering itself as a major generator when its aggregated generation exceeds 50MW and battery electric vehicles pull into the highway recharge station and specify that they wish to have a solar recharge.
Tony Atkinson with thanks to The Californian Clean Coalition.
- Community Microgrids Offer “Repeatable” Way to Replace Fossil Fuel Peakers in California
- Latest on the Electric Grid Revolution in California and New York
- California’s Grid Operator Looks at How to Absorb Excess Solar Energy with Storage
The decision announced by the Australian Energy Market Commission in July this year is likely to encourage new players in the market, to aggregate solar and battery storage installed in homes and businesses, as well as load controls, in a major shift to the way demand and supply is managed.
In California Tesla and other proponents of virtual power plants and demand management schemes have scored a significant win after the country’s main energy market rule maker gave its support to the idea that they can compete freely on the wholesale electricity market.
This is likely to encourage proponents of technologies that would manage the charging of electric vehicles, and the use of their combined battery capacity in the grid, and it could encourage peer-to-peer trading.
In short, it means that customers with battery storage and electric vehicles can strike contracts with providers other than their main retailers to provide power to the grid when needed. It sets a signal that the Australian grid is finally moving to embrace 21st century technologies.
That said, the AEMC – after years of deliberation and after initially rejecting the idea – has only given approval in principle. The idea still awaits a specific rule request that will likely repeat the battle between the proponents of new technologies, and those locked in the past.
Having such mechanisms will likely be a blow to the major incumbent generators, particularly those who rely on the existence of peak pricing events and the subsequent demand for market caps to underwrite their power plants.
Corporate Hydro is one of the most vocal opponents of the proposal, saying such a move could “reduce short-term high spot prices”. Arguing that this would not necessarily be in the “overall interest of consumers.”
Tesla, Sonnen, Simec Zen, Reposit, Redback, Sunverge, and others argue for the development of “virtual power plants”. These are essentially rooftop solar and battery storage installations located “behind the meter” in homes and businesses which are connected by software. These “distributed energy resources” can be harnessed to help moderate prices and meet demand peaks.
Cheaper, cleaner, smarter, faster
The argument is that these technologies are cheaper, cleaner, smarter and faster than the current default response – which is to switch on dirty and expensive “peaking plants” powered by gas, diesel or coal.
The companies operating in the Australian market, and some public interest groups, are fighting for the same right to be recognised on equal footing with traditional fossil fuel generators, and to allow consumers to engage multiple retailers/aggregators at the same connection point.
“An active demand-side characterised by the active participation of consumers promotes efficient outcomes in the wholesale market,” the AEMC said in its concluding report.
rule change Still required
The change of heart is a long time coming, and it’s not as though the likes of Tesla and others will be able to go out and offer these services tomorrow, as it still requires a specific rule change and more consideration.
The AEMC has said it is OK with the idea. It notes that consumer advocacy groups; the Total Environment Centre (TEC) and Public Interest Advocacy Centre (PIAC) have committed to presenting a rule change request soon. The devil will be in the detail of those proposals, and the response.
The AEMC notes that the increasing uptake of distributed energy resources, including solar PV, batteries, electric vehicles and dynamic, controllable, loads supports its decision. “A formerly passive demand side is becoming increasingly engaged through the uptake of distributed energy resources which is greatly expanding the choices that consumers have, to manage their energy needs at the household/business level,” it notes. It also notes the growing number of virtual power plants, where distributed energy resources are being orchestrated to provide services on a wholesale level. These include Simply Energy’s virtual power plant, the AGL virtual power plant, and the South Australian Power Networks virtual power plant.
This re-posted article originated on RenewEconomy, based in Australia,