Energy innovation and technology: Integration of renewable energy and customer energy (session one)
The University of Sydney
Energy Innovation Officer
Queensland Farmers' Federation
Presentation title: Capacity firming provided by prosumer-owned solar-battery systems
Abstract: Electric power systems around the globe are undergoing a massive transition driven by the efforts to decarbonise the economy. In Australia, the transformation is remarkably rapid – due to the ever-dropping cost of renewable generation technology, coupled with the excellent availability of wind and solar resources and abundant land, all coal-fired generation will close by 2045, if not sooner. Replacing conventional fossil fuel generation with renewables is challenging due to the variable nature of wind and solar. Ensuring that sufficient supply is available to meet the demand at all times requires additional transmission infrastructure to increase the geographic diversity of wind and solar and firming resources to cater for still cloudy periods with insufficient renewable generation. The firming capacity can come from various storage technologies and gas generation. While these technologies are well understood, they are costly and often challenging to site.
Another alternative is to use the flexibility of distributed energy resources located ‘behind the meter’ in residential and small commercial buildings, an often unappreciated option. In more detail, the penetration of residential rooftop solar and batteries in the National Electricity Market is predicted to grow to 50GW and 40GWh, respectively, by 2050; this offers an unprecedented opportunity to use these resources to firm variable renewables. Within this context, we propose to use prosumer-owned solar-battery systems, solving the problem of cost and siting. Residential solar-battery systems are namely a consumer-financed resource, so using them for capacity firming does not increase the social cost. However, the private ownership also prevents the system operator from directly controlling residential solar-battery systems. We address this by proposing an operational model whereby at the bottom level, prosumers optimise the operation to achieve their private objective. At the same time, the remaining battery capacity is offered to the system operator to use for capacity firming. The problem is formulated as a bilevel optimisation problem where the optimality of the prosumer (lower-level) optimisation problem is embedded into the market operator (upper-level) optimisation problem as the set of optimality conditions, resulting in a single-level mixed-integer linear optimisation problem that can be solved efficiently using off-the-shelf solvers.
We demonstrate the performance of the proposed model using the retirement of the coal-fired power station Liddell as the case study. We show that using prosumer-owned PV battery systems significantly reduces the cost of providing capacity firming by reducing the need for gas-fired generation and utility-scale batteries.
Presentation title: The flow-on benefits of microgrids in agriculture
Abstract: Australian farmers are increasingly vulnerable to levers of the water-energy productivity nexus. High energy costs, including utility products and services that are no longer fit for purpose, are reducing irrigation affordability and in turn impacting yields. Simultaneously, rising affordability of DERs mean customer owned energy systems are very real competition to energy grids. Microgrids in agriculture present compelling opportunity for producers to shore up productivity and, if integrated into the NEM, help modernise regional energy networks and build local resilience.
Queensland Farmers’ Federation and project partners led a study from 2020-22 determining the feasibility of four microgrid archetypes across four farms in Queensland and New South Wales: Single Enterprise, Edge of Grid, Large Microgrid, and Anchor/Hybrid. Each farm produced a different commodity and was oriented differently to the existing network infrastructure. The study not only assessed the financial feasibility of each microgrid scenario, it also identified stakeholder value drivers, preferred ownership models, local network utilisation challenges, and regulatory barriers to unlocking full value and benefits.
The proposed oral presentation based on the study offers attendees viable scenarios for grid-connected microgrids in agricultural settings, illustrates how value drivers augment risk appetites, identifies pathways to reducing barriers, and proposes benefit beyond the farm gate. Recommendations to farmers, developers, and regulators will also be shared based on project lessons learned. The presentation will conclude with an overview of recommended funding and ownership models.
Australian National University
Presentation title: Waiting to generate: an analysis of wind and solar project development lead-times in Australia's National Electricity Market
Abstract: The complexity of administrative approvals can slow down the deployment of renewable energy. Approval processes are different within and across countries, which can substantially influence start-up costs and lead-times. Very few studies estimate renewable energy development lead-times across multiple years and projects. This study investigates the determinants of lead-times for 146 onshore wind and solar projects completed in Australia between 2000 and 2020. This includes estimating the impacts of ownership, location, and requirements that differ by size of generation.
In Australia, there was an improvement in lead-times. Prior to 2016, the average lead-time for solar projects was 46-85 months. This decreased to 24-40 months between 2016 and 2020. Onshore wind projects took longer to develop. Project lead-times were 54-128 months before 2005 and decreased to 30-72 months after 2011. While pre-construction lead-times decreased notably for both solar and wind, commissioning lead-times decreased for wind projects but increased for solar projects. This commissioning stage involves a re-iterative process of tests and equipment changes to meet generator performance standards. Changes in project ownership occurred often (42% of projects) but this had little impact on lead-times (increase of 5-8 months). Accurate estimates of lead-times are important for investors, project owners and policy-makers.
Accurate renewable energy project lead-time estimates are rare. This is surprising, as lead-times are often discussed and are required to make informed decisions about the start-up costs of renewable energy projects. Investors, project owners and policy-makers need to understand contemporary renewable project lead-times. Delays can be costly for investors and project owners, especially when refinancing occurs at a time with higher interest rates. Policymakers should regularly review lead-times to identify bottlenecks of concern in the project approval process and assess the feasibility of near-term renewables policies or targets.