A smart, renewable national grid is a step closer following the announcement of a new digital energy marketplace that promises to unlock the value of domestic solar and help manage peak demand.
The Decentralised Energy Exchange (deX), a partnership between ARENA, GreenSync, government and energy retailers, will create an open digital marketplace for energy generated by solar panels and stored in battery packs so it can be traded between consumers, businesses, communities and network utilities.
deX is being developed by GreenSync, with ActewAGL and United Energy onboard for two initial pilot projects scheduled for the middle of this year. Reposit Power and retailer Mojo Energy are also part of the collaboration. ARENA has provided $450,000 funding to support the $930,200 project.
“Reliability of the energy system and delivering new value streams to consumers are key priorities driving deX,” GreenSync chief executive Dr Phil Blythe said.
“Homes and businesses will be able to monetise their solar and storage assets by essentially renting them to the grid when they’re most needed. deX will revolutionise peak electricity management and drive more effective investment in energy infrastructure.”
Dr Blythe said getting the “small power plants” on Australian rooftops working to support the grid was “a powerful proposition for the widespread adoption of renewable energy technology and will fundamentally improve the reliability and reduce the intermittency of these resources in the energy mix”.
Consumers that supply power from their own PV or battery storage will be able to receive the value of what they generate as an automatic payment into a bank account or digital wallet.
GreenSync’s Bruce Thompson, project director for deX, said the platform will help address the “frustration” that some solar PV owners feel about the lack of value their solar has when it is fed into the grid.
The motivation for investing in PV has been mostly about “behind the meter” – people concerned about the environment that also want to reduce their power bills.
“But now we are all becoming prosumers,” Mr Thompson said.
For the networks, the motivation to engage with the platform is driven by the imperative to make the grid reliable and ensure everyone has power, he said.
The exchange will help networks to resolve a mismatch between when small-scale PV is supplied into the grid and when the networks need it in order to maintain grid stability.
It will unlock the value for both the networks and consumers, Mr Thompson said.
The first part of the solution will be cloud-hosted technology that coordinates PV and battery supply to the grid. The second part will be technology for control and coordination on the ground, in homes and businesses with PV and batteries.
One of the pilot projects will be undertaken in the Mornington Peninsula in conjunction with United Energy. The company is already working with the energy provider on a demand management project in the area.
Mr Thompson said it has already been established that solar PV and storage in the region was “really, really useful” when a heatwave drives peak demand. The goal is to pay households for the “value they are providing” to the network.
“The deX exchange is a step toward localised or ‘mini-markets’ on the grid that will optimise value for all parties and allow networks to integrate renewables and manage the reliability and stability,” United Energy head of strategy Greg Hannan said.
“This is key to creating value for energy customers in the grid of the future.”
A second pilot project will be carried out in the ACT, with ActewAGL piloting the exchange with batteries deployed in the ACT Government’s Next Generation Energy Storage Program.
The trial will demonstrate how market-integrated batteries can address grid constraints on segments of the network with very high levels of solar PV.
“deX will help us understand how distributed energy services like solar and battery storage can be valued, reflecting when and where the service is provided, and how that value can be shared fairly between customers and network businesses,” ACT minister for climate change and sustainability Shane Rattenbury said.
“This knowledge will inform our transition to a high-penetration renewables grid, both in Canberra and nationally.”
The pilot projects will be supported by a reference group to guide public policy considerations for wider implementation, comprising government and academic bodies including the ACT and Victorian governments, the Australian National University, the Australian Energy Market Operator, the Australian Energy Market Commission and Energy Consumers Australia.
Mr Thompson said another potential benefit of the exchange was the potential for many energy providers and network operators to avoid major capital investments such as extending transmission lines or building new gas generation facilities to meet peak demand.
They will instead be able to “harness the investment at the behind the meter level”.
For consumers, it will help them make the right decision about the size of system to install. In some areas, Mr Thompson said there would be low potential to sell feed-in power, which makes a larger system unnecessary.
Large-scale renewables can be integrated
Overall, the exchange addresses the need to facilitate high penetration of renewables into the grid, including large solar at the end of the grid.
“We can act as a virtual battery that can cope with the variability of wind across the national grid,” Mr Thompson said.
The exchange can also integrate other elements including pumped hydro storage.
Getting the holy trinity
The core mission is to achieve the “holy trinity” of energy – stability and security of supply, low energy costs and a green energy grid.
ARENA chief executive Ivor Frischknecht said funding projects like deX was delivering ARENA’s goal of accelerating Australia’s shift to renewable energy.
“To smoothly transition to a renewable energy future, we need new technologies and markets,” Mr Frischknecht said.
“deX is a software-based marketplace that will for the first time allow households and businesses to trade the grid services their batteries and rooftop solar can provide with their local network operators.
“This could encourage more investment in solar and batteries, supporting the grid, reducing the need for infrastructure investment and ultimately reducing the cost of renewables in Australia.”
The initiative is the first initiative to emerge from ARENA’s A-Lab innovation sandbox, which held its inaugural session in April 2016.
“ARENA is building on Australia’s rich history of invention by helping local companies develop world-leading renewable energy solutions,” Mr Frischknecht said.
“The A-Lab multi-stage innovation process is designed to operate in rapid cycles of ‘ideate, incubate and accelerate’. This unique approach seeks to foster breakthrough thinking on complex challenges facing the electricity sector.”
The initiative also got the nod from the federal government.
“This project is an important initiative to create a two-way interface between energy consumers and local network operators,” minister for energy and environment Josh Frydenberg said.
“This holds the potential to deliver on the government’s commitment to increasing the reliability of Australia’s energy system, whilst supporting a more effective and cost competitive roll out of renewable energy to households.”
An industry discussion paper will be released in the coming months, ahead of the first pilot projects. Mr Thompson said there will also be a series of public consultation discussions involving stakeholders and the community.
“The future has arrived,” he said.
“And probably none too soon in terms of what has recently been experienced.
“We have a complex technical and economic problem [in terms of energy]. We want to do something to solve that at the least cost socially.”