Solar energy is on the rise, as coal-fired power stations age and gas prices rise — but is the grid ready?

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While Canberra is debating whether we should increase our uptake of renewables, homeowners, businesses and state governments are voting with their feet. 

Key points:

  • The uptake of large scale and rooftop solar is rising rapidly, and set to continue
  • The way we manage the national grid needs to change to keep things running smoothly
  • Transmission networks and energy storage for variable renewables will come at a cost, but doing nothing is not an option

But what do increasing levels of rooftop and large-scale solar mean for the grid?

Last year, the amount of electricity generated by solar panels and wind turbines rose by almost a third from 9.8 to 12.6 per cent of total generation. 

And while fossil fuel sources provide around 80 per cent of the national energy mix, their contribution is starting to decline with the closure of ageing coal-fired power stations and rising gas prices.

According to energy analysts and researchers, this is a sign of things to come. And for a smooth transition to cleaner, more flexible power, we need to make some changes.

How is our energy mix changing?

Analyst Marija Petkovic of Energy Synapse says variable renewable sources such as wind and solar are still a small percentage of the overall power mix, but their rise is likely to continue.

Many state and territory governments have realised that renewable energy is key to lowering power bills, and are moving forward with their own policies in the absence of federal action, Ms Petkovic explained.

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Both the Coalition and Labor say they take the threat of climate change seriously, but they’re offering different pitches on how to deal with it.

For example, Victoria has committed to a renewable energy target of 40 per cent by 2025. Queensland has set its sights on 50 per cent clean energy by 2030, and the ACT is aiming to run completely on renewables by 2020. 

“Consumers and businesses are also rapidly transitioning to renewable energy in order to reduce their electricity bills,” Ms Petkovic said.

According to Ms Petkovic’s analysis, businesses are leading the charge, with an 83 per cent increase in the capacity of commercial solar installations between 100 kilowatts and 5 megawatt, and small-scale commercial installations (under 100kW) up by 25 per cent in 2018. Residential rooftop solar installations rose by 17 per cent.

The fastest growing technology last year was large-scale (over 100kW) solar plants, which almost tripled their generation capacity. In Queensland, the energy generated by large scale solar was more than 14 times greater than in 2017.

What does this mean for the national grid?

A cluster of houses at Alkimos Beach all with rooftop solar panels.
Increasing numbers of households are turning to solar power. (ABC News: Briana Shepherd)

The grid that connects Victoria, NSW, Tasmania, ACT, Queensland and South Australia was designed to deliver electricity from large central power stations to homes and businesses. 

But technologies such as rooftop solar allow home and business owners to generate their own power and become “prosumers”: both producers and consumers of energy.

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This shift is akin to the difference between train and car travel, says Grahame Holmes, a smart energy systems researcher at RMIT University.

The old system was like a train on a single track, but the proliferation of small generators means that our energy system is now similar to cars driving down many roads in both directions.

Like cars, these generators need to be managed to prevent traffic jams.

“We’re not investigating how to manage the myriad of small generators. Instead, we are trying to force them to stay on the railway tracks,” Professor Holmes said.

And this has led to problems. Last August, a lightning strike caused the electrical interconnector between NSW and Queensland to separate.

When this happened, around 40 per cent of household solar over 180,000 square kilometres stopped delivering power to the grid.

The Australian Energy Market Operator (AEMO) is responsible for directing the traffic and making things run smoothly. They have recently started engaging with households, businesses and industry to work out how best to transition to a two-way grid and make the best use of distributed renewable energy resources and storage.

Power to (and from) the people

Another consideration in a more distributed power system is the “death spiral”: higher charges encourage people to install “behind the meter” technologies like rooftop solar and battery storage, and prices for those still relying on the grid rise as distributors try to recoup costs.

There are also technical challenges for the distribution network at times when rooftop solar generation is high, meaning that one possibility is to limit the amount of grid-connected rooftop solar to 30 per cent of total generation.

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Emerging technology could allow more solar households to connect, but this could mean the amount of energy exported is regulated by distributors rather than homeowners, Professor Holmes said.

One example is Tesla’s 250MW virtual power plant in South Australia, which aims to link 50,000 residential rooftop solar and battery storage systems. The first 1,100 low-income households will have free, centrally controlled systems installed, and receive a hefty discount on their energy bills.

Ms Petkovic said developing a wholesale demand response mechanism where prosumers are paid for the role they play in reducing demand on the grid during peak times would be crucial for distributed energy to participate more freely in the market.

Renewable options are inevitable

Integrating variable renewables into the grid will require investment in transmission networks and energy storage such as pumped hydro and batteries. 

But doing nothing is not an option, as coal-fired power stations are reaching the end of their useful lives, and cannot simply be replaced.

“You could put another power station where Hazelwood is — but couldn’t feed it, as there’s no coal left,” Professor Holmes said.

Another important point is that the growth of variable renewables is being driven by the fact they are now cheaper to build than other new generation infrastructure, as well as social and political interest, he added.

“This is the tide coming in and it is going to be difficult to stop. Do you build a sea wall, or do you find a new way of coping with the water coming in?” 

Nadine Cranenburgh is a freelance writer with qualifications in electrical and environmental engineering.

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