Australia is not making the most of household solar and batteries because Government is biased towards network operators

It’s time for Australia to rejig the way it thinks about the energy transition to bring in and share the benefits with smaller users and producers, as distributed energy resources (DER) and engaged communities force large companies to sweat the small stuff.

Approaches that allow local communities to be involved in projects, if not come up with solutions, will accelerate the transition to renewables, as will using existing small assets such as the vast amount of currently curtailed rooftop solar.

For example, average rooftop solar systems are now almost 10 kilowatts (kW) but across the country these are curtailed to 5 kW, a scenario that wouldn’t need to happen if networks shifted to using dynamic operating envelopes, says IEEFA Australia CEO Amandine Denis-Ryan.

It’s an example of how Australia is not making the most of the assets it already has because policy and regulatory focus is biased towards supply side organisations such as network operator.

And despite years of talk there still are no national DER standards nor a body in charge of developing them, Denis-Ryan said during the Power and Utilities conference in Melbourne this week.

“We have done some analysis on the potential benefits [of DER] and they’re not even well understood yet,” she says.

“There is a big role for community solutions yet we don’t give them the same priority and effort [in terms of policy and regulation].

“Making sure we give those solutions more visibility and support will deliver more benefits.”

Those benefits could amount to $90 billion in economic benefits by 2040 in reduced network and generation costs plus $10 billion in consumer benefits through reduced prices and diminished super profits, according to an IEEFA study late last year.

DER assets alone in Australia are estimated to be worth $25 billion, with another $250 billion added in the next 20 years as electric vehicles become the norm.

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From user pays to consumer investment

The messaging around energy assets has long been that the user must pay — either for personal assets such as rooftop solar or batteries, or as a customer of energy networks who must ultimately pay for the necessary upgrades to bring the renewable energy into the grid.

But that mindset must also change, says Ian Brooksbank, the departing CEO of Hydro Tasmania. He says it’s time to think about the energy transition as an opportunity for consumers to invest, citing an example in Tasmania where some communities are looking at group investments in renewables projects.  

“Why does rooftop solar work so well in Australia? Apart from the fact that governments have subsidised it over the years and we have a great sun resource…it’s an opportunity to take some control over your energy use,” he says.

“Part of the solution is to find ways to allow communities to invest.

“That’s an untapped opportunity.”

The concept of community investment in clean energy outside the home is becoming more common among Indigneous-led projects, but outside that sector it’s still rare.

In Queensland, Sunshine Hydro has sold a 20 per cent option in its flagship pumped hydro and green hydrogen project to the First Nations Greentime Energy Group (FNGEG).

And in Western Australia traditional owners of Yindjibarndi lands in the Pilbara are leading the development of a multi-billon dollar project encompassing around 3GW of wind, solar and battery storage to power major industrial energy users.

Squadron Energy is one of few big developers offering the opportunity for community buy-in for people living in the Central-West Orana REZ, the home of the 414 megawatt (MW) Uungula (now under construction) and proposed 700 MW Spicers Creek wind projects.

The other side of that opportunity is making dealings with large companies, such as renewables developers, more transparent, says Beyond Zero Emissions CEO Heidi Lee.

In the case of renewables and transmission line development, there are not transparent and consistent benefits for the people who will be most affected by those projects, but once those dealings are out in the open the debate shifts from whether people have been short-changed to a broader discussion about what is fair and reasonable given the project at hand.

Developers such as WestWind Energy are leaning into that kind of openness with its WiRES project, where it’s openly stated what the community and individual benefits will be for people who live near the proposed 100km transmission line.

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State planning

In a move that will be anathema to many neoliberal thinkers in Australia but is a near-constant refrain from some sections of clean energy industries, coordination at national and state levels may be required to get the country to the next level of energy transition.

“We don’t have enough to do absolutely everything. We need to put all major projects in a sequence, do one finish it and then move on to the next, and then use that milestone to turn off an emission source,” says Lee.

“It’s not about doing a little bit of everything… it’s about building out capabilities that Australia already has.”

That level of coordination at a national level — a staged approach based on the amount of emissions that could be turned off once each stage is finished — would not only relieve capacity constraints such as a lack of skilled people but also equipment shortages, she says.

It is an idea that Beyond Zero Emissions, in a report released this week, is recommending for a series of renewable energy industrial precincts it wants to see around Australia which would enable multiple different companies to share industrial infrastructure.  

Or as Brooksbank says, some national coordination would be a solution to a highly fragmented, complex rollout.

“For the transition to work, every part of the jigsaw has to fit together, but unfortunately each part of the jigsaw is being built by somebody else, being regulated by somebody else, being commented on by somebody else,” he says.