Customers have the power in the shift to solar and batteries, they just don’t know it yet

Right now, many Australians are probably feeling quite powerless when faced with rising interest rates, energy costs and the economic uncertainty making life a little uncomfortable.

By contrast, about 30 per cent of Australian households may feel they have more control and certainty during this period. These would be people living in households that have solar PV and are feeling empowered by their energy independence.

Over the last few years, they have unknowingly become active market participants, dictating how their distributed energy resources (DER) should be used and in that process, transforming the grid with their DER.

Unknowingly, their small acts – such as connecting their battery to a virtual power plant, joining an electric vehicle charging infrastructure, or signing up with an energy retailer for a demand response program – all adds up to show the growing appetite Australians have to be active participants in the energy market.

This is further backed by research commissioned by the Energy Consumers Australia (ECA) that shows nearly three quarters of Australians surveyed support the upgrading of the network to accommodate the growth of solar energy.

The research has also highlighted that more than one third of Australians surveyed intend to purchase an electric vehicle or install a home battery in the future.

As consumers open their DER to support local network requirements, they have gone past the ‘conventional’ way of just having the grid deliver electricity. With DER increasingly becoming more connected with smart technology and software, the industry is piloting trials to integrate these assets more effectively through new types of relationships to capture their real value for all stakeholders.

But we cannot rely on DER alone to reshape the grid. It needs to work in concert with other assets, new and old – and this is how trials are creating opportunities for new models of energy services to be delivered.

Taking energy consumers on a new journey

With the integration of more DER to the grid in the short term, we are seeing a collision of the interest of consumers, DER asset owners, retailers and DNSPs.

On one side, energy consumers are evolving from passive to active energy players, taking it upon themselves to add rooftop solar, batteries, and EV chargers.

We have over three million solar systems, more than 150,000 batteries, a growing number of EVs (20,000 in 2021) and nearly 2,000 public EV charging stations in Australia – and this is flipping the old paradigm of generators versus consumers on its head.

AEMO’s expectation is that over half of all Australian homes will have solar rooftop generation by 2032. By 2050, this could be 65 per cent and this will meet 20 per cent of the total underlying demand on the National Electricity Market (NEM).

This puts pressure on energy retailers, DNSPs and generators to move from being sole generators and controllers of the energy system to sharing and orchestrating assets. In this shifting of power, this will lead to a collision on the grid as everyone, including households with DER, take an active role in the energy market.

The challenge will not just be about control, it will be about bringing these DER owners along for the ride and making it win-win-win for asset owners, retailers and network operators. We believe the solution is to enable and create new partnerships between energy companies and customers.

This will mean taking small technical steps with limited risk and bravely rolling out big pilots at scale with a committed path to be operational and not just developing trials.

Through an agile approach, these small steps will ensure we are adding new services and capacity to the grid, making networks flexible and supporting the continued growth of DER.

To achieve this, we will need to create new partnerships between energy companies and customers that will help us to achieve agility, manage risk and scale deployments.

We will also need all participants to relinquish some control, live with uncertainty while carefully managing the possible impact this may have on the grid.

These partnerships will enable a new approach that gives energy companies the tools they need to securely integrate more DER where everyone – both small and large players – have a profitable role to play in building a cleaner, more efficient grid.

With DER bringing flexibility and localised energy generation, we can improve the overall systems efficiency, decarbonise the grid and deliver better outcomes for energy consumers, DER owners and all other stakeholders through a new partnership.

Transforming the grid with technology

We have been working on the transition to the distributed grid for the last seven years and our customers would have primarily engaged with us to manage energy costs and behind-the meter grid constraints. But this is all changing.

Over the last 12 months, SwitchDin has been working with our customers on trials to help them better integrate their grid to support new rooftop solar, home batteries, community batteries to EV charging networks that need to be managed. Through these projects, it has reinforced the urgency ahead for the problems we need to address now.

Today, we’re delivering on projects ranging from dynamic operating envelopes in South Australia, Victoria, Queensland, Western Australia and the Northern Territory, to aggregated small and medium scale DER participating in national VPPs in the NEM at multi-MW scale.

The solar hosting capacity in WA and Queensland microgrids have also been extended with our technology to enable more rooftop solar by orchestrating previously unmanaged assets.

Community batteries are providing local system strength and enabling new market services in the NEM and WEM. All of these projects are based on the same underlying technological capability, orchestrating behind the meter and front-of-meter assets ranging from 5kW to more than 10MW.

Quite often we get asked what the future grid looks like? We think William Gibson answered this well for us: “The future is already here, it is just not very evenly distributed”.

We’re still on a journey to create a grid that is built on a model of partnership and the need to distribute the future more evenly together with consumers is even more pressing.

Marc Sheldon is the COO of SwitchDin