A ground-breaking trial seeking to crack the riddle of how to manage huge amounts of rooftop solar generation without hitting the big solar switch-off button, or hitting customers with a sun tax, has been doubled in size.
Engie says its retail electricity business in South Australia has been given the all-clear by SA Power Networks (SAPN) to expand its flexible exports offering from 50 to 100 customers, over the 12-month trial.
The trial builds on South Australia’s nation-leading efforts to manage the increasingly common oversupply of rooftop solar during the middle of sunny days when high levels of generation meet low demand.
Engie says its residential customers who have joined the trial – so far there are 40 – allow the retailer to adjust the amount of energy exported to the grid from their rooftop solar panels when there is too much supply, and prices are negative.
Importantly, these customers are compensated for doing so.
Engie’s general manager of retail innovation, Ryan Wavish, says this is a “win-win situation,” because the electricity retailer is no longer double-paying – that is, paying the customer a solar feed-in tariff and then paying the cost of exporting it into a market with negative prices.
“At the same time, our customers are compensated more than they would’ve earned for exporting their excess solar power through solar feed-in tariffs,” he says.
A further win-win is between the network and customers – and not just those with solar – with market led curtailment able to relieve congestion and reduce the need for costly grid upgrades, putting downward pressure on prices.
“The ability to manage these excess solar times… reduces the need for further investment in [network] infrastructure to manage those extremities, so it saves on both network and wholesale costs,” Wavish tells One Step Off The Grid.
“So yes, the broader customer base does benefit from these kind of solutions.
“There has been a lot of discussion about the possibility of a ‘solar tax’ – or households being charged for exporting their excess rooftop solar during periods of oversupply – but we are flipping this for customers,” Wavish says.
“This … trial is proof that an innovative retailer like Engie can instead help customers earn money from their solar curtailment.”
South Australia forges a path
It was nearly two years ago that South Australia became the first state in Australia, and possibly the first in the world, to roll out flexible export limits for homes with rooftop solar panels at scale.
On July 1, 2023, new rules came into play making it mandatory for all new or upgraded solar systems to be technically compatible with flexible export limits of up to 10kW.
Essentially, this means their inverters must be able to be remotely controlled and ramped up and down, to better suit the needs of the grid and manage new concepts such as minimum demand.
Households that opt in to flexible exports are freed from the state’s 5kW export limit and, most of the time, allowed to export the maximum amount the network and their inverter can handle, up to 10kW per phase.
Those households that opt out of flexible exports are limited to a set 1.5kW per phase export limit.
So far, much of the testing and fine tuning of flexible exports has been at the network level, including through a separate Arena-backed trial with SAPN and Victorian-based AusNet, alongside inverter companies Fronius, SMA, and SolarEdge, and energy management software company SwitchDin.
The focus is now shifting to how flexible exports will work at the retailer level – including through the current SAPN trial with Engie and AGL Energy.
Wavish says there are a couple of key reasons why South Australia is leading the way on rooftop solar integration, including that it has been the renewable energy version of “the canary in the coal mine,” with its world-leading shift to wind and solar generation.
“They were the ones getting the negative prices first. So that is where we most felt this, this cost pressure as a retailer in that market.
“But the second thing is the technology that SAPN has developed … is really quite sophisticated and effective in managing [rooftop solar] exports in a subtle way.
“So we’re obviously allowing customers to self consume as much as they can. It’s only the exports that are impacted, not not their ability to generate or self consume. So that’s a tick.”
The Engie trial
Engie’s Solar Advantage offer was created as part of the Market Active Solar trial led by SAPN and backed by funding from Arena as part of its Advancing Renewables Program.
The trial offer was initially limited to a maximum of 50 participants, but due to strong early interest it is now available for up to 100 participants.
Customers must be in South Australia and be signed up to SA Power Network’s Flexible Exports connection option.
Wavish stresses that, at this stage, participation in the trial is by invitation only and subject to “quite material eligibility criteria around the flexible export campaign.”
But Engie hopes that by the end of the trial, towards the end of this year, it will be able to roll the retail offer out more broadly.
“So far, all the customers that have started on the trial are still on the trial and … the feedback has been positive,” says Wavish.
“The other the other thing is the technology is working. So we can see the exports being curtailed in line with the market prices.
“We set a market price, which is a trigger …well below negative,” he adds. “I think there were over 2000 hours of negative prices in South Australia last year and and we’re only curtailing up to 100 hours a year under this offer.
“So we had to pick the times to do it that are the most cost effective and we’ve been tracking that curtailment with the customers.
“We give them weekly updates on how much curtailment happens and how much they’ve been paid as a result.
“They’re all really happy with the outcomes that they’ve achieved so far, so we’re encouraged by that and hoping that, at the end of the trial, we can expand the eligibility to more customers in South Australia.”
A new take on solar feed-in tariffs?
“We think that with solar feed-in tariffs reducing to almost nothing, this actually presents an opportunity for customers to be rewarded … for their excess solar generation in a different way,” Wavish says.
“If they can’t have access to a battery, this is an alternative way to manage their solar exports that is responding to a market signal [and] therefore enables them to be rewarded for that response.
“Our hope under this trial is that we can show that, with the retailer involved, not only is the customer being reimbursed, but the need for network … curtailment is reduced… because the retailer is sort of doing it under more commercial terms. So that’s our hope.”
Avoiding the big solar button
Before South Australia introduced flexible exports, it was also the first state in Australia to introduce an emergency backstop mechanism.
The Remote Disconnection and Reconnection (RD&R) emergency backstop for rooftop solar (aka ‘the Big Solar Button as Dr Nick Engerer of Solcast dubbed it) allows rooftop solar systems to be remotely switched off en masse if ordered to do so by the market operator (AEMO) in cases where grid stability is at risk.
This mechanism of last resort came into play in 2020, making it mandatory for all new rooftop solar systems installed in the SA to use compliant inverters and appoint a “relevant agent” approved to remotely control the inverters under instruction from AEMO.
As well as being the first state to introduce the big solar button, South Australia was also the first state to hit that button, on 14 March 2021 affecting around 12,500 households in Adelaide.
“South Australia… had a sort of more emergency type implementation that was very hastily implemented back in 2020, that was the time of this registered agent sort of approach, which was really more of a backstop mechanism,” says Wavish.
“And then in 2023 they implemented the flexible exports approach… and it was at that same time that we were talking to SAPN and saying, can we basically leverage off that technology and put our own curtailment signal through to customers in response to market prices, as distinct from their order conditions?
“Because us responding to market prices essentially enables us to pay customers for that service, because we are saving costs in the market from exporting into a negative price, so it makes sense for retailers to be able to send that price signal.”
Clearing hurdles
There have been challenges to this approach, though, including navigating the Australian Energy Regulator’s (AER) market ring-fencing rules.
“The reason it didn’t start last year was because we are effectively sharing SAPN infrastructure,” Wavish says.
“We are sharing the same integration pathway that they use for flexible exports for our Solar Advantage product [and] that comes under ring-fencing rules.
“So we needed to get the AER’s permission to share that infrastructure for this trial and and give that signal through the integration pathway.
“So that took a while, and we’ve now got that permission, and we’ve … now got permission to do it for 100 customers because [the trial has] gone so well.”
Looking ahead – and beyond South Australia
“I think there is a pathway to growing the scale of this offering, but it is limited at the moment in terms of its eligibility for the rest of the [National Electricity Market],” Wavish says.
“A lot depends on how [other states] proceed with these solar backstop mechanisms… if other networks have a sophisticated sort of approach, like SAPN, then it becomes more possible.
“But we would, as a retailer, we would argue that it’s better for the industry to collaborate and have a single sort of shared infrastructure access pathway, rather than every DNSP (distribution network service provider) doing their own thing and every retailer having to make integrations with networks and these ring-fencing complications.
“We see this as a really successful use case for a single sort of shared infrastructure hub which enables networks to send their their flexible export constraints and dynamic operating envelopes, and for retailers or aggregators to hook into, to send market signals to customers,” Wavish says.
“And I think there’s a potential for great efficiency in having a more of an industry wide infrastructure for for the interoperability of these assets, rather than this sort of piecemeal approach.
“So ultimately, we hope the trial can help the industry move towards that objective. …We think that this is an example where collaboration and shared infrastructure can actually work for customers.”
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
