NETWORK OPPORTUNITY MAPS Informing collaboration for Decentralised Energy Chris Dunstan & Ed Langham Webinar, 3rd Aug 2016

1.  Context: Information for a new era

2.  The Project

3.  The Maps – live online

4.  Future Opportunities

OVERVIEW

CONTEXT

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THE DECENTRALISED ENERGY REVOLUTION HAS BEGUN

TIME OF TRANSFORMATION: CONSUMPTION IS FLAT

isf.uts.edu.au ANNUAL ENERGY FORECAST FOR THE NEM (June 2016 NEFR)

And the RET: Add another ~16,000 GWh p.a. by 2021

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WIND IS VERY VARIABLE…

… AND SO IS SOLAR… (SOLAR PV OUTPUT)

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THE DREADED “DUCK” CURVE Official CAISO “Duck curve”

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NSW MAXIMUM DEMAND – FORECAST FLAT

Source: 2016 AEMO National Electricity Forecasting Report (NEFR) (June 2016)

First ever declining long term forecast for max demand…

NSW MINIMUM DEMAND – FORECAST FALLING

Source: 2016 AEMO National Electricity Forecasting Report (NEFR) (June 2016)

“minimum demand [shifting] from overnight to near midday ... This is already the case for South Australia” -AEMO

Vic. MINIMUM DEMAND – FORECAST PLUMMETING

Source: 2016 AEMO National Electricity Forecasting Report (NEFR) (June 2016) 0

S.A. MINIMUM DEMAND – Less than zero!?

Source: 2016 AEMO National Electricity Forecasting Report (NEFR) (June 2016)

0

Demand as Variable as Renewables

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WILDCARDS: CLIMATE POLICY & ENERGY EFFICIENCY •  Paris Agreement: To keep global temp. rise "well

below" 2oC & "endeavour to limit" rise to 1.5oC •  Net zero emissions by 2050 to 2100

isf.uts.edu.au IEA, World Energy Outlook 2015

“Bridge” Scenario for 2oC

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SO WHAT DOES ALL THIS MEAN? 1.   More  variable  genera/on  2.   Greater  geographic  diversity    3.   Radically  shi;ing  local  supply  and  demand  pa>erns  …which  means  1.   Major  changes  to  price  structures  required  2.   More  flexible  demand  essen<al    3.   Local  solu<ons  essen<al  …which  means  1.   Construc<ve  customer-­‐u<lity  collabora<on  is  essen<al    2.   Regulatory  reform  essen<al  

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ELECTRICITY NETWORKS: LOCATION & TIME CRITICAL

Networks comprise ~43% power bills (nationally)

Network costs are highly location & season specific

Mapping can help identify priority areas for non-network alternatives (Decentralised Energy)

Electricity prices in the NEM (2014-2018)

Source: AEMC, 2015 Residential Electricity Price Trends December 2015, Sydney

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THE CHANGING ELECTRICITY SECTOR

The past Centralised generation Centralised control Demand Forecasting Build least cost infrastructure Little engagement with customers (end users)

The future +  Decentralised generation +  Decentralised coordination +  Demand Management +  Support least cost supply & demand side mix →  Extensive engagement with customers (& retailers & service providers)

How  to  deliver  a  win-­‐win  for  networks  (NSPs)  and  customers?  

BeOer  informa<on  &  collabora<on  are  crucial    

Magnetic Island Solar City Project 2007: Rapidly rising demand Leading imminent need for a 3rd undersea cable ($18 million) Invested in efficient lights, energy audits, 200 solar PV systems, 1500 smart meters, etc Cut peak demand 44% below BAU Cut energy by 40% below BAU Deferred new investment >8 years Budget: $30 million (n.b. demonstration project)

http://www.top100experiences.com.au/listing/magnetic-island/ Image credit: Tourism Queensland

ERGON ENERGY: MACKAY CONSTRAINT PROJECT (2013>)

•  $36 million proposed investment •  1.4 MVA of load reduction •  Deferred capital costs: $1.7 million

in 2014/15 •  Used “Network Capacity Incentive

Map” driven by Ergon’s “Develop the Market principle”

Source: DM Outcomes Report, 2014/15

ERGON ENERGY: MACKAY CONSTRAINT PROJECT (2013>)

•  Incentive Value: $300/kVA

How can we facilitate this sort of collaborative approach to Decentralised Energy

throughout the NEM?

THE PROJECT

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Where  within  the  electricity  network  do  the  most  

cost-­‐effec3ve  DE  opportuni3es  exist?  

How  much  could  DE  be  worth  at  these  loca3ons?  

When  are  the  key  years  and  3mes  of  constraint?  

To  answer  these  ques3ons,  ISF  created  Network  Opportunity  Maps  

A resource to show where/when to target Renewable Energy and DE technologies & services: •  Annually updated through streamlined process •  Consistently applied in every (NEM) jurisdiction •  Freely available on online platform •  (Ultimately) woven into Networks’ Demand Side

Engagement Strategies

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NETWORK OPPORTUNITY MAPS

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NETWORK OPPORTUNITY MAPS

(+ All Network Businesses in the NEM!)

PROJECT TIMELINE

Sample Maps

(Oct 2015)

1st Full Iteration

(July 2016)

2nd Full Iteration

(Mid 2017)

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2016 distribution data (July) 2016 transmission data (Sept)

WHAT DATA GOES IN?

•  All data comes from Network Service Providers •  For 2016 Maps: generally as published in 2015 Distribution Annual

Planning Reports, and 2014 Transmission Annual Planning Reports •  Proposed network investments (augmentation, some replacement/other) •  Cost of capital (WACC), depreciation •  NSP demand forecasts for each network asset •  Current capacity of lines and substations •  Zone substation region boundaries (+ how different assets connect) •  Hourly load data (load profiles)

THE MAPS: ONLINE

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ANNUAL DEFERRAL VALUE CALCULATION

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÷

x ( + )

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CASE STUDY: Kangaroo Island •  Population: 4300 Peak Demand 7.6 MW Load factor: 46% •  Undersea electricity supply cable nearing end of design life •  Replacement cable cost: ~$45 million, plus energy purchase from the mainland •  SA Power Networks has issued a request for Non Network Options •  Diesel standby generation expensive

and difficult to support •  Good wind and solar resources •  Regulatory and other challenges

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INDICATIVE NON- NETWORK SOLUTION

Illustrative option • 8 MW wind turbines • 4 MW centralised solar PV • 4 MW rooftop PV (50% subsidy) • 3 MW battery storage Ø  co-located w solar PV- 70% subsidy

• 21% Energy Efficiency (subsidy @$50/MWh) • 3MW Diesel Rotating UPS /Standby generation

Ø  3% load factor

•  (+ option of 5 MW of biomass generation?)

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http://www.australia.com/content/australia/id_id/places/kangaroo-island/jcr:content/hero/image.adapt.1663.medium.jpg

INDICATIVE NON- NETWORK SOLUTION

Outcomes: • Indicative total cost: $50m Ø  same as cable (but invested on the Island)

• Additional opex on the island: $1.2m p.a • Annual savings to Kangaroo Is customers: $3m p.a. • Additional generation and REC revenue: $3.8m • 97% Renewable Energy (Bioenergy or more storage for the other 3%?)

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EXAMPLE TIMELINE WITH RIT-D VS NETWORK OPPORTUNITY MAPS

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Investment Decision

2012 2013 2014 2015 2016 2017

RIT-D Market Activity

Network Opportunity Maps

Market foresight & activity

THE NEXT FRONTIER

It’s exciting but there are more ways to reveal value in the grid… •  Non-network opportunities for replacement expenditure

(repex). Requires: •  More repex data in the Network Opportunity Maps •  Develop and standardise processes for non-network alternatives

for repex investments •  Incorporating probabilistic planning principles –

ameliorating risk

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FUTURE OPPORTUNITIES •  Additional DE Resource Overlays: A public resource to

match network opportunities with cost effective alternatives to network augmentation: •  Other renewables (e.g. bioenergy, PV/storage, EVs) •  Other dist. generation (co-/trigeneration etc) •  Demand Response •  Energy Efficiency

•  Addressing other issues such as distributed generation connection capacity, or voltage management

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THANKYOU

Explore the maps: http://nationalmap.gov.au/renewables/ [click ‘Add data’, ‘Electricity Infrastructure’, ‘Network Opportunities – ISF’]

Reminder: 2016 Transmission Data Update Coming in September!

Ed Langham

Research Principal edward.langham@uts.edu.au (02) 9514 4971, 0403 820 913

Chris Dunstan

Research Director chris.dunstan@uts.edu.au

(02) 9514 4882, 0419 498 434