Electric energy sector evolution: predicted trends Wednesday, 05 July 2017

Opinion Piece by Jeff Allen FIEAust, Engineers Australia Fellow and member of the Electric Energy Society of Australia, NSW Chapter Committee.

Jeff Allen FIEAust has had an engineering and executive management career in the electric energy and related industries spanning almost 50 years. He has held various executive positions, including Managing Director/CEO, GM Networks and GM Network Services at Integral Energy; founding CEO of Energy Action Ltd; and, CEO of AK Power Solutions. For the past 17 years, he has consulted widely in Australia and New Zealand in the areas of network regulation and pricing, best practice asset management, business process re-engineering, procurement best practice and change management.

The growing decentralisation of energy production, mainly via solar and wind, is increasing the complexity of managing transmission and distribution networks. Australian Energy Market Operator modelling shows that decentralised energy will move from about 10% to more than 40% of all energy production in the national electricity market in the next 15 to 20 years. Hence, distributed energy resources (DER) are seen to be changing the role of a distribution network operator (DNO) to that of a distribution system operator (DSO). This move to a DSO role requires the use of active network management solutions, which involve smart metering, energy market oriented control and monitoring of distribution networks, distributed generation, microgrids, energy storage and customer installations – that is a complex ‘smart grid’.

Key areas for thought in regards to this shift are outlined below, including predicted trends in this rapidly evolving sector.

Distributed Energy Resources

Falling costs of both large- and small-scale renewables and other distributed energy resources are driving their rapid deployment. Wind and large-scale solar PV are rapidly coming down in price, as is small-scale PV. As an example, the solar cells which were $US 75/watt in 1980 are now $US 0.40/watt and these prices could well come down further. The changes in the mix of electricity generation require new methods for managing system security, such as frequency and stability. In addition, the dynamic behaviour of the distribution system, specifically two-way flows of energy, provides new challenges for effective transmission and distribution network planning and operation.

Customers

Customer choices are more directly driving investment trends by increasingly valuing services that use energy, such as home heating, cooling, water heating, vehicles and pool pumps, among many others. Commercial and industrial customers are also pursuing more energy efficient options, such as improving energy efficiency of buildings, reducing electricity demand during high-cost periods and monitoring energy consumption in real time to better understand how to reduce their energy costs. We are seeing a step change in how commercial and industrial, as well as residential, customers participate in meeting their energy supply and demand requirements through distributed resources, including solar panels, electric vehicles, automation and storage. The rise of shopping centre ‘micro-grids’ is one example of these changes in customer behaviour. The economic incentives provided by more efficient tariffs implemented with smart meters and active energy monitoring will also drive these changes.

Smart network

The operation of distribution networks will become much more dynamic and unpredictable with the connection of numerous new devices at the lowest voltage levels and hence the need for increased monitoring and control at all levels, thus the IoT concept will expand. Strong cyber security strategies will be essential to mitigate risks of damage and unauthorised use or exploitation of information and data.

Greater electricity market participation

The requirement to provide access to the electricity market for customers and new market participants will continue to increase for both local generation and demand response.

More sophisticated planning and control

Power system resilience will continue to be critical. Instead of reinforcing existing systems by traditional means of grid strengthening, resilience planning will need to consider mechanisms using the increased flexibility provided by the diversity of disaggregated control options, the use of storage (for demand management), and will require sophisticated network monitoring to respond to system constraints using lower-cost operational measures.

Best-practice asset management

Good asset management processes and systems will need to be in place to ensure that the business fundamentals are not overlooked with all the changes that are occurring across all aspects of a network business.

Work health and safety implications

Good health and safety regimes will also be required to ensure the safe operation of the increasingly complex network components and the associated control and monitoring systems for safe outcomes for all stakeholders.

As well as the above engineering related issues, the future will require an increased need for multiple stakeholder awareness and interaction and a much broader and more diverse set of workforce skills for the success of the increasingly complex and diversified DSO business.

Jeff Allen FIEAust is involved in arranging the technical program for the EESA NSW Electric Energy Conference 2017, where these issues will be among those discussed by key industry figures who will share their ideas on the important changes impacting electric energy and associated businesses. The conference will be held on Wednesday 6 September 2017 at Dockside Conference Centre, Sydney. Visit the Engineers Australia website for more information on the conference.

Main image: stock image.

Image inset: Jeff Allen FIEAust.