Distributed energy – the invisible side of the grid

In 10 years our energy system will be completely unrecognisable. The industry responsible for our quality of life is in the middle of a huge transition and some of Australia’s largest organisations are getting in the action. However, as is the case with any major market transition, amongst those caught in the pack there will be winners and there will be losers.

Despite the stark political divide Alan Finkel’s “Electricity Market Review’ has drawn within the Liberal party, the mist seems to finally be clearing around Australia’s emissions reduction policy. As the Government now agreeing to 49 of the Finkel report’s 50 recommendations, the foot has hit the accelerator pedal and this industry transformation has become ever more relevant. It is now the task for organisations to align their strategies to Australia’s energy policy trajectory.

Among the cluster of trends highlighted within the report, there is one that has particularly interesting national implications. As also shown by the New Energy Finance study by Bloomberg, up to 45% of Australian capacity could be “behind the metre” by 2040 and Australia’s electricity system may become one of the most decentralised and distributed in the world.

Maintaining the Distributed System.

What makes distributed energy resources (DERs) so curious is that they represent a new paradigm to utilities and regulators alike. Being distantly located, operated and owned, they are the hermits of the grid.

Unlike power-plants which are managed through a ‘life-cycle’ and are constantly maintained by engineering teams to guarantee their output capacity, the operation of these hermit generators currently lies with consumers and 3rd party agents. Be it wind, solar or hydro, DERs are representing an increasing proportion of Australia’s energy mix and our national energy security relies ensuring they are maintained over the long-term.

In the same way schools vaccinate children use herd immunity to prevent the outbreak of dangerous diseases, we will need to invest the long-term health of our decentralised generation capacity or face epidemics of grid unreliability down the line. The fact is that achieving this is no simple task as distributed generators are spread out over our metropolitan and rural areas, can involve complex ownership models and are typically operated independently to the rest of the grid.

The growth of distributed generation is a vehicle without a driver but there is one key resource that will put us back in control of the wheel…Data.

The Gap in our National Capability.

‘Data is the new oil’ is a fitting phrase considering the energy context here. Data is the key resource needed by governing bodies to track and control an energy system of such great complexity. While we await the Data Strategy for the NEM due end of 2017, it is important that we think about the data opportunity more broadly.

With the emergence of increasing IoT technologies can play an important part in generating the data desperately needed to unveil the invisible side of our distributed energy system. IoT sensors can measure the state of the various distributed energy assets and communicate data to systems for monitoring and analysis. Predictive service management systems would then be able to trigger service orders when the conditions deviate from an acceptable range. Further data aggregation and analysis with reference to similar assets would allow the anomaly detection to grow in intelligence over time.

How do we get there?

However to achieve these grid enhancements a structured transition is absolutely necessary; if this evolution was a book it would have three chapters.

In the first, a wide variety of networked sensors and control devices would be deployed across the grid with the ability to communicate via standards-based protocols. The data generated will would provide utilities, regulators and consumers, let’s call them the gang of the three, information about the state of the grid at any point in time.

In an overlapping section, platforms that can consume and analyse this data would be developed. These systems would interconnect a variety of resources and allow the gang of three to achieve insight into grid operations and customer interactions and act upon those insights. It would be during this phase that Service Management Systems emerge as a way to efficiently maintain all elements of the network including the distributed resources on a per need basis.

The final chapter would go a step further. The gang of three would become capable of using the data made available in the previous phase to adjust their behaviours and make informed decisions around their power usage, generation and capital expenditure. For example, a utility may be able to evaluate which assets to deploy where based on need and expected profitability.

Within uncertainty there is opportunity, and within a structured approach consumers, firms and regulators have the clarity to act. With national governance still being established, service models not yet defined and gaps in capability there are opportunities for firms to enter this space, shape the landscape and offer solutions.

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