As ‘mid-scale’ generation technologies like commercial-scale and storage grow, so too do the opportunities for these to support the grid.

The challenge

Mid-scale generation and storage systems have the potential to play a significant role in supporting the grid. However, the rate of uptake of this potential resource is currently very low, meaning a huge opportunity could be being missed.

The response

The Clean Energy Council engaged leading consultants Entura to analyse opportunities to better integrate renewable energy generation and enabling technologies, while promoting the most economic use of distribution network assets. This study recommends providing the market with increased visibility on how to access available opportunities, including promoting business models that better enable embedded generation and storage to provide grid support.

Value could come in the form of deferring demand-related network augmentation by reducing peak demand on the network or improving reliability in key parts of the network. Despite the number of mid-scale generators increasing, relatively few systems are being deployed in a network-supporting role. This study has identified a range of contributions to this outcome.

It is clear from this analysis that the challenges are multi-faceted and there doesn’t appear to be an easy fix. However, given energy market reform’s long lead-times, it remains critical that consideration be given to creating incentives and market settings which enable network support in the future.

Outcomes for various industry stakeholders

This study assessed the potential for network support by engaging with key stakeholders, analysing common generation technologies and deployment configurations and undertaking a detailed analysis of related information, commercial and regulatory matters.

It is important to note that this work is not intended to critique current practices. Rather it is intended to analyse opportunities for improved approaches to the integration of renewable energy generation and enabling technologies that also promotes the most economic use of distribution network assets. Its findings and recommendations relate to a range of stakeholders in different ways.

  • The report has identified some clear areas for consideration when investigating network support options. These include ensuring that the accessible information is complete and sufficient early in the investigation process and understanding reliability expectations and matching generation and storage plant. 

  • Policymakers need to be aware of the structural incentives on both networks and generators in order to make significant advancements in the implementation of generation and storage systems. Despite the recent slow demand growth, energy market reform should not assume that recent changes are sufficient to address all of the challenges facing the use of generation and storage for network support. Rather the multi-faceted nature of these issues requires consideration of the suite of areas in order to identify an optimum outcome.

  • As significant stakeholders in this debate, DNSPs should look to engage potential suppliers early in the planning process and encourage innovative solutions from suppliers. Contractual arrangements should act to encourage innovation and enable suppliers to participate. Correspondingly, the opportunities for expanded mapping tools and information availability should be explored and ultimately embraced as potential engagement tools.

  • Although consumers are not the target audience for this study, households are clearly making significant investments in new generation and storage devices. This investment is largely occurring in the absence of any alignment to network investment needs, and this situation is likely to continue for the foreseeable future. This study has revealed that while there may be an opportunity cost in not providing network support, the specific circumstances of any particular generation or storage project will require careful consideration in order to understand the opportunities available to it. 

The role of this study in the FPDI program

This task fits within the FPDI project’s 'Regulatory and Economic Frameworks' work stream which aims to draw together the perspectives of industry stakeholders to provide an accurate assessment of the regulatory challenges facing distributed generation or storage, and how current incentives and business models could be structured to achieve efficient deployment of the technologies.

It will identify and promote solutions to the efficient integration of mid-scale generation into distribution networks in a network supporting role. It complements the work undertaken already in on a valuation methodology for the contribution of distributed energy resources to networks.