Putting the power in Australians’ hands

A run of back-to-back ‘biblical’ summer weather conditions, along with sky-high living costs, are bringing Australians to the energy transition party.

It has already been shown that widespread rooftop solar reduces electricity bills for all customers as it floods the market with zero cost (to the market) electricity.

A run of back-to-back “biblical” summer conditions in Australia, (a summer of bushfires, three of floods, and another catastrophic bushfire season shaping up), the sky-high cost of living, and legislated climate-related targets, are dovetailing to bring Australians to the energy transition party.

Families and businesses are just in time to make the clean energy transition a reality – governments need to enable that. And the good news is most of the things that need to be done take leadership not money.

The federal government has set goals to be net zero by 2050 (requiring a 43 per cent reduction in carbon emissions) and to have 82 per cent renewable electricity generation by 2030.

The scale of renewable power generation (of all types and size) that will need to be built is unprecedented. To meet our 2030 renewable generation target, it is estimated we need a total renewable generation capacity of 79GW by 2030.

The transmission build that will be required to fully connect the new large-scale renewable generation is the equivalent of 25 per cent of today’s entire grid. In just seven years.

Achieving all of this has been made harder by the missteps that have already been made and the fact we are in a global race to decarbonisation.

But where Australia does excel – Distributed Energy Resources (DER) – rooftop solar to you and me – is a key contributor to our clean energy transition, and it could be the fundamental key to “winning” that clean energy gold medal.

Australia now has 21GW rooftop solar installed, and 25GW of large-scale renewable generation built. To meet our 2030 target, Australia now needs to add approximately 6GW of new renewable generation each year. The combination rooftop and large-scale renewable generation (and storage) development is almost meeting that annual requirement. In 2022, we managed to add 2.7GW of residential scale rooftop solar and 2.8GW of new large-scale renewable generation and storage.

Based on the small vs. large-scale weightings suggested by the market operator though, the latter is not keeping up its end of the bargain, and accelerating the build and connection rate of large-scale wind and solar generation is proving difficult.

There is a solution that would get us to the totals we need by 2030. Co-ordinated support for, and removal of impediments to, residential, commercial and industrial, and rental rooftop capacity, would make a step change difference to DER take up to take up this “slack” from large scale generation. This would be in the form of Federal Government programs and reforms in three key areas.

First, tackling “export” management issues. The future clean electricity system will need to be flexible, largely through management of the “excess” power generation being exported to the national grid. It is clear that, having taken control over their energy costs by making electricity themselves, customers are reluctant to let that go especially to entities that they do not trust – survey data show that only 6 per cent of customers are prepared to handover full control.

In addition, those with DER receive a financial return directly from their investment through using their own electricity and payment for the energy they send to the grid. As such, compensation for ceding control will need to at least match these benefits or we won’t have sufficient flexibility, or we won’t get the investment uptake.

Second, the government must force publication of network data to expose where there is capacity on the network. This will enhance competition and innovation, and reduce monopoly behaviour.

Finally, outdated network voltage standards must be brought into line with the accepted modern national and global standards, so that the grid has more capacity to accommodate DER. The grid is not about to collapse because it is sunny on the east coast – that is a myth. The voltage standards are out of date, out of step globally, and they are being kept that way because it suits the monopoly providers’ bottom lines.

In a nutshell, DER is not subject to the same development delays as large-scale renewable generation and batteries, or its associated transmission.

It has already been shown that widespread rooftop solar reduces electricity bills for all customers as it floods the market with zero cost (to the market) electricity, displacing large-scale generation, both fossil fuel and renewable.

Australians have demonstrated a significant appetite for household investment in rooftop solar by taking control of and reducing their electricity bills. Governments have the opportunity to give the clean energy transition power to the people, at little cost except to the business models of the slow lumbering regulated monopoly network service providers. What are they waiting for?

Stephanie Bashir is chief executive officer at Nexa Advisory.

Originally published as Putting the power in Australians’ hands