The introduction of new rules to ensure smarter use of off-grid technology could save customers over $1.7 billion in costs and provide a more reliable service to rural customers.
An analysis released by the Energy Networks Association (ENA) and CSIRO, as part of their Electricity Network Transformation Roadmap program, assesses the role microgrids and stand alone power systems could play as alternatives to traditional grid infrastructure.
Speaking at the Re-Powering NSW energy conference, ENA Chief Executive Officer, John Bradley, said the study highlighted the need for new rules so that networks weren’t forced to connect customers at a higher cost than necessary.
“This analysis to 2050 finds a physical grid connection provides a better service at lower cost for most customers, but the cost and quality of stand alone systems is improving rapidly,” Mr Bradley said.
“At the grid edge, almost $700 million could be saved by supplying 27,000 future rural farm customers with a stand alone power system rather than building more poles and wires.
“By 2050 these customers could be supplied more cheaply and reliably with stand alone systems using 2GW of solar PV or more than twice Victoria’s solar PV capacity today and 7.5GWh of battery storage.”
Mr Bradley said that if networks connected these customers with stand alone power systems the lower costs would reduce the bills of other customers who cross-subsidise rural connections.
“These rural customers are supplied at the uniform network tariff, which makes it unlikely they will have a financial incentive to install their own stand alone system,” Mr Bradley said.
“However, their network provider can support customers at the grid edge in smarter ways with savings to all customers and often a more reliable service for the rural customer.
“Australia’s needs modern rules for this to happen as most customers are effectively required to be connected to ‘poles and wires’.”
Mr Bradley said the analysis also assessed the scope for general customers to ‘leave the grid’ finding it could be economic in the 2030s for some customers.
“By 2050, the analysis shows up to 10 per cent of customers could leave the grid using a stand alone system and that would result in higher costs for other customers,” Mr Bradley said.
“Customers with the ability to self-supply could be offered ‘win-win’ incentives to stay on-grid while operating in island mode during peak demand events.
“The analysis finds that incentivizing customers with onsite resources to stay grid connected could save all customers over $1 billion in network charges between 2030-2050, equivalent to 4 per cent per annum on average network bills.”
