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Energy & Grid Management
Arushi Sharma Frank
Arushi Sharma Frank
 · Posted in Energy & Grid Management

A New Study from Australian Utilities Explains How to Save Consumers Billions via Integrated Distribution System Planning with DERs

For U.S. utilities, the questions of #LVgrid readiness and expanding distribution system utilization and asset life is a necessity, not an exploration. Commercial businesses and residential customers are accelerating rooftop solar adoption, anticipating both higher electricity rates and a higher incidence of #LVGrid outages. In turn, the utility systems which serve U.S. homes and businesses must leverage the best tools to plan investment scenarios that maximize the benefits to the system of decisions that consumers are already undertaking. This means, distribution system monitoring and planning to better utilize existing distribution capacity, motivate economic development through incentives for commercial and residential self-supply, and invest in distribution system longevity and visibility to support bi-directional power flow from installed battery storage capacity. In this article, you'll learn about the comparative solar penetration rates in Australia v. the U.S., how the Australian utilities are handling that growth, the importance of integrated distribution system planning, and how DOE is supporting this approach to planning through new tools and trainings being made available to utilities nationwide.

Synopsis: 

Utilities and system planners are questioning how U.S. distribution system maintenance and investments should be planned for lower-voltage grids that must be ready to accomodate the rising interconnection of small-scale solar, batteries, EVs, and everything in between. A new study from Australia's wires companies about accomodating #DER growth provides excellent benchmarking insights as U.S. utilities prepare for similar growth that Australia has already experienced. It utilitizes Integrated Distribution System Planning, a discipline in which a poles-and-wires utility plans spending on its owned systems only after integrating comparative costs and benefits of spending that capital on alternatives already available: distribution-connected storage solutions, commercial solar, VPP, community microgrids, and improving utilization of existing distribution capacity with #LVGETs instead of expanding/overbuilding it. The report's key takeaway is that consumers could save billions with intelligent planning for the #LVGrids where most of the consumer-driven cleantech investment is coming: i. utilize the full availability of the distribution system, ii. leverage and incent behind-the-meter solutions and distribution-connected storage and microgrids, so as to iii. avoid a prolonged and costly energy transition.

Background and Stats

  • Rooftop solar accounts for 11.2% of Australia’s electricity supply today (the second largest source), and with all other solar (utility scale, ground mount) is 14% of total supply. The US by contrast today only generates about 4% of its total electricity from solar (combining utility scale and commercial and residential rooftop), and within that, rooftop residential reached 36 GW, 1.5% of the total US nationwide electricity consumed (per 2022 numbers).
  • Residential households installations in Australia catapulted in 2023, reaching 31% of Australian homes per 2022 data. The one-in-three homes number is a common estimate of how quickly adoption will trend upward. Similarly in the U.S., 2023 was a big year for solar: a 51% percent install increase over the prior year, 80% of that being utility-scale (see graphic). As of 2023, about 5% of single-unit housing in the United States was equipped with solar panels (approx. 5 million homes), but in ten years, that will more than triple by current estimates.
  • For U.S. wires companies, the question of Low Voltage Grid (#LVgrid) readiness and expanding distribution system asset life with Low Voltage Grid-Enhancing Technology (#LVGETs) is a necessity, not an exploration. Residential and commercial business ratepayers are incorporating rooftop solar, anticipating both higher electricity rates and a higher incidence of local distribution (low-voltage grid) outages. (Remember outage management with solar means adding a battery or installing your solar as off-grid, not grid-tied).
  • Areas in the U.S. that have experienced weather-induced crises see faster adoptions of rooftop solar with batteries and commercial off-grid arrangements.
  • Real estate companies get it too - the largest and most prominent industrial park developers in states like Kansas, Pennsylvania, and Texas offer solar roof capacity development to secure a better deal for commercial tenants, like NorthPoint in Dallas, TX. More deals are also happening nationwide to pack rooftop solar on well-suited flat roofs for large, people-serving facilities like warehouses, superstores, and houses of worship. Warehouses "alone have the potential to host 185 TWh of generation each year, enough to power over 19 million US homes. More than 100,000 large retail buildings across the United States could host enough power for the equivalent demand of another 8 million homes."

The Australia Wires Report - Integrated Distribution System Planning

"The Time is Now: Getting smarter with the grid," is a new report commissioned by Energy Networks Australia (ENA), an industry group that represents the swath of poles and wires companies across distribution and transmission functions. ENA presents the thesis as, "the distribution grid is under-utilized. It can do more of the heavy lifting. The time is now."

The report's key takeaway is that consumers could save billions with intelligent management tools for the #LVGrids where most of the consumer-driven cleantech investment is coming and more focus on i. utilizing the full availability of the distribution system and ii. leveraging and incenting behind-the-meter solutions, so as to iii. avoid a prolonged and costly energy transition.

The study utilizes Integrated Distribution System Planning (IDSP), a discipline that puts together all the siloed energy policy strategies we like to talk about to the exclusion of one another, in the same bucket, and derives a holistic value proposition focused on the ultimate goal: consumer rate savings.

The study collectively considers electricity wholesale and network (T&G capacity) costs and costs borne by consumers when investing in behind-the-meter resources like rooftop solar, batteries, or electric vehicles. It introduces a new tag line for IDSP, calling the exercise an "All Levers Pulled" scenario, and finds that with active investment in distirbution system management and behind-the-meter solutions, consumers could avoid $7 billion per year in total energy system costs compared to a more prolonged transition, while ensuring the achievement of Australia's 82% renewable energy target.

Key findings:

  1. Community Generation: An additional 7 GW of "community generation" could be connected to the distribution grid by 2030, utilizing existing capacity at the sub-transmission level [1].
  2. Rooftop Solar: The scenario projects an additional 5 GW of rooftop solar by 2030, focusing on commercial & industrial facilities and residential premises, particularly targeting rental properties and low-income households [1].
  3. Distribution Grid-Tied Battery Storage: 5 GW of distribution-connected battery storage could be added by 2030, leveraging existing land and connection points on distribution networks [1].
  4. Consumer Energy Resource Coordination i.e. Virtual Power Plant centralized management of #DERs: market design should support distributed energy resources to work together efficiently in response to price signals, reducing strain on the grid, lowering costs, and maximizing the benefits of #DER energy and load reduction for all consumers. If coordination is not achieved, the study anticipates "$37bn more will need to be invested in network assets between 2030 and 2050. As a result, consumers will wind up paying substantially more in electricity system costs (ultimately meaning higher bills) than a more coordinated system."

Recommendations:

  1. Incentivize microgrids within larger distribution networks: Allow distribution networks to establish and operate local energy hubs for community benefit. (This refers to in-network microgrids: a designated area within a distribution network where policies and investments are focused on maximizing local energy generation, storage, and usage. The concept aims to leverage existing distribution assets more efficiently and create benefits for the local community).
  2. Pay Storage for Injection Value to local distribution grid: Better utilize the capacity of batteries connected directly to the local grid (i.e VPP injection value for #DER #batteries tied to the distribution grid and behind the meter)
  3. More commercial rooftop solar: Provide incentives for commercial operators to install more solar panels on existing rooftops.
  4. Make public charging a distribution service: Classify curbside EV chargers as a distribution service to improve charging access.
  5. Coordinated VPP, Better Price Signals and DER Orchestration: Sync resources to the grid in a coordinated and flexible way to share benefits with the community.

The report highlights that these actions are achievable with existing assets, workforce, and resources. By implementing these recommendations, the average Australian household could save around $160 per year on their energy bills.

Integrated Distribution System Planning is planning that will save customer costs by embracing rather than avoiding the value of #DER solutions available today: "The local grid customers need today, and beyond, is so much more than just its poles and wires. By embracing these recommendations, we can harness the full potential of our energy resources and deliver substantial benefits to customers."

-- Quoted text from ENA Press Release

A gold-mine of information about IDSP is available for persual throug the U.S. Department of Energy (DOE), building on a tool released by Berkley National Labs under the leadership of Lisa Schwartz. The confluence of activity across continents is an excellent reminder that we have the knowledge and toolsets to know what is coming and prepare for it - all is far from lost, and we can be well ahead of the curve if IDSP is used to appropriately value #DER #solar #microgrids and #storage in utility distribution planning processes.

Quick View - Lawrence Berkeley National Labs IDSP Decision Framwork

"Integrated Distribution System Planning (IDSP) provides a systematic approach to satisfy customer service expectations and state and utility objectives for grid planning and design. It addresses grid reliability, resilience, safety, operational efficiency, and integration and utilization of distributed energy resources and includes a grid modernization roadmap. We provide education, training, and technical assistance on IDSP for public utility commissions, state energy offices, utility consumer advocates, and other state decision-makers. We also conduct research aimed at advancing planning practices. For example, see our data visualization on state distribution planning requirements." LBNL Website.

"Transformation of the electric distribution system is a new reality as our nation advances to a more sustainable energy future. At the grid edge where utility customers are adopting new technologies, such as rooftop solar, battery storage, smart thermostats, and electric vehicles, the evolution of the electric grid is apparent. To ensure effective and reliable grid operations, the U.S. Department of Energy (DOE) is partnering with states and the electric utility industry to develop guidelines and share best practices to assist in the formulation of strategies for distribution system investments. Sharing these materials is the focus of a new DOE website, Distribution Grid Transformation." LBNL Website.

Image Attachment

"About the Framework", available at https://emp.lbl.gov/projects/integrated-distribution-system-planning 

 

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Screencapture: Iteractive Decision Framework for IDSP, available at https://emp.lbl.gov/projects/integrated-distribution-system-planning 

[1] L.E.K. Consulting. (2024). The Time is Now: Getting smarter with the grid. Energy Networks Australia, https://www.energynetworks.com.au/assets/uploads/The-Time-is-Now-Report-ENA-LEK-August-2024.pdf

[2] van den Berg, D. (2024, August 8). Unlocking local opportunity to solve a global challenge. Energy Networks Australia. https://www.energynetworks.com.au/news/energy-insider/2024-energy-insider/unlocking-local-opportunity-to-solve-a-global-challenge/

 

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