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Cost-Effective Distributed Energy Systems in Australia

Posted in Opinion, Research by Kate Archdeacon on December 15th, 2011

Source: Climate Spectator


Photo by twicepix via flickr CC

From It’s time for a smarter grid by Giles Parkinson:

Imagine for a moment that you are the head of a large group of network operators, faced with a decision about what to do about rising peak electricity demand. And you are presented with a choice: invest $2.6 billion over five years on upgrading your network – the route you would normally take; or spend a comparable amount on solar power and energy storage, distributed throughout the network.  This was the question posed by Professor John Bell, of the Queensland University of Technology, and Warwick Johnston, a leading solar analyst with Sunwiz, when they sought to find out if there was a better way than the traditional response of building more poles and wires to cope with rising peak demand.

Using Queensland network operator Energex as an example, and its forecast peak demand growth of 1.25GW over the five years to 2014/15, the study analysed the existing approach of spending $2.6 billion augmenting the grid, or investing a comparable amount in either 25GWh of storage, or 1.25GW of solar PV and 10GWh of storage.  The study concluded that a combination of battery and solar PV produced a far better outcome, because of the ability to generate revenue from the energy produced, and the use of battery storage to resell energy. Over a five year period, the net present value (NPV) of the poles and wires solution was negative $2 billion, while the NPV of the solar/storage solution was negative $750 million. But because these could produce revenue over a 20-year period, the solar/storage had a positive NPV of $2 billion over a 20 year period.

Bell and Johnston say the main take-home messages from this are that the integration of distributed PV and battery storage into the existing energy system has the potential to be cost effective now, and it underpins the case for reform of the National Electricity Market, to ensure that distributed generation is fairly treated and that network providers are encouraged to opt for the solutions that have greater market benefit, rather than simply being least upfront cost.

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>>Read the full article by Giles Parkinson on Climate Spectator.

>>Read about VEIL’s work on Distributed Systems.

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