What is a VPP?

Many of you would have seen the acronym VPP floating around the energy industry, in AEMO documents and publications like the Integrated System Plan (ISP). So, what is a VPP? A Virtual Power Plant (VPP) is basically an aggregation of resources. These can be generation, storage and controllable load from decentralised sources.  All being coordinated to deliver services to the power grid including electricity, FCAS and other power system services.

Last week battery manufacturer Sonnen reached the magic threshold of 1MW to operate in the National Electricity Market (NEM) and plans to operate a VPP.

The German based company, Sonnen, now owned by Shell, has built a network of customers to allow their Sonnen branded home batteries to participate in the company’s new virtual power plant.  This has been designed to provide frequency control services. The customers will receive a financial benefit through cash payments. Sonnen’s new program will also provide grid stability services.

The VPP branded, sonnenConnect is Sonnen’s first VPP worldwide.

Each Sonnen battery will not be heavily relied on due to the nature of the VPP aggregating all outputs. To operate in the FCAS market, each household will only be required to supply 4kWh of energy to provide the essential grid stability services.

To be eligible to participate in Sonnen’s VPP and rewards program, households will need to have one of Sonnen’s batteries installed, with at least 4kWh of capacity. No additional equipment will be required to allow batteries to participate in the program as Sonnen batteries incorporate the necessary control systems.

Sonnen has chosen Australia to launch its VPP products as Australia is more open to the establishment of VPPs, along with the high uptake of battery storage system installations compared to other parts of the world.

“With the growing uptake of rooftop solar and home batteries globally, utilities are recognising the importance of home batteries in Frequency Control Ancillary Services (FCAS) or what is known as demand response, to stabilise the grid when there is a surge in the demand for electricity”, Nathan Dunn, Sonnen Australia CEO said.

He also said “through sonnenConnect, we are rewarding customers who are providing us access to their Sonnen Battery when needed for demand response. Not only will they enjoy being energy independent, Sonnen Battery owners are working together as a community to stabilise the energy grid that connects millions of homeowners in the National Electricity Market.”

Sonnen has established a manufacturing facility at the former Holden factory in Adelaide. This allows Sonnen to be branded Australian made. They plan to use the Australian facility to produce other components and software for the energy industry including electric vehicle charging units.

Engie Expands in Australia

The influx of multinational’s into the Australian renewable energy industry is increasing with historic oil and gas producers such as Shell, BP and Total entering the market.

These global energy giants are making large acquisitions to expand their local presence in the clean energy sector. In a world where developers are struggling to bank projects the strong balance sheets of these companies is a welcome addition to the industry.

Engie is the most recent multinational company to expand in Australia with the purchase of development rights to the $750 million Hills of Gold wind project in northern New South Wales.

This project is the foundation development in the newly created Renewable Energy Zones (REZ) in New South Wales’s New England region. This REZ is the first REZ to be created under Australian Energy Market Operator’s (AEMO) vision.

The acquisition of the Hills of Gold Wind Farm will add 420MW into the region. The project was previously developed by Wind Energy Partners.

Engie is one of the world’s largest electricity utilities, with the French multinational operating more than 115GW of generation capacity globally, including a 19GW portfolio of renewable energy projects.

The project will consist of 70 6MW wind turbines and will be connected to the transmission network between Liddell and Tamworth.

Engie has previously owned power assets in Australia, being the operator of the brown-coal Hazelwood power station in Victoria that was closed in 2017. They have ambitious targets for Australia, hoping to develop 2,000MW of Solar and wind projects.

Engie has recently set up the Australian Renewable Energy Trust with Infrastructure Capital Group and Mitsui as a renewable investment vehicle. The trust contains Engie’s 119MW Willogoleche wind farm and it is likely the Hills of Gold project will be added to it.

GreenPower Rebranding

 

 

GreenPower, Australia’s accreditation program for renewable electricity is rebranding, to create renewed interest from businesses looking to cut their emissions. The GreenPower brand was launched in 1997 at the start of the renewable energy push towards electricity customers. At the time, most major electricity retailers offered some form of GreenPower as an extra to their electricity products.

The GreenPower program is voluntary for households and businesses to purchase renewable electricity through their retailer. It is a government backed program for verifying that purchases are from Australia’s wind and solar resources and aim to cut emissions. The GreenPower program sits on top of the mandated Renewable Energy Target so customers are voluntarily purchasing above what is legally required and therefore are supporting the increased growth of the Australian renewable energy sector.

To date 110,000 households and 17,500 businesses purchased renewable electricity through the GreenPower program, this comes from 500 accredited projects.

With the reduction in the cost of LGCs, the GreenPower program is encouraging households and businesses to consider participating in the voluntary program. As technologies improve, the cost of production of renewable energy has reduced since its inception in 1997, as a result renewable energy has become cheaper and this has flowed into the GreenPower product.

With the changing housing situation in Australia, many end users now rent and do not have access to roof top PV. The GreenPower program is a way for residential energy users without the ability to install rooftop solar to purchase renewable energy.

There are many benefits to going green with GreenPower. Your purchase supports Australian renewables, reduces your emissions, and contributes to a healthy future.

If you are wanting to protect the environment and support renewables, choosing GreenPower is a powerful way to show that your business is environmentally conscious and supports Australia’s renewable energy sector.

Our utilities retailers offer a range of green generation alternatives to help you meet your sustainability goals, including renewables, onsite solar generation, and energy efficient solutions.

Let Edge Utilities help you procure the best GreenPower deal for you.

The Electricity Statement of Opportunities (ESOO)

Electricity Statement of Opportunities (ESOO)

On Thursday August 27th, 2020, the Australian Energy Market Operator (AEMO) published its latest Electricity Statement of Opportunities (ESOO). The ESOO is a 10-year projection of electricity supply reliability in the National Electricity Market (NEM).

In July 2019, the Australian Energy Regulator (AER) introduced the Retailer Reliability Obligation (RRO). The RRO was introduced to provide stronger incentives to market participants for investing in technologies that will improve the reliability of the NEM. AEMO uses the ESOO to identify gaps in the NEM’s reliability. Over the next 5 years, AEMO will work with the AER if there is a significant gap identified in reliability. As the ESOO covers the next 10 years, the second 5 years following the RRO looks closer at forecasts for the major transmission upgrades and the continued development of renewable generation.

COVID-19 and other impacts

This year’s ESOO has assessed the impact that COVID-19 had on the NEM. It also looks at what affect this could potentially have on the outlook’s uncertainty. COVID-19 combined with the change in generation mix, demand changes, and gas market changes has provided a positive outcome. Due to these changes, AEMO has forecasted no unserved energy (USE) for the upcoming summer season. Unserved energy is a measure of the amount of customer demand that cannot be supplied within a region. This  happens due to a shortage of generation, demand-side participation or interconnector capacity.

The ESOO will require an update if life after COVID-19 returns to normal faster than expected. AEMO has also stated a few points of concern relating to the delays or deferment of planned outages that could affect reliability over summer.

ElectraNet, South Australia’s high voltage transmission network specialists, have reduced the summer rating on the Victoria to South Australia Interconnector. This reduction follows the damage incurred during the bushfires in the beginning of 2020. One downside of the reduced flow across the interconnectors, is further delays in the commissioning of renewable projects across the regions. This means that AEMO may need to deploy the Reliability and Emergency Reserve Trader (RERT) to manage the contingency events resulting in USE.

A new focus

After summer, the focus will shift to look at the reliability in NSW. This will be following on from the retirement of the Liddell Power Station. The outlook on this has improved since last years’ ESOO, with the augmentation of the Queensland to New South Wales Interconnector (QNI). This will take place in 2022-2023 and aims to increase renewable generation development in the region.

By 2025, minimum operational demand will change from the overnight period to occur at midday. This is due to an increase in rooftop solar panels and batteries. This will lead to challenges when managing voltage, system strength and inertia. AEMO has recognised this and are working with aggregators of Distributed Energy Resources (DER) to offer services such as increased photovoltaic (PV) controllability, load flexibility, storage, and load shifting.

New projects moving forward will require all new distributed PV installations to have suitable disturbance ride-through capabilities and emergency PV shedding capabilities. This will cause increased costs and delays in commissioning the projects.

AEMO is working with various stakeholders and industry experts to ensure energy supply is protected from the effects of increasing frequency, extremity and scale of climate induced weather events that have been observed in prior years. The NEM will continue to see a large quantity of renewable generation connections. Approximately 4,300 MW of new capacity is forecasted to be operational this summer and 1,900 MW of this is expected to be in Victoria alone.

A more realistic outlook on Summer

As COVID-19 is unpredictable, AEMO have warned that there is risk in their forecast regarding no USE this summer. Due to this, there is a level of uncertainty regarding the supply of electricity during the coming summer. Although, AEMO have still not seen a requirement to contract the volume of long-term RERT as seen in previous years. If renewable generators do experience delays, AEMO will continue to outsource short-term RERT suppliers as an emergency backup.

The Bureau of Meteorology (BOM) are forecasting La Niña this summer. This occurs when equatorial trade winds become stronger, the ocean surface currents change. This then draws cooler deep water up from below. La Niña will result in a cooler, wetter climate for this year’s summer. Because of this, we are likely to see less stress on the supply/demand balance this summer.

Federal Energy Minister, Angus Taylor has referenced this years’ ESOO in a recent statement. He informed Australians that households and businesses will have reliable electricity moving forward. However, AEMO have tempered this statement commenting that there may be issues after 2023 if capacity does not increase. Although there are fewer planned outages for coal and gas generators this summer, COVID-19 may extend repair times. Due to this risk, AEMO is taking everything they can get as an emergency backup under the RERT scheme.

 

Written by: Alex Driscoll

 

Read our article on the recently published Integrated System Plan (ISP) here: https://edgeutilities.com.au/2020-isp/

To keep up-to-date with Edge Utilities, connect with us on LinkedIn: https://www.linkedin.com/company/edge-utilities/

The 2020 Integrated System Plan (ISP)

What is the Inegrated System Plan?

The Australian Electricity Market Operator (AEMO) recently published the 2020 Integrated System Plan (ISP) which is intended to maximise the value to end users by developing the market through an optimal development pathway. The ISP was endorsed by the Council of Australian Governments (COAG) Energy Council in 2018, and has since guided governments, the industry and consumers on investments needed for an affordable, secure, and reliable energy future.

The ISP is a 20-year roadmap for the National Electricity Market (NEM) and is updated by AEMO every two years with their response to the latest technology, economic, policy and system developments. The report identifies investment choices and recommends essential actions to optimise consumer benefits. Although the report is published by AEMO, they are not the only party to have an input in the ISP. In preparation of the 2020 ISP, an 18-month consultation program took place where over 200 stakeholders were consulted, 8 workshops were held, 3 webinars were hosted, and 85 written submissions were provided.

The 2020 Integrated System Plan

The 2020 ISP is expected to deliver approximately $11 billion in net market benefits to the NEM the next 20 years. These benefits come together with the market reform which is currently aiming to attract investments and optimise markets outcomes. The market reform is being coordinated by the Energy Security Board (ESB) with market bodies such as the Australian Energy Regulator (AER), Australian Energy Market Commission (AEMC) and AEMO.

It has been highlighted in the 2020 ISP, that as the generation mix changes with the retirement of coal generation, the least-cost transition should be through Distributed Energy Resources (DER), Variable Renewable Energy (VRE) and investment in transmission infrastructure. DER is expected to double, if not triple, providing around 13-22% of the total underlying annual energy consumption. Although, more than 26 GW of new VRE is needed to replace 63% of coal-fired generation that is set to retire.

Dispatchable resources between 6-19 GW are also needed to back up the renewable energy generators. These dispatchable resources will be in the form of utility-scale pumped hydro, fast responding gas-fired generation, battery storage, demand response and aggregated DER participating as virtual power plants. It was also highlighted that there is a growing need to actively manage power system services such as voltage control, system strength, frequency control, inertia, ramping and dispatchability.

AEMO’s Forecasted Projects

To achieve the desired results, there are several projects outlined in the 2020 ISP that were broken down into committed projects, actionable projects, actionable projects with decision rules and future projects. The committed projects are aiming to address cost, security and reliability issues and have already received regulatory approval. The South Australia system strength remediation is one of these projects, which will see the installation of four high-inertia synchronous condensers and is on track to be completed in 2021.

The Western Victoria Transmission Network Project is a two-part project due to be completed in 2021 and 2025 to support generation from the Western Victoria REZ, including new 220 kV and 500 kV double-circuit lines. The last of the committed projects is the QNI Minor which is set to be commissioned in 2021-22 and will involve a minor upgrade of the existing interconnector, adding over 150 MW thermal capacity in both directions.

Actionable Projects

The actionable projects include a minor upgrade to the existing Victoria ‒ New South Wales Interconnector (VNI), which is expected to be complete by 2022-23. There will be a new 330 kV double-circuit interconnector created between South Australia and New South Wales which is due to be complete by 2024-25. In the same year, the Central-West Orana REZ Transmission Link is set to spark network augmentations to support its development. In 2025-26, there will be a 500 kV transmission upgrade to reinforce the New South Wales southern shared network and increase transfer capacity between the Snowy Mountains hydroelectric scheme and the region’s demand centres.

Two projects that are actionable with decision rules are the VNI West project and the Marinus Link. VNI West is a new High-Voltage, Alternating Current (HVAC) interconnector between Victoria and New South Wales and the Marinus Link involves two new High-Voltage, Direct Current (HVDC) cables connecting Victoria to Tasmania, each with 750 MW of transfer capacity and associated alternating current transmission.

Future Projects

Some of the future projects include Queensland to New South Wales Interconnector (QNI) Medium and Large interconnector upgrades, three additional Queensland augmentations, three New South Wales augmentations, and two South Australian augmentations.

AEMO has forecasted a great deal of change to the NEM and Edge is looking forward to seeing the progress of the upcoming projects.

 

Written by: Alex Driscoll (Senior Manager, Markets and Trading)

 

To learn more about the National Electricity Market (NEM), read our educational article: https://edgeutilities.com.au/an-introduction-to-the-nem/

Back to the Future Part Two: Still a long way off

Back to the Future Part Two: still a long way off

In the 1989 film back to the future part 2, we were promised we would have hover boards and flying cars by 2015. Now I know we shouldn’t believe everything we see on TV, but I think a few people feel robbed of the future they were promised! The Tesla self-driving car and a Segway is about as close as we have got by 2020.

CSIRO’s Report

When CSIRO, Australia’s main scientific research body, stated the whole of Australia’s car fleet will be electric by 2050, there were doubts. Let’s dive deeper to see if there is merit in the claim.

CSIRO released 5 scenarios incorporating electric vehicles, rooftop solar and batteries which fed into the Australian Energy Market Operator’s (AEMO) Integrated System Plan (ISP). The ISP was released at the end of 2019, but the step change latest scenario has been the one to attract the most controversy. This is due to it showing what it believes can be possible from these technologies with the right grid integration and the rate of reductions in costs which could be possible for these technology with large scale uptake. It is also being overly ambitions not just limiting Australia’s contribution to warming at the agreed Paris agreements 2oc but exceeding this with an ambition to be closer to 1.5oc.

They do acknowledge with this there is significant increase in electricity demand but they do not address the cost of this, nor do they address the likely advertising campaign which would ensue if a mandatory “carbon tax on wheels” was introduced. Merely they expect a price parity of electric to petrol cars by 2025 and that charging would not be an issue.

I fear therefore that this scenario is another which is based on a chess board which is not in place. With no federal government really wanting to raise their head above this parapet, it therefore limited incentives to move to electric vehicle and investment in the electrification capabilities, i.e. charging. As such the likelihood of it coming to pass in this timescale is unlikely.

Arena (Australian Renewable Energy Agency)

However in contrast, Arena, the Australian Renewable Energy Agency, has agreed to fund a two year, $2.4m trial to create a vehicle-to-grid power source where electric vehicles can provide system security and be paid to plug their EVs into the grid. With this Australia join the ranks of around 50 other vehicles to grid projects (~50% of which are in Europe). This trial is using around 50 cars from the ACT governments new Nissan Leaf fleet and could provide grid stability without the huge outlay required for a Tesla battery or a Snowy 2.0 hydro project.

Initially, these discharges will only be used for Frequency Control Ancillary Services (FACS) to the National Electricity Market (NEM). This will allow AEMO to maintain the frequency of the system. But with discharge ability within tenth of a second Dr Sturmberg (Australia’s National Universities research leader in Battery Storage and Grid integration) anticipates that if this was available across Australia’s 19 million vehicle fleet “it would store more energy than five Snowy 2.0’s or over 10,000 Tesla Big Batteries.”

These vehicles will work on bi-directional chargers and it is anticipated with more people working at home these could later become an in-home battery also. If proven feasible, this vehicle-to-grid technology could be the biggest disruptor on the Distribution System since small scale solar PV was introduced. The ability for consumers to have the control and ability to support the grid in a controllable way and with returns expected to yield around $1,000/Year this extra revenue could this create a significant incentive to start the drive towards the electrification of Australia’s car fleet with or without government legislation.

 

Written by: Kate Turner (Senior Manager, Markets & Advisory)

 

For more articles from Edge Utilities, visit our news page: https://edgeutilities.com.au/news/

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