The nation's biggest energy companies – including AGL Energy, Energy Australia and Citipower/Powercor – have joined forces with energy software firm Greensync to build the smart grid of the future and make 300 megawatts of spare power capacity available to help avoid blackouts this summer.
The partnership gives the Melbourne-based firm a head start in the race to host "demand response" of distributed energy in Australia, a service that Chief Scientist Alan Finkel and Australian Energy Markets Operator chief Audrey Zibelman say can help restore stability to the power grid.
As part of the partnership, Energy Queensland will partner Greensync to launch Australia's largest, though as yet unquantified, "virtual power plant" in North Queensland.
A virtual power plant is a network of distributed energy resources such as solar panels, batteries and smart appliances that can be managed like a power plant using energy management software platforms such as Greensync's deX platform. deX was launched on Thursday and will be rolled out to utilities in the March quarter of 2018.
These "behind the meter" resources can be controlled through "demand response", or demand management, so they are available at times of surging demand. The energy is then used to prevent a repeat of the blackouts and shortages that plagued the National Electricity market last summer.
Greensync founder and chief executive Phil Blythe said the power industry was pulling out all stops to avoid a repeat this summer, when the National Electricity Market will be without the 1600 megawatt Hazelwood power station that shut in March.
Everything possible
"I think everyone in the industry is doing everything possible to get as much capacity as they can into the market by next summer," Dr Blythe said.
This includes big batteries such as Tesla and Neoen's 100MW battery in South Australia and a similar one being deployed in Victoria, mothballed gas plants such as Engie's Pelican Point plant in SA being dusted off, better preparedness of the existing thermal power fleet and demand response.
AEMO and the Australian Renewable Energy Agency are tendering for 160-170MW of demand response capacity for the summer, with plans for more in subsequent summers. AEMO is calling for additional demand response under its rarely used Reliability and Emergency Reserve Trader (RERT) mechanism.
"Everything is being pulled out of mothballs and being utilised in the market this year," Dr Blythe said. He said in March that Greensync could have 300 MW of demand response available by the summer, and stands by the claim.
The effort to prevent a repeat of last summer's blackouts and outages will focus mainly on existing commercial and industrial energy resources. Over time virtual power plants will extend to household batteries, solar panels and electric vehicle chargers, which CSIRO expects to be in two-fifths of all homes in a decade as ownership of the energy system shifts to consumers.
The deX partners include upstart retailers Powershop and Mojo, storage and power engineering firms Siemens, Tesla and ABB, and consumer technology suppliers like Geli, Jetcharge, wattwatchers and PowerLedger. AEMO, Arena, Energy Networks Australia and the Clean Energy Council are also partners.
deX is a digital technology platform that allows utilities to see exactly what distributed energy resources are available at any time on customers' premises and how they are performing. It can remotely control those resources, with the customers' consent, at times of high demand or volatility to avoid shortages.
Physical hedges from distributed energy
That allows contracts to be written between distribution companies and energy services providers or retailers, and between energy services providers and consumers and businesses – who can be paid for providing power back to the grid at times of high demand. Physical hedges and voltage and capacity support can also be supplied from distributed energy resources to stabilise the grid.
Dr Blythe said the support of such pillars of the energy industry showed that "everyone understands that in order to have a stable and reliable grid we need visibility and a way to manage those distributed energy resources in the grid".
"I think the state of the market has certainly galvanised support and an understanding that we need to work as an industry to solve these problems." he said. "It's the first step we need to take to get control of that part of the grid."
The arrangements aren't exclusive. "We believe GreenSync's platform has the potential to disrupt the energy market and deliver real benefits for customers, but ultimately the market will decide on 'which' platform and its success," Andrew Perry, EnergyAustralia Executive – NextGen, said.
AGL Executive General Manager New Energy, Elisabeth Brinton, said: "We support the broad advancement of DER technology development that benefits consumers. The deX is an exciting step to test the creation of a new type of market. Many platforms are needed to enable a vibrant and modern energy ecosystem."
One issue to be ironed out is technical standards to connect all the different energy resources – different brands of batteries, pool pumps, electric vehicle chargers – to the grid. Dr Blythe said the deX partners would aim to establish common standards across Australia, but the work had to start now.
"Time is of the essence. We can not wait two years for standards to be agreed before we are doing anything. Utilities need to act now for those distributed energy resources to be integrated into the grid."
