Sydney, Australia — (METERING.COM) — May 31, 2013 – Embedded microgrids are set to become a cost effective approach for customers to increase the reliability of their long term electricity supply above grid levels within the decade in Australia, according to a new report from energy research specialist Energeia.
Longer term, embedded microgrids are expected to offer customers the ultimate choice of disconnecting from the network, unleashing a new era of electricity industry transformation and regulatory reform.
With more than 1 in 10 households installing solar PV systems, Australian consumers are no longer relying on the main grid for all their electricity needs, resulting in a shift from centralized to ‘embedded’ electricity generation that is challenging the power industry’s status quo.
The uptake of residential solar PV has already created an oversupply of power during daylight hours. As a result, new installations are now offered less than a fifth of the previous rate received for any excess they sell to retailers and are likely to see the price continue to fall as the oversupply increases.
Oversupply into the main grid can also cause inverters to automatically disconnect to protect power quality, and grid outages trigger solar PV systems to automatically disconnect for safety reasons. These disconnections represent a loss of value to households which have invested in distributed generation and they will look for ways to protect their investment.
The solution, according to the report, “Over the Edge: The Australian Outlook for Embedded Microgrids to 2027,” is embedded microgrids.
“We expect embedded microgrid technology to be commercially viable from around 2015,” said Energeia’s managing director Ezra Beeman. “Ultimately, we see microgrids offering customers an attractive alternative to mains supply, particularly for home businesses, where a loss of supply can have significant financial implications.”
Energeia finds in the study that while there are few institutional barriers, Australia lacks a formal policy or regulatory framework to encourage embedded microgrids. The main policy gaps in Australia relative to international best practice are supply side government incentives to build industry capability, demand side incentives to build capacity, and truly cost reflective demand management incentives. There is also a need to adopt recently agreed international microgrid standards.
Key barriers in the Australian market include a lack of off-the-shelf solutions, industry immaturity and high costs.
Energeia’s outlook is that by 2027 over 74,000 customers will have invested $1.3 billion in embedded microgrid solutions to access better than grid levels of reliability. The market’s total installed demand response capacity is estimated to be 42 MW with annual energy exports of 60 MWh.