- Living laboratory for Transactive Energy? CSIRO Energy Flagship

Mark Paterson

ADDENERGY BUSINESS FLAGSHIP UNIT/FLAGSHIP NAME Powering the world’s largest island…

Australia - Living Laboratory for Transactive Energy? An unprecedented transformation...

“The world’s electricity network will change more in the next 20-years than it has in the last 100”

IBM Energy & Utilities, ‘Smart Infrastructure – Building the Intelligent Grid of Tomorrow’, Enercom Conference (March 2009).

Australia - Living Laboratory for Transactive Energy? Australia’s Future Grid Forum  Industry-led  Whole-of-system  Long-term orientation to 2050

Australia - Living Laboratory for Transactive Energy? Issues that motivated the sector to participate

Residential HVAC transitions from a luxury to a commodity product in late 1990’s

Australia - Living Laboratory for Transactive Energy? Issues that motivated the sector to participate

Natural grid renewal cycles ‘collide’ with rapid growth in peak demand have been the largest source to drive up transport cost

Australia - Living Laboratory for Transactive Energy? Issues that motivated the sector to participate

For the first time in Australian history electricity consumption has decoupled from economic growth and is in decline

Australia - Living Laboratory for Transactive Energy? Issues that motivated the sector to participate Solar panel uptake has been rapid

In Dec 2013, the Clean Energy Regulator published its small-scale installation data of a rated output of 3,031MW from small generation units installed in Australia

Australia is approaching a total of two million small-scale renewable energy installations

Australia - Living Laboratory for Transactive Energy? Issues that motivated the sector to participate

Retail electricity prices have risen sharply after long decline/plateau

Australia - Living Laboratory for Transactive Energy? Social Licence

New Business Enabling Models Electricity Technology Ecosystem

Economics Regulation

Australia - Living Laboratory for Transactive Energy? Participants Generators Hydro Tasmania ESAA

GE Alstom Grid Australia: Suppliers / Electranet AmpControl TNSPs Ernst & Young Business SP Ausnet Landis+Gyr Powerlink Siemens Transend Transgrid Western Power

ACOSS AMIRA End-users, CEC NGOs & DNSPs Aurora Energy CEFC Others Citipower EEC Grattan Institute Smart Grid Aust DRET SA Power Ntwks The Climate Institute AER Western Power Total Environment Ctr AEMC University of Energy Government AEMO Retailers & Regulators ARENA ERAA BREE AGL State Govt: Qld, SA & Vic Aust Local Govt Assoc

Australia - Living Laboratory for Transactive Energy? Four 2050 scenarios

Set and forget Leaving the grid

Rise of the ‘Prosumer’ Renewables thrive

Australia - Living Laboratory for Transactive Energy? Scenario 1: Set and forget

• Closest to a linear path of evolution from the present • Generation:

o 19% from distributed sources (gross) o 30% from renewable sources (gross) • Modest uptake of DS and EVs • Dependant upon near-ubiquitous ‘set and forget’ energy service and DM solutions offered by incumbent networks

Australia - Living Laboratory for Transactive Energy? Scenario 2: Rise of the prosumer

• Extensive transition to distributed energy networks • Generation:

o 46% from distributed sources (gross) o 41% from renewable sources (gross) • Modest uptake of energy storage and electric vehicles • Majority see value proposition of remaining grid-connected and networks now ‘transact’ electrons between thousands of sites

Australia - Living Laboratory for Transactive Energy? Scenario 3: Leaving the grid

• Extensive transition toward user autonomy underpinned by distributed generation and storage • Generation:

o 31% from distributed sources (gross) o 64% from renewable sources (gross) • ~30% are not convinced of grid value proposition and have entirely disconnected by 2050

Australia - Living Laboratory for Transactive Energy? Scenario 4: Renewables thrive

• Extensive transition to centralised renewables • Generation:

o 26% from distributed sources (gross) o 86% from renewable sources (gross) • System is supported by :

o Extensive deployment of grid-side storage

o Extensive uptake of electric vehicles o Modest uptake of DG and DS

Australia - Living Laboratory for Transactive Energy? Projected on-site generation share

Australia - Living Laboratory for Transactive Energy? Grid-supplied electricity consumption

Australia - Living Laboratory for Transactive Energy? Projected network utilisation

Australia - Living Laboratory for Transactive Energy? There is no scenario which is best for all Stakeholder Scenario 1: Scenario 2: Scenario 3: Scenario 4: ‘Set and ‘Rise of the ‘Leaving the ‘Renewables forget' prosumer’ grid’ on tap’ Residential consumer

Commercial or industrial customer

Retailer Each scenario presents vast change for

Distribution some actor within the system

Transmission However, we could generalise to say Generation and transmission system operators Scenario 3 would be represent the most Energy service companies

change, Scenario 1 the least Metering services

Centralised generator – coal

Centralised generator – gas

Centralised generator – renewable

On-site generators

Storage technology providers

Electric vehicle providers

Information and communication technology

Australia - Living Laboratory for Transactive Energy? 2015-25 Decade of Transition

Australia - Living Laboratory for Transactive Energy? 2015-25 Transition Pathways for the nation

Australia - Living Laboratory for Transactive Energy? Seven observations about this transition...

1. Network-centric → Customer-centric 2. Centralised → Decentralised/Hybrid (esp. remote rural) 3. Fossil fuel generation → Continuous decarbonisation 4. Regulated natural monopoly → Increasing exposure to competition 5. 20 – 50% of electricity generated locally by 2050 6. Grid continues to play a critical (but evolved) role in 2050 7. Social justice issues now arising with ‘cross-subsidies’ from lower to higher income households

Australia - Living Laboratory for Transactive Energy? Asking the right question in an increasingly distributed energy future

“Who is going to pay for this Transactive Energy system?”

“Who is going to pay if our electricity systems are not transactive?”

Australia - Living Laboratory for Transactive Energy? Australia as a ‘TE’ Sandbox…?

Australia - Living Laboratory for Transactive Energy? Australia as a ‘TE’ Sandbox…?

Australia - Living Laboratory for Transactive Energy?

Australia - Living Laboratory for Transactive Energy? Thank you CSIRO Energy Transformed Flagship

Mark Paterson Energy Flagship t 0459 841 006 e [email protected] w www.csiro.au/energy

ENERGY TRANSFORMED FLAGSHIP