There has been a significant shift in the way the collective community are buying, using and selling-on power.
With the rise of distributed energy resources, (which is the name given to renewable energy units or systems that are located at houses or businesses) like solar panels, batteries and electric vehicles, more customers are generating their own power and, in some cases, selling it back to the grid.
Not exactly ‘new’ news to most of you, but this increase has led to the Australian Energy Market Commission (AEMC) working with a range of consumer groups, government bodies and retailers to re-think what the future of the electric grid system or "Grid of the Future" will look like.
Distributed energy resources
Historically, electricity infrastructure, made up of power lines, substations and transformers, was designed to deliver electricity in one direction – from the generation point down to the consumer or household. However, customers are becoming more active players, generating and even storing their own energy, which means it’s no longer just a linear framework where energy is distributed centrally from substations and delivered one-way down to the consumers.
It is projected that by 2027, over 40% of Australian consumers will use on-site distributed energy resources of some kind, and that by 2039, 2 out of 3 customers will have some form of distributed energy resource. In reality, this means that by 2039 we will have a projected 16GW of residential rooftop solar capacity, 7.5GW in battery storage and 25% of our vehicles will be electric. (To put that into context, 1 gigawatt is equivalent to 3.125 million solar panels).
So, it’s quite clear that the way that customers are using and interacting with the grid is already changing, and more change is going to come. This means, that we must also change the way that the grid is operated and regulated, including the way customers access and feed into the grid, and how they pay for energy supply.
The road map to the Grid of the Future
The AEMC released their 2019 Electricity network economic regulatory framework review report which identified key actions that need to be taken to move away from the way things are now, to the Grid of the Future.
It’s been identified that the Grid of the Future can not only work differently and more efficiently – but has to. The shape of our energy market is changing at a rapid pace, and in less than 20 years the way we generate, store and distribute power will look completely different. The changes proposed by the AEMC and partnering bodies are intended to benefit the whole community, not just those with distributed energy resources – creating cleaner and more efficient energy sources, and lowering the prices across the board!
The key reforms are based on 3 main principles:
- Benefits all consumers (literally everyone, not just those with solar, batteries or electric cars)
- Consumer-focused (not network-driven)
- Dynamic and resilient (responsive and adaptable to changes in supply and demand needs)
Risks and rewards
The report does not come without its warnings. It highlights that a system that is not supportive of consumer choices and / or doesn’t reward customers for their positive energy behaviours could drive prices up, so it’s really important that we get it right, and that the Grid of the Future operates completely differently to the way it works now. In reality, this will mean significant changes in network options (where your energy comes from), huge changes in rules and regulations and most importantly for you, pricing structure changes.
How this will all happen is really complex and requires a lot of consumer groups, electricity providers, retailers and government bodies to work together – and work quickly.
It’s fair to say that this kind of shift is huge and has massive implications, particularly if as the AEMC suggests there will be large-scale pricing reform, and the ability for customers to choose how much, and where their excess energy goes. For (i.e. it could go to a neighbour, their local community or the broader grid).
This huge undertaking has been worked on ever since the report was released, and there’s still a lot to do, but you can track the process of it by clicking here.
But it’s exciting, because not only are these changes within our reach, they are already here! What the AEMC is proposing means that ultimately local communities will have more choice, the model is completely re-worked and we will collectively be turning energy generation, distribution and buying and selling on its head – now that is definitely speaking our language!
We're working towards a decentralised system
Since Enova began, we’ve had the vision to do energy differently. We’ve been actively working towards a decentralised system, where we no longer have solely large-scale generation, but instead, electricity can be generated, stored and shared amongst communities.
We have been working tirelessly, piloting or partnering on projects such as:
Plus we’ve been exploring things like Virtual Power Plants, alternative energy needs, and storage solutions, to name a few – demonstrating that doing energy differently at scale is not only in our grasp, but is achievable now! And we’re ready, and fully set-up to make this happen!
We are proud to operate as a model for how energy can be done differently: flipping traditional energy retail on its head and launching with a new business model, actively doing something practical about climate change, and helping local communities in the process.
We can’t wait to see what comes from the AEMC remodelling of the Grid of the Future, and we are excited be become part of the conversation.
In the meantime, here’s a great video below that explains the AEMC’s view of the Grid of the Future: