Advancing Microgrid Excellence. An invitation for partnership

Transcription

1 Advancing Microgrid Excellence An invitation for partnership

2 Advancing Microgrid Excellence An invitation for partnership The idea came into my mind that as steam was an elastic body it would rush into a vacuum James Watt Rotary Steam Engine

3 In the same way that steam transformed the industrial world in the 18th century and Orville and Wilbur Wright revolutionised transport early in the 20th century, we find ourselves in the midst of a revolution in the way electricity is distributed especially to regional and remote communities. The possibilities of microgrids are already recognised as transformational notably to the millions of people worldwide who, even in the 21st century, still do not have access to a safe, reliable and affordable electricity supply. Here in Western Australia, one of the most remote and sparsely populated regions of the world, necessity has inspired a unique combination of experience, expertise, intellectual property and innovation hubs. As defined, a microgrid is technically a small isolated power system. However, we know it is so much more than that. Microgrids and distributed energy resources (or DER, which is power generated at the home or business where it is consumed) are the DNA of future electricity. In this context, it may appear strange that from one of the most isolated regions in the world, an opportunity has arisen for leadership, investment and, ultimately, opportunity to reap the benefits of the microgrid revolution. At the heart of this opportunity is the potential to partner with Western Australia s regional and remote electricity provider Horizon Power. More specifically, it is the invitation to access one of the largest existing microgrid portfolios in the world, in Western Australia. If necessity is the mother of invention, then the development of Horizon Power s vast array of microgrids is a response to the need to deliver electricity to communities spread across thousands of kilometres in some of the harshest climatic conditions on earth, where a large scale electricity grid is simply impractical and expensive. Thus, as this energy revolution has come to our doorstep, Horizon Power s vision is to be the world s best microgrid company. World leading - Our heritage in microgrids We realise that while we have something unique in our microgrid fleet, we cannot realise the benefits on our own. That s why we are already working alongside other world leaders in this space, including those driving New York s Reforming the Energy Vision (REV), Lawrence Berkley National Lab, CSIRO and Bloomberg New Energy Finance. Horizon Power has 32 discrete systems, making us the largest operator of microgrids in Australia and one of the biggest in the Asian region, in a service area that is 10 times the size of Victoria (or five times the size of California and 29 times the size of New York), with a population a third of that of Canberra. We have led Australian-first optimal economic supply modelling, which outlines a largely distributed energy future for the majority of our systems. Work is already underway with at least 10 of these microgrids to incorporate higher levels of distributed energy into the generation mix by These are known as our system blueprints. We are also the only vertically integrated utility in Australia with advanced meters right across our vast service area, which means we have extensive data analytics capability. The advanced meter infrastructure is both transformational and essential and underpins our efforts to understand energy use at every point on the network, enabling the transition from traditional centralised generation to high penetration distributed resources. It is also allowing us to lead innovations in tariff reform, with an Australian-first variable pricing product. This pricing model provides incentives to reduce peak usage and thereby lower generation costs, as well as other opportunities in retail, generation and energy network management, improving customer choice and network safety. HORIZON POWER 3

4 Advancing Microgrid Excellence An invitation for partnership The opportunity The applications and benefits of microgrids obviously extend beyond State and National borders and regional areas. Horizon Power is looking to harness the momentum of change in the energy sector, with a vision to scale-up trials using real-life sites serving customers in regional Western Australia. This will enable the collection of behavioural data that can be further refined for the development of products and business models. As a consequence this will allow the acceleration of commercialisation opportunities and innovation. Our collaboration with leading research organisations like the CSIRO and several State and international universities is allowing the capacity to leverage these rich data sets and, in the process, provide solutions to some of the biggest challenges facing the global industry. Western Australia is strategically positioned as the gateway to the Asia Pacific Region, which represents more than 50 per cent of the global microgrid market that is estimated to top $35 billion by Western Australia, as a State, needs to seize the opportunity in this early stage of evolution in what is a fragmented microgrid market. Horizon Power s focus and investment in DER is no accident. It has been a body of work over several years supported, reviewed and validated by CSIRO and Energy Networks Australia (ENA) and takes the form of our system blueprints. Numerous government bodies and agencies, research institutes, global energy companies and industry have already highlighted the importance of this DER transition for Australia 1 : The largely untapped off-grid clean energy market and funding support available from the Australian Government, creates an attractive opportunity for the community and industrial off-grid sectors to pursue cheaper and cleaner electricity supply. In realising these opportunities it is recognised that deployment of cost effective enabling technologies, development of system integration expertise and remote training programs will be essential to accelerate uptake, ensure reliability and sustain the confidence of end-users. (AECOM 2 ) 1 See also ENA and CSIRO s Electricity Network Transformation Roadmap: 2 An AECOM report prepared for the Australian Renewable Energy Agency (ARENA) highlights the growing significance of off-grid clean energy in Australia s future:

5 Our changing electricity system Technology in the future Customers in the future will be decentralised to produce, consume, store & sell low-carbon electricity locally Home Battery Storage Distributed Solar Customer Analytics Platform will be empowered to use electricity how they choose, supported by new products & services Advanced Meter Digital Phone App Smart Inverter Augmented Reality Future electricity system Smart Appliances Flexible Pricing Plans Safety Management System Connected Trading Platforms Networks in the future Cyber Security Platform Communications Flexible Regulatory Frameworks Markets in the future will be safe, reliable, efficient & support the digitisation and automation of systems will use data analytics to connect & incentivise participants to drive equitable pricing HORIZON POWER 5

6 Advancing Microgrid Excellence An invitation for partnership Our future electricity microgrid Rooftop Solar PV Advanced Meter Home Battery Storage Augmented Reality Standalone Power System Household level Neighbourhood level Rooftop Solar PV Advanced Meter Home Battery Storage Augmented Reality Standalone Power System Smart Inverter Smart Appliances Flexible Pricing Plans Digital Phone App Customer Analytics Platform Grid-Scale Battery Connected Trading Platforms Electric Vehicle Charging Stations Communications Small-Scale Wind Turbines Solar Roads

7 Smart Inverter Smart Appliances Flexible Pricing Plans Digital Phone App Customer Analytics Platform Grid level Wind Farms Solar Farms Solar and batteries integrating with diesel power stations Safety Management System Flexible Regulatory Frameworks Customer Analytics Platform HORIZON POWER 7

8 Advancing Microgrid Excellence An invitation for partnership The challenges In this early stage of the rapidly evolving energy revolution, there are a number of challenges that the energy industry is tackling. In Australia, there is still a great deal of political debate about energy. Time will tell how Federal energy policy plays out, however, given Western Australia is separated, both physically and legislatively from the National Electricity Market, Horizon Power has a real opportunity to promote innovations in energy delivery across its clusters of microgrids. Horizon Power is already working with local and State Governments and regulators to ensure that our long-term commitment to a microgrid future, and the benefits that brings to our customers in terms of reliability, affordability and lowering emissions, is enabled and not constrained, by ongoing policy decisions. Professor Ross Garnaut, respected economist and energy analyst, recently stated Western Australia s isolation from the rest of the nation, and abundance of natural resources, ideally positions it as an energy superpower. In the words of Professor Garnaut the opportunity exists to shake off the shackles of the old ways of supplying energy and Western Australia can benefit from its own vast and diverse renewable energy, mineral, land and marine resources and play a vital role contributing to the national and global transition to a zero carbon energy future. In addition, he said, Western Australia s policy independence from the National Electricity Market allows it to avoid legacy problems of high costs and unreliability in other states. Beyond the debate in Australia about energy policy, technical challenges to achieve a high renewable penetration DER system still need to be resolved. As Australia s Chief Scientist, Professor Alan Finkel noted in his recent review: Growing numbers of DER greatly increases the complexity of operating the power system, requiring management of large amounts of data, advanced operating and communication systems and development of software for stable and efficient operation; and can undermine the effectiveness of existing mechanisms for maintaining security. Like many utilities, Horizon Power is already investigating solutions to these complexities, only with more risk and urgency, created by the isolation and relatively smaller scale of its systems. Given its unique position, being the only vertically integrated utility in the country with an advanced metering platform, Horizon Power is leading trials and analysis on how best to manage reverse power flows created by higher levels of DER, which can destabilise electricity networks and impact reliability and system security. Trials are also exploring the management of renewable energy during weather events to prevent impacts on the power station as well as centralised solar, hybrid systems and the integration of wind generation. Horizon Power has the impetus, the economic drivers, the regulatory flexibility, and the live test beds (in the form of its regional microgrids) from which it can deploy new technological and retail solutions to assist in overcoming some of the challenges facing the industry. The utility is now looking to draw on the expertise of other cutting-edge innovators and researchers to work with us to further refine this work and develop additional applications. Collaboration between research institutions and industry, with government support, is critical to this. Our investment so far Horizon Power has already invested $100 million upgrading towns such as Onslow and providing the metering platform that is essential for future microgrids. Going forward, there is a commitment to spend another $100 million on the next 10 microgrids identified for upgrades, and a further $600 million over the forward estimates on capital and operational expenditure. In addition, Horizon Power expects to spend $100 million on future network infrastructure. In the long-term, we aim to avoid larger scale infrastructure investment through cheaper distributed energy solutions and innovative energy solutions.

9 HORIZON POWER 9

10 Advancing Microgrid Excellence An invitation for partnership Onslow - a case study In our key Pilbara microgrid of Onslow, with investment from Australia s largest resource holder Chevron, more than 50 per cent of the town s energy needs is forecast to come from renewable energy sources by 2020, heralding this new era of energy. Once complete, the Onslow solution will likely comprise more battery storage, behindthe meter-solar, and smart energy products per customer than any microgrid around the world. Other trials and demonstrations underway or planned in Onslow and other WA towns include: Roof leasing Community solar and battery Embedded networks Finance packages Green energy trading alternative regulatory frameworks and pricing models. Horizon Power is also involved in developing feedin-management platforms, predictive analytics, weather forecasting, grid automation, demand response trials, behavioural archetypes, and renewable stand-alone power systems. A place to collaborate Perth, the nation s regional capital, and the gateway to Asia, is a fascinating vantage point from which to watch this exciting new future unfold. It is also home to Horizon Power s corporate centre, located in Bentley Technology Park, which is a cluster of utility, academic and commercial organisations. Our objective is to promote Technology Park as the epicentre of Australia s microgrid and distributed energy future, facilitate opportunities for knowledge sharing amongst researchers and industry, and encourage collaboration to accelerate the commercialisation of solutions. Building strategic partnerships is integral to the success of this microgrid incubator and there is evidence that firms promoting open collaboration are more competitive than similar firms scattered in isolated silos with collaboration also driving growth in employment, especially in high value jobs - more patents, entrepreneurship, more successful start-ups, higher export and economic growth, higher wages and better productivity 3. There is no limit to the evolution of this vision, with markets in South East Asia, the Pacific, and Africa already approaching local WA companies to assist in providing integrated, affordable and renewable solutions as part of their priority to deliver efficient and coordinated electrification projects. 3 See Ron Adner (Harvard Business Review): When they work, ecosystems allow firms to create value that no single firm have created alone. The benefits of these systems discussed under such labels as platform leadership, keystone strategies, open innovation, value networks, and hyperlinked organizations are real and well publicized.

11 Our invitation We are now inviting industry and research bodies to join us on our journey. We are striving to facilitate further academic research and investment from private industry for collaborative design work on these world leading high penetration renewable microgrids by utilising our unique systems and data sets to collaborate on product development and commercialise IP. To find out more please contact: Tel: (08) HORIZON POWER 11

12 To find out more please contact: Tel: (08) Web: horizon power.com.au Find us on