Home Consumer resources Ten Ways States Can Accelerate Consumer Investment in Net Zero

Ten Ways States Can Accelerate Consumer Investment in Net Zero

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More than three million homes in Australia already know how rooftop solar power can lower their electricity bills. At least 110,000 also have batteries, and a growing number are lining up to buy electric vehicles.

These purchases are not simply household appliances for personal use. If we plan our technical, regulatory and business integration well, these distributed energy resources can become part of Australia’s electricity infrastructure and drive down system costs for everyone.

All predictions indicate that distributed energy resources will play a major role in future electricity supply, demand response and grid services.

State governments have a critical role to play here in accelerating the integration of distributed energy resources into our electrical system and accelerating their participation in the energy and grid (ancillary) services markets.

A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) says state governments should do more to make the most of the A$25 billion spent to date by households and businesses on distributed energy resources – including rooftop solar, batteries, electric vehicles, and smart devices.

Distributed energy resources are quick to install, especially compared to large-scale wind and solar which can take several years and depend on the availability of transmission infrastructure.

Consumer spending estimated at A$150 billion on distributed energy infrastructure over the next 10 years should be mobilized by state governments to support the cheaper, faster and necessary decarbonisation of the electricity system to respond urgently. to climate change goals.

Australian households have spent over $15 billion on rooftop solar, over $1 billion on small-scale batteries, and spending on electric vehicles is growing rapidly.

Commercial and industrial facilities are also investing in solar power, batteries and, in some cases, smart control equipment to manage energy consumption.

If only half of Australia’s 14 million cars are replaced by electric vehicles over the next decade, that will represent a $140 billion investment in batteries on wheels.

According to the Australian Energy Market Operator (AEMO), by 2050, rooftop solar is expected to supply about a quarter of electricity consumption, or about 75 gigawatts (GW). At that time, approximately three-quarters of all dispatchable (“on-demand”) electricity capacity will be distributed.

Electric vehicles and batteries, along with flexible demand in homes, businesses and factories, will balance energy demand and variable renewable energy supply, as they will be the largest available capacity to draw on. As the sun sets or the wind speed decreases, the millions of distributed energy assets will be essential to ensure sufficient supply to the electrical system, alongside large-scale batteries and pumped hydroelectricity.

While the federal election outcome is expected to spur major advances in national renewable energy projects, the role of state governments is critical across the portfolios of energy, buildings, planning, transportation and of technology. Collaboration will be necessary for success. All of these portfolios need to be involved in smart policy and planning.

In particular, more efficient housing is the single best investment state governments can make to address energy poverty. Social housing needs to be upgraded to be more efficient, with the addition of rooftop solar panels and the removal of gas hookups and polluting appliances to create healthier homes that are cheaper to run for those who need them Not needed anymore.

The Institute of Energy Economics and Financial Analysis report makes 10 recommendations for state governments to consider – and implement – ​​to help accelerate the adoption and integration of distributed energy resources in Australia:

  1. Invest in more energy-efficient housing
  2. Electrify homes and exclude on-site gas from new developments
  3. Remove gas connections from all buildings, as gas has high methane emissions and its role as a transition fuel is over
  4. Legislate a demand response capacity requirement for priority appliances to ensure that larger appliances (such as air conditioners) can be used as a resource
  5. Extend the Demand Response Mechanism (DRM) to include distributed energy resources of aggregated households to enable wholesale DRM participation
  6. Upgrade energy efficiency programs to reward “efficiency” (time-of-day emissions reductions) and “pay-for-performance” programs based on actual verified savings
  7. Support for managed electric vehicle charging, including national technical standards and planning requirements
  8. Investigate how to update the Distribution Network Service Provider (DNSP) revenue regulations
  9. Determine the commercial viability of delivering stand-alone power systems (SAPs) and microgrids to remote, regional, and climate-vulnerable consumers
  10. Ensure compliance and enforcement of distributed energy resource devices, software and installations are supported by the Australian Energy Regulator (AER)

State governments can reduce the overall cost of the energy transition by playing a major role in optimizing the use of distributed household and business energy resources for the benefit of all energy consumers.

This will allow cheaper and faster decarbonization.

Gabrielle Kuiper is a DER specialist and IEEFA guest contributor. Read the new IEEFA report: Cheaper and Faster Decarbonization – What State Governments Can Do to Support Distributed Energy Resources