Australia is in the midst of an energy transformation with crucial decisions to be made for the future of our energy system. This section explores the latest issues related to building the role of renewable energy in Australia.
The National Electricity Rules do not permit network service providers to provide electricity to customers from microgrid or off-grid supply as a distribution service. This denies customers the benefits of delivery of not only the most cost-effective services, but also potentially more reliable and safe services. In many cases, it will be cheaper to provide off-grid supply than to maintain and replace long power lines linking remote customers to the national grid. Moving to off-grid supply could potentially offer additional benefits such as improved reliability for remote customers and reduced bushfire risks.
To enable high penetration of solar and storage on the distribution network we need more intelligent systems in the home and on the network. We also need more sophisticated markets to enable customers to buy and sell energy to the network or to each other.
The growth in renewables, batteries and innovative technologies will lead to a vastly different looking electricity system to the one originally designed for a small number of large close to fuel-source energy generators. This rapid growth has led to a number of reviews and market reforms to ensure these new technologies integrate into the system effectively to be cost-competitive, as well as provide system security and reliability. The Finkel Review was the first independent, seminal, wide-ranging review to consider this issue, following the South Australian ‘system black’. There have been a number of market reforms as a result of the Finkel Review as well as other processes such as market body and Australian Competition and Consumer Commission reviews (e.g. system security).
The NEM’s transmission requires transformation so that it can support the efficient development, connection and operation of renewable energy projects. This will likely require an agile, strategic, timely and coordinated approach to new transmission augmentations and upgrades, improvements to the regulatory investment test for new capacity and streamlined connection processes, and optimal grid operations that are technology agnostic.
The National Energy Guarantee (NEG) was proposed as Australia’s future energy policy. However, the NEG was abandoned by the federal government shortly after Scott Morrison replaced Malcolm Turnbull as Prime Minister. While this effectively ended the chances of the policy being implemented in this parliamentary term, the states continue to work on the reliability component of the NEG and the federal ALP has indicated that it will take the policy to the next federal election.
Energy security relates to how the electricity grid or 'power system' reacts to events that may influence it. It includes the grid's capability to react and recover securely to major events such as faults or generation tripping, termed contingencies.