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 rapid uptake of distributed energy resources (DER) poses technical challenges for the grid, including limited visibility of DER generation and maintaining voltage within operating parameters. There are also challenges related to issues of access and equity.
The unprecedented scale of change demands that we develop and implement new decentralised markets and a fundamentally different system architecture. This future should support and enable DER monetisation, system optimisation and system balance.
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.
The continued lack of a long-term energy policy is affecting investment confidence in large-scale renewable energy and accompanying energy storage, with investment falling from a high of 4500 MW in late 2018 to less than 800 MW in each of the first two quarters of 2019.
In Australia's clean energy investment outlook, the Clean Energy Council continues to call on the Federal Government to proceed with the NEG and make other reforms to improve the investment environment for large-scale renewable energy in Australia.
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.