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1/5 of Australian households have a DER system, and it's growing

For years, Australia has had strong incentives for distributed energy systems, including solar PV, solar water heaters, and more. The incentives have included a certificate scheme similar to a REC, as well as state-by-state feed-in-tariffs. Combined with the excellent solar resource, and the price uncertainty created by (a) seesawing carbon and clean energy policies over the years at a federal level, (b) natural gas price volatility created by the allure of LNG markets, and (c) coal plant retirements, DERs have been extremely popular. In fact, the latest statistics from the Clean Energy Regulator show that over 3 million households, roughly 1/5 of all households, now have some form of small scale renewable energy systems, and of those roughly 2/3 are solar.

The Australian power market operator (AEMO) and the coalition of transmission and distribution companies (Energy Networks Australia) realize that high amount of DER penetration has great potential for providing an array of system benefits, as well as potential for system malfunctions and inefficiencies if not properly managed. They have recently published a study reviewing the state of DER in Australia and its potential. More interestingly, the study reviews three alternatives for how to manage DER from a system-wide perspective. Their three options include (1) a Single Integrated Platform with AEMO optimizing dispatch including network constraints; (2) a Two Step Tiered Platform, in which Distribution System Network Providers perform distribution-level dispatch within their own networks; and (3) an independent Distribution System Operator, which is similar to option 2, except that bed aggregators would provide bids to the iDSO, and the iDSO would aggregate those bids to each transmission connection point. Each has their pros and cons. As we in the US continue to look for the best way to transform our power sector, we would be wise to see how the Australian system unfolds.

Michael Leifman's picture

Thank Michael for the Post!

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Matt Chester's picture
Matt Chester on December 7, 2018

20% of homes with solar, wow-- that's the kind of penetration that would make even California salivate. Having various countries use different methodologies to increase DER serves as a great A/B test for what works, so hopefully, like you said, the United States can learn from Australia's example

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