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Smart Grid, Smart City
National Cost Benefit Assessment
27 November, 2014 – Smart Energy ForumNewcastle Institute for Energy and Resources
Bob Bosler, Senior Consultant, Energeia Ranelle Cliff, Senior Project Manager, Arup
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•
Approach to Smart Grid, Smart City National Cost Benefit Assessment•
Outlook and technology optimisation results•
Strategic Context•
SGSC Report Conclusions and Recommendations•
Transitioning to a Smart Grid Future•
Developments since SGSC and implicationsPage 3
Energeia
•
Founded in 2009 in Sydney, now largest specialist consultancy in Australia•
15 full-time experts based in Sydney, with network of distinguished experts•
We seek out transformative projects which, by their nature:•
Are technically high riskPage 4
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National Cost Benefit Assessment
© Energeia 2014. All Rights Reserved
What is our
independent
, informed assessment of
the Business Case for the deployment of an
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Integrated Benefits Model
Network Model Customer Behaviour Model Tech Costs Year n (PV, CHP Storage) DC Network Price Impact Electricity Price & Tariff Structure Sample NMI 19 Sample NMI 20 …… Sample NMI 3 Sample NMI 2 Sample NMI 1 Δ Load profile 19 Δ Load profile 20 ….. Δ Load profile 3 Δ Load profile 2 Δ Load profile 1 Diversity
Model Forgone Network
Revenue Avoided Network Costs Storage Algorithms Age, Utilisation, Replacement Period AEMO Forecasts (Peak, Off Peak growth) Feeder Zone Sub Wholesale Price Impact Retail Price Impact
Wholesale Market Model
Tech Costs Year n (SFM, FDIR,
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Model Scope
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Six states
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Three scenarios (H,M,L economic growth)
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5 time intervals (2014 to 2034)
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1.5 weeks per model run
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Smart Grid Technologies Assessed
Pre-Payment Plan Critical Peak Pricing Seasonal Time of Use Capacity Tariff
Direct Load Control
Retailer
Solar PV Fuel Cells (CHP) Battery Storage EV Smart ChargingConsumer
Active Volt VAr Control (AVVC)
Fault Detection, Isolation and Restoration (FDIR) Substation and Feeder Monitoring (SFM)
Network
Smart Meter Infrastructure
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Business as Usual
Inclining Block Tariffs
Retailer
Solar PV Fuel Cells (CHP) Battery Storage EVs UnconstrainedConsumer
No changeNetwork
Accumulation Meters*Page 10
Medium Scenario
Outlook
Page 11 11 252 15,745 855 3,635 796 354 (4,981) (164) (1,334) (99) (2,514) (333) (265) 15,235 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SFM FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SFM FD IR AVVC Dy n amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 12 12 1 230 21 0 24 139 88 0 50 100 150 200 250 300 350
Seach Costs VCR Load Surveys PQ Surveys SFM Opex SFM Capex
Benefits Costs SFM Net
Benefit Pr es en t V al ue ($M 20 14 R ea l)
Page 13 13 4 15,741 24 1,310 14,411 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000
Seach Costs VCR FDIR Opex FDIR Capex
Benefits Costs FDIR Net Benefit
Pr es en t V al ue ($M 20 14 R ea l)
Page 14 14 9 846 98 1 756 0 100 200 300 400 500 600 700 800 900 1,000
Avoided Line Losses Peak Benefits Capex Opex
Benefits Costs AVVC Net Benefits
Pr es en t V al ue ($M 20 14 R ea l)
Page 15 15 252 (164) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 16 16 252 15,745 (164) (1,334) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 17 17 252 15,745 855 (164) (1,334) (99) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 18 18 252 15,745 855 3,635 (164) (1,334) (99) (2,514) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 19 19 252 15,745 855 3,635 796 (164) (1,334) (99) (2,514) (333) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SF M FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 20 20 252 15,745 855 3,635 796 354 (164) (1,334) (99) (2,514) (333) (265) 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SFM FDI R AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SFM FDI R AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
Page 21 21 252 15,745 855 3,635 796 354 (4,981) (164) (1,334) (99) (2,514) (333) (265) 15,235 27,183 0 5,000 10,000 15,000 20,000 25,000 30,000 SFM FD IR AVVC Dyn amic Ta ri ffs SMI EV Cha rg in g DG & D S SFM FD IR AVVC Dy n amic Ta ri ffs SMI EV Cha rg in g DG & D S
SMI Enabled SMI Enabled
Benefits Costs Total
Pr es en t V al ue ($M 20 14 R ea l)
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Total DGDS Capacity (NEM exc large ind)
0 5 10 15 20 25 30 2014 2019 2024 2029 2034 B A U Cap aci ty ( G W)
Cumulative Solar (GW) Cumulative Battery (GW) Cumulative CHP (GW)
0 5 10 15 20 25 30 2014 2019 2024 2029 2034 SG Capa cit y (G W)
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Change in Peak Demand
0 5 10 15 20 25 30 35 40 45 2014 2019 2024 2029 2034 P ea k De mand ( G W)
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Change in Consumption
0 20 40 60 80 100 120 2010 2015 2020 2025 2030 2035 Cons umpt ion (TWh)Page 25 25 0 5 10 15 20 25 30 35 1 2 :00: 0 0 AM 1: 30 :0 0 AM 3: 00 :0 0 AM 4: 30 :0 0 AM 6: 00 :0 0 AM 7: 30 :0 0 AM 9: 00 :0 0 AM 1 0 :30: 0 0 AM 12 :0 0: 00 P M 1: 30 :0 0 PM 3: 00 :0 0 PM 4: 30 :0 0 PM 6: 00 :0 0 PM 7: 30 :0 0 PM 9 :0 0 :0 0 PM 10 :3 0: 00 P M 12 :0 0: 00 AM De mand ( G W) 2014 BaU 2034 SG 2034
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Strategic context
Australian Government & COAG Energy Council
• Review of RET Development of new Energy White Paper
• Aust Govt and jurisdictional policies COAG Energy Council priorities & work streams
AEMC
• Power of choice program Expanding competition in metering & services
• DNSP pricing arrangements Retail competition review …… and LOTS more
AER
• Better regulation reform program Cost allocation guidelines • Service target performance incentive scheme (STPIS) review
AEMO
• Value of customer reliability
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COAG Energy Council
Strengthening Network Regulation
• Fairer network rules • A stronger AER
• Improvements to the appeals mechanism
Empowering Customers
• Strengthening opportunities for consumer engagement
• Enhanced access to better consumer data
• Opt-in TOU pricing
• Greater demand side participation opportunities
• Enhanced consumer protection
Enhancing Competition and Innovation
• Greater retail competition and innovation
• ‘Fair and reasonable’ return for all microgeneration
Ensuring Balanced Network Investment
• A national framework for reliability standards
• Investigating demand responsiveness of the regulatory framework
• Ensuring efficient transmission investment
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Stakeholder priorities
Network
impacts
Market
impacts
Consumer
impacts
Greenhouse
gas impacts
Price
impacts
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Conclusions and
recommendations
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High level strategic themes
Existing COAG
Energy Council
market reform
program
Cost reflective pricing for consumers Jurisdictional government and industry leadership Consumer education and industry training Innovation in technology and product deployment Need for interoperability standardsPage 32
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Fault Detection, Isolation & Restoration FDIR
• has the potential to deliver significant economic benefits
• heavily dependent on the value of customer reliability (currently being reviewed by AEMO)
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Smart Meter Infrastructure (SMI)
• Two value propositions modeled:
• Full deployment, termed stand-alone
• Customer-led, with the smart grid
case assuming uptake with installation of DG or DS • Enabling infrastructure
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SMI – (stand-alone or full deployment)
• Not yet economic (with the exception of some long-rural network topologies in some states) • Avoided billing, metering and customer service
costs for urban and short rural network not sufficient to offset capital costs for SMI
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SMI + Dynamic Tariffs + Cust Feedback
• Clear positive economic case for immediate deployment of dynamic tariffs in Australia (requiring SMI)
• If dynamic tariffs are voluntary, not all customers will adopt the offer
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SMI Deployment Predictions
2 4 6 8 10 12 14 16 18 2014 2019 2024 2029 2034 M e te rs (M il li on s )
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SMI + Dynamic Tariffs + Cust Feedback (2)
• Without dynamic tariffs customers will be presented with a strong financial incentive to install larger
distributed generation systems
• If inclining block (or flat) tariffs are maintained in Australia it is unlikely that distributed storage will be deployed due to a lack of financial incentives
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Customer Research Survey Results
Key findings relating to dynamic pricing
• High satisfaction with SGSC Customer Applications network & retail products
• Most popular trial products involved discrete peak events • BudgetSmart also popular
• Financially vulnerable customers derived more benefit and satisfaction from products than other households
Engagement with feedback technology vs. overall savings 0.54 0.3 0 0.2 0.4 0.6
Daily or 2-3 times per week
Weekly or less often
O ve ral l sav in gs
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DG + DS + SMI + Dynamic Tariffs
• Dynamic pricing drives the deployment of smaller solar PV systems and CHP compared to BAU • Balanced by the deployment of around 3.5 GW of
storage capacity
• Under BAU, negligible storage is likely to be deployed
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Electricity bill impacts (residential)
$1,712 $244 $47 $2,003 $156 $2,159 $420 $332 $1,407 0 500 1,000 1,500 2,000 2,500 3,000 SG Bill Customer with DG/DS
Cost of DG/DS Cross Subsidy SG
SG Passive SG Benefits BAU Passive Customer
Cross Subsidy BAU
Cost oF DG/DS BAU with DG/DS A nn ua l Bill I m pa c t ($ )
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Electricity bill impacts (business)
$8,390 $1,711 $3,083 $13,184 $2,108 $15,292 $9,251 $2,620 $3,421 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 SG Bill Customer with DG/DS
Cost of DG/DS Cross Subsidy SG
SG Passive SG Benefits BAU Passive Customer Cross Subsidy BAU Cost oF DG/DS BAU with DG/DS A nn ua l Bill I m pa c t ($ )
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Transitioning to a smart grid
future
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Transitioning industry and consumers
• Balancing:
• Risks and opportunities from new smart grid
investment
• Financial, reliability and environmental benefits
and issues
• People
• Industry and electricity consumers -
understanding, education and change
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Maximising the benefits and opportunities
• Need for interoperability standards
• Managing greater volumes of distributed generation
and introducing distributed storage
• Examining the business case for:
• Cost reflective consumer prices
• In-grid smart grid technologies
• Consumer feedback technologies
• Key costs and risks of inaction
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Post SGSC Developments (1/2)
© Energeia 2014. All Rights Reserved
•
AEMC Metering Contestability Rule Change (Ongoing, Draft
Determination due March 2015)
o
Likely to be retailer lead
o
Minimum functional spec likely to require smart metering
o
New and replacements likely to include smart meter functionality
o
Where there is a business case, retailers can roll out smart meters
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AEMC Distribution Network Pricing Draft Rule Determination (Aug 2014)
o
Requires tariffs to be based on LRMC
o
Networks already moving to capacity based tariffs (SA Power
Networks, Energex)
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Post SGSC Developments (2/2)
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AEMC Distribution Reliability Measures (September 2014)
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AER to develop reliability guidelines
o
MAIFI increasing from 1 minute to 3 minutes
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AEMO Value Customer Reliability (October 2014)
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Residential values have not changed substantially since 2007/08
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