Australian Energy Market Operator (AEMO) says that “imminent and urgent” investment is required to keep the lights on in Australia in its annual 10-year outlook for power supply and demand. The backdrop of retiring coal power fleets and delays to deployment of new utility-scale renewables is creating a bleak outlook for power prices and energy resilience for businesses.
AEMO’s benchmark “unserved energy” predictions show a three-fold increase in energy shortfalls between 2025 and 2030 across all states in the national energy market. This shortfall is expected to reach 200% higher than the energy market operator’s benchmark for reliability. Long, hot summers are expected to exacerbate the strain on the grid.
To insulate energy market shockwaves, businesses across Australia are increasingly investing in distributed energy assets such as solar and batteries, standalone batteries and looking at ways to free-up load to ride out energy market risk. Technology platforms to operate these assets that predict grid variability and deliver better energy resilience while establishing formidable returns from grid instability are a key measure that businesses are adopting.
Why the Fuss?:
- Transition to Renewable Energy: Australia is in the process of transitioning its energy mix from traditional fossil fuels to renewable sources like solar, wind, and hydroelectric power. Challenges like grid integration, intermittency of renewable sources, and the decommissioning of old fossil fuel infrastructure are prevalent while delays in investment and approvals are hampering efforts.
- Energy Policy Uncertainty: While the AEMO ISP 2022 has laid a foundation, there remains a lack of a clear and stable energy policy in many areas. This is hampering investment and decision-making in the energy sector. Frequent changes in policies and uncertainty around future directions is detering investors and make long-term planning difficult.
- Aging Infrastructure: Much of Australia’s energy infrastructure, particularly in terms of transmission and distribution networks, continues to age and requires significant investment to maintain reliability and efficiency. Upgrading and modernizing infrastructure to accommodate new technologies and consumption patterns remains slow to implement at scale.
- Reliability and Grid Stability: As renewable energy sources like solar and wind become more prominent, maintaining grid stability and reliability is more challenging due to their intermittent nature. Implementing energy storage solutions and advanced grid management techniques remain important to address this challenge.
- Energy Affordability: Energy prices remain a significant concern for all Australian businesses. Balancing the need for investing in clean energy technologies with ensuring affordable energy for business remains a key challenge for policymakers with no clear solution and significant political muddling.
- Integration of Distributed Energy Resources (DERs): The rise of rooftop solar panels, battery storage, and other DERs presents ongoing challenges in terms of managing their integration into the grid, ensuring fair compensation for excess energy fed back into the grid, and maintaining grid stability.
- Market Design and Regulation: The structure of the energy market and regulatory frameworks needs to evolve to accommodate the changing energy landscape. Ensuring fair competition, effective pricing mechanisms, and clear roles for different stakeholders are ongoing challenges.
- Community and Stakeholder Engagement: The energy transition faces resistance from communities, particularly in regions heavily reliant on coal-based industries. Engaging with these communities and addressing their concerns while moving towards cleaner energy sources is a complex challenge.
- Investment and Financing: Attracting sufficient investment for large-scale renewable energy projects and maintaining investor confidence requires clear and consistent policy signals, as well as innovative financing mechanisms.
- Technological Advancements: Keeping up with rapid technological advancements in energy generation, storage, and distribution is challenging for policy-makers to keep up with. Incorporating new technologies effectively while managing risks remains and very difficult challenge to overcome.
Battery storage together with optimisation technology is a key enabler to bringing a business’ energy assets to life. Co-optimised with other energy opportunities such as solar, flexible load or back-up generation provides a formidable energy powerhouse for any business site. In combination, this powerhouse delivers energy cheaper, more reliably and opens significant value opportunities from the energy market.
So what are you waiting for?