A notoriously sunny nation is struggling to adapt to solar power. In September, Synergy, Western Australia’s (WA) state-owned energy provider – also the state’s largest – reported a loss off A$656.9 million ($449.96 million), citing the growing uptake of domestic solar to be the cause.
It seems Synergy is trying to depict what was an inevitable trend as an unfair surprise. The company should be more forthcoming with efforts to invest heavily in smart meter and storage infrastructure if this embarrassing situation is to come to an end.
Australia seems to be struggling with energy provision all over, as highlighted by a ‘Summer Readiness Report’ released by the Australian Energy Market Operator (AEMO) this week. The country is experiencing growing pains as it transitions away from traditional energy – smart meter and storage infrastructure deployment has not yet caught up with other developments.
Synergy’s colossal loss demonstrates just how painful this can be. The financial report has been embarrassingly recognized to be the largest ever loss of a state-owned company in WA. Revenues fell 4.7% to A$2.84 billion ($1.94 billion).
This was of little surprise to the firm, which forecast a loss in June after admitting its struggles competing with low-cost renewable energy. Synergy revealed to the WA Parliament in June that it had forecast total losses of A$180 million ($123.32 million) over the next 3 years.
Synergy place the cause of declining energy consumptions with an uptake of solar PVs. While annual KWh consumption per A1 consumption was 5,208 in FY16, this has declined by over 10% to 4,666 in FY19.
Writing in the company’s Financial Report 2018-19, Chairman, Robert Cole, noted that “customers are choosing to self-generate with solar PV at increasing rates, and investment in large scale renewables is continuing, leading to significant decreases year on year in the total volume of electricity supplied by Synergy’s scheduled generation assets.”
Synergy does offer some solar services. The company’s SolarReturn range of solar power systems and battery packages has been the companies attempt to capitalize on this market.
More recently, AEMO’s Summer 2019-20 Readiness Report has highlighted that the whole country is struggling to cope with newer, diversified and irregular sources of energy. The report outlines that 3,700 MW of additional capacity has entered the national energy market (NEM) since last summer. The largest contributor this has been solar based technologies – ‘rooftop PV’ (1500 MW) and ‘grid solar’ (1100 MW).
The report notes that “while this additional capacity makes new sources of supply available, the continued change in generation mix and location of new generation also bring operational challenges related to transmission capacity and the management of frequency, voltage, and inertia in the power system.”
In 2017, Northeast Group estimated that Australia and New Zealand would collectively invest $6.1bn in smart grid infrastructure over the following decade.
Furthermore, in 2018, export.gov – a US government service to advise business on international expansion – deemed smart grid to be a “best prospect industry sector” within Australia. Smart grid seemed to provide solutions to Australia’s problems of rising electricity costs, aging infrastructure, and political pressure to part with coal.
Western Australia (WA) provides a microcosmic case study of why smart grid and storage technologies must be the priority as developed nations slowly shift to renewable energy. The state has been flooded with solar panels, fuelling worries that the necessary smart grid infrastructure is not there.
10 years ago, there were 12,000 solar panel installations across the Perth metro area – WA’s main grid system. Fast forward to today and there are 250,000 residential properties with such installations, roughly 1 in 3. The combined capacity of this rooftop solar is larger than the system’s largest single generator – an 845 MW coal power station.
Uptake has been so strong that news broke in June this year that WA’s energy demand would fall 4% between 2019-20 and 2027-28. This was the first fall in demand forecast by AEMO. No doubt this has filled Australian energy providers with fear.
But experts have noticed that state infrastructure is unprepared for this level of expansion. Energy expert Adam McHugh has said “We talk about ‘smart’ this and ‘smart’ that these days. Well, solar at the moment is ‘dumb’ in Western Australia. We need to make it smart.”
Western Australia reflects the often-awkward moments in mass overhaul of an extensive energy system. Its not that people are refusing to change their ways, but rather, various elements are not developing in sync with one another.
There have been some government initiatives to support the smart grid industry. For instance, the government has pledged A$50 million ($37.1 million) toward the Smart Cities and Surburbs Programme, which supports projects that apply technological solutions to urban challenges.
One recent benefactor in Western Australia has been the Resilient Energy and Water Systems initiative at Curtin University, Fremantle, which received a grant of A$2,578,099. This aims to use block chain to establish integrated power, water and mobility systems comprising of renewable energy generation, battery storage, recycled rainwater storage and distribution, and an electric vehicle shared ownership trial.
There have been huge smart storage projects in South Australia. Most famously, Tesla’s 100MW battery, which savaged the state’s Frequency Control and Ancillary Services (FCAS) market in 2018, taking 50% of the work and driving the price down by 90%.
Smart grid supplier, Itron, partnered with Western Power in August, providing electricity distribution and metering upgrades to serve 240,000 customers. This followed Western Power’s March announcement of an intended state-wide smart meter roll out to improve the safety, economic efficiency, and reliability of the grid.
Australia seems to be shutting the door on coal, with the Liddell Power Station in New South Wales set to close in April 2023. Both state and federal government has convened to form the Liddell Taskforce to assess the impact this will have on energy price and supply.
Recent lawsuits surrounding Australian energy operators have likely brought this issue under extra scrutiny by stirring up public fear of blackouts. In August, the Australian Energy Regulator (AER) announced it was taking action against South Australia energy providers for its insubstantial preparations, which led to a 2016 day-long blackout affecting 850,000 customers.
The AER also launched legal action in September against Pelican Point gas-fired plant for failing to notify AEMO of its generating capacity. This led to a blackout effecting 90,000 properties in 2017.