Red tape a red flag for power innovation

The West Australian, September 30, 2016:

Can you imagine a shearing shed powered by solar panels? What about an outback town backed up by a battery? At Western Power we’re making it a reality. Six pioneering farming families – our customers – are helping us trial a new way of providing electricity in remote areas that doesn’t involve poles and wires.

The trial, on the outskirts of Ravensthorpe, is important for our other approximately one million customers. That’s because it’s one of the ways companies around the world such as Western Power are thinking about how to respond to massive leaps in technology that are providing customers with more choice.

The trial near Ravensthorpe involves six battery-connected banks of solar panels and a small diesel generator. These so-called stand-alone power systems are big enough to power an average family house, shearing sheds and workshops.

The units are not connected to the network of poles and wires but the grid is remaining in place for the trial to give the families future choice.

Despite a very cold winter, the units are supplying more than 90 per cent of some families’ power needs from the sun, day and night, with help from the battery.

What’s in it for Western Power? Aren’t we doing ourselves out of a job?

Not really, because this isn’t a solution for all parts of the grid. In fact, in most parts of the South West we think it makes sense for our customers to remain connected so they can share or trade electricity, even make money on the side.

But to enable greater choice and efficiency, we have to convince regulators – and customers – that Western Power is more than just poles and wires.

Our modelling suggests almost 3000 customers over the next decade could be candidates for these systems, resulting in a saving of $457 million compared with eventually having to replace the existing &id in far-flung locations. And customers will experience better reliability.

We’ll even top up the diesel for them.

For the vast bulk of customers, there’ll be different technology (such as solar panels) that will work with the existing grid to help them save (and make) money if they choose to remain connected.

Why not just get on with it then? Unfortunately, we are prohibited by certain regulations from being a generator, for example.

So that rules out supplying solar panels and the diesel generator. Even the question of whether a battery is a generator or a storage unit is unclear.

We plan to roll out one of these industrial-scale batteries in Perenjori next year, to improve reliability. Rolling out more would depend on convincing regulators that these are efficient, and worthy, investments.

In the short term, to get around these roadblocks, Horizon Power and Synergy are helping us, as is a local WA success story, Energy Made Clean. We have created a solution for some customers in Ravensthorpe, but it’s the rest of our customers we are thinking about.

In the longer run, we need more certainty. To this end, and with the support of Energy Minister Mike Nahan, we’ve written to the national body that considers these matters the Australian Energy Market Commission.

In a test case that will be closely watched by other firms around Australia, Western Power is proposing to change the notion of the grid being defined by physical assets such as poles and wires to a “service area” to allow for things including stand-alone power systems.

This will ultimately place downwards pressure on prices, and improve the experience for all our customers – connected or not.

Simon Walsh Is Western Power’s executive manager, customer and corporate services