Concepts such as centralised power stations and base load power are fast becoming a thing of the past in the minds of energy experts and increasingly, for the electricity industry itself.
Globally, electricity grids are moving towards decentralised models, with large numbers of generators able to quickly respond to demand because these models are the most economic and reliable option.
The primary reason for current high electricity prices and present grid unreliability is that our existing electricity infrastructure was developed with 20th century technology and the current regulations are inflexible.
While we have adequate generation capacity, what we lack is flexibility.
For example, the gas-fired power station at Pelican Point takes four hours to start generating electricity – slow moving when you want to manage load efficiently.
High SA electricity costs also relate to the fact that our peak demand is the highest in the country, primarily due to air-conditioning.
The reliability of the system mostly relates to the rules and regulations that control our electricity system.
All of these factors have very little to do with renewable energy and the future direction of the electricity grid
In 2016, all non-hydro renewable energy accounted for eight per cent of the electricity used in the National Electricity Market, a market that is under the control of the Australian Energy Market Operator.
We need to understand that outside of Australia, the transition to renewable energy is well underway.
Investment in renewable energy electricity around the world is now higher than in conventional fossil fuel-driven electricity. Germany generates about 30 per cent of its energy from renewable sources. Its electricity costs have not increased as much as ours have and Germany has a more reliable electricity system.
In a carbon-constrained world, national decisions to invest in renewable energy are being made because ultimately, that investment offers economic opportunities for countries like Germany.
The big question for SA is whether we choose to adopt this trend or step back and wait and see.
The CSIRO has shown that a grid with an energy source from nearly entirely renewable energy, using just solar and batteries, can deliver a reliable grid and is cheaper than doing what we have traditionally done.
Recent dramatic increases in electricity charges to businesses relate more to the uncertainty over the future of the electricity grid than anything else and those increases are occurring across the country.
And as old power stations close, this uncertainty will only increase.
Overall, we need to recognise that continuing with old systems will only increase costs and will not be viable in a carbon-constrained world.
Fundamentally, these changes involve customers recognising that they are participants in the electricity system not just users and so should make appropriate investments.
Customers can do something about reducing energy costs by investing in solar PV, and adopting energy efficiency and demand management practices.
Since air conditioning and refrigeration are large contributors to peak demand, these particularly require attention.
Thermal energy storage solutions do exist; examples include the chilled water storage at IKEA and the phase-change energy storage developed by UniSA.
Battery storage can be economic for households, but is unlikely to be used for businesses in the short to medium term.
With solar PV, demand management, thermal storage and batteries in some cases, commercial customers can go directly to the spot market and buy electricity when prices are low and avoid buying electricity when prices are higher.
Furthermore, implementing these technologies locally will
mean we can run off-grid if there is a power outage.
Technologies such as solar PV, batteries, thermal energy storage and peak demand, all enhance grid stability by reducing peak demand, contributing to a more reliable electricity system.
Furthermore, all energy storage types can be used in frequency regulation and network support.
Virtual power stations provide another means of integrating these technologies to deliver a more cost effective and reliable system.
Larger scale renewable energy systems, including concentrating solar power plants, large scale batteries and pumped hydro, can all play an important role in supply. Ultimately the market will decide which solutions are best for which circumstances.
The question is not which technology path should be taken, but whether it should be renewables- based or fossil-fuels-based.
Currently new renewable energy is about the same price as new gas for power generation, while new coal, based on conventional technology, is still slightly cheaper.
Ultimately, investing in new gas-fired power is fine but our gas prices are effectively linked to global oil prices, hardly a measure of certainty. Investing in a new interconnector simply links us to fossil fuel prices in the eastern states, as well as any uncertainty they will experience.
Investing locally in a renewable energy system, means prices can be controlled and it gives us more certainty.
Renewable energy technology will always reduce prices because their operating costs are lower than fossil fuel generators.
The issue of the variability of renewable energy and how energy storage is too expensive, is often misunderstood.
Globally these systems are being effectively and reliably implemented. There are always challenges and refinements associated with the adoption of new technologies, but everywhere, they are being overcome.
We have already seen significant installations of renewable
energy and now SA needs to focus on demand management and
energy storage to continue the transformation of our system.
In SA, we are nearing 50 per cent renewable energy.
Solar PV on rooftops is a financially attractive investment and will continue to grow. The capacity to store power, whether thermal or electric, is economic in many circumstances and inevitably will be implemented at the domestic, commercial and industrial level.
Large industrial customers are considering their own renewable energy plants. The move towards renewable energy, with a decentralised electricity grid, will actually increase reliability, leaving costs much more in the hands of the consumer, by managing their usage.
The recently announced South Australian Government’s power plan is a good start to providing energy security and a managed transition to clean supply. However, the gas-fired power station which is part of the mix to ensure energy security, could also be achieved with well-proven large-scale energy storage technology integrated with renewable energy power generation.