WA faces up to microgrid challenges

This article was first published in Australian Energy Daily © Peter Milne.

WA should embrace distributed energy with a reform process for its unique electricity market that could progress free of the complexities of the National Electricity Market, according to a WA parliamentary committee.

The report Taking Charge: Western Australia’s transition to a distributed energy future tabled yesterday found distributed energy resources could help manage network costs and bushfire risk as well as provide everyday benefits such as greater reliability, ancillary services and balancing.

Committee chair Jessica Shaw told parliament that WA was well-placed to implement reforms as it did not need to deal with the “toxicity and total energy policy dysfunction” of the federal government and could learn the NEM’s mistakes.

The principal DER in WA is rooftop solar - that AEMO has predicted will put system security at risk by 2026 as penetration increases - but the report also considered the future impact of increasing connection of batteries and electric vehicles to the South West Interconnected System.

State-owned Western Power uses 52% of its transmission assets to serve 3% of its customers with the result that an average connection in Perth costs between A$10,000 and A$20,000 over 50 years but in many parts of the network this cost exceeds A$240,000.

The Legislative Assembly committee found DER could sometimes defer, reduce or even eliminate pole and wire replacement and also often result in improved reliability and power quality.

A fatal 2015 bushfire near the south coast town of Esperance that destroyed a swathe of electrical infrastructure instigated the state’s first trials of connected DER, or microgrids, that provided solar/battery/diesel systems instead of a reconnection to the grid.

The WA Department of Fire and Emergency Services told the committee microgrids allowed network operators to better manage voltage, reducing the incidence of power spikes and asset failures that can ignite bushfires. The technology also reduced fire risk when it allowed the retirement of transmission lines that could ignite fires when objects fell on them and created sparks.

DEFS said that microgrids, especially with batteries, could also aid fire response by providing power to communications equipment and water pumps when distribution networks were damaged.

Shaw said WA's market structures, untouched since the wholesale electricity market was introduced in 2006, no longer reflected the physical realities of the system and was “not sending efficient signals for asset development and system operations”.

The WA Government established a taskforce in May 2019 to overhaul the market in the South West.

Two government trading enterprise dominate that market: monopoly transmission provider Western Power and the states’s largest generator Synergy that also has the small retail market to itself. The state also owns Horizon Power, that generates and retails power in communities not connected to the SWIS.

Shaw said for microgrids there was “considerable scope for duplication and overlap” between the three organisations and the report called for energy minister Bill Johnston to clarify their roles and ensure they collaborated.

Government ownership of the enterprises would make reform easier for the government, Shaw said.

“Network regulation and asset return structures can change without the need to negotiate or compensate multiple private network owners.”

The committee also wants Johnston to change regulations to allow operators visibility and control of microgrids and expand incentives for the development of cost-effective assets on a technologically neutral basis.

A review of network tariff to consider time of use and location pricing was called for, as were trials of different retail tariffs.

A revised network access code that encourages innovation was called for in response to the WA Economic Regulation Authority ruling that prevented Western Power from recovering some costs associated with its rollout of 238,000 smart meters.

ERA chair Nicky Cusworth said the authority had stated for some time that WA’s energy rules were “written for a world that no longer exists”.

“As the independent regulator, we do not have the power to change those rules, meaning that we are limited in how we can view and assess new technologies like microgrids, distributed energy resources and batteries, ” Cusworth said.

“We discussed the smart meter expenditure with Western Power many times, but ultimately concluded that the proposed expenditure did not meet the requirements of the rules.”

Main image: Kalbarri microgrid schematic. Source: Western Power