what our network will look like in the future

The way we use and consume electricity has experienced a dramatic change in the last decade, and there have been many teething pains along the way.

For over 100 years, since the commercial distribution of electric power started in 1882 for lighting in homes, we have operated on a centralised system that fed electricity one way.

But the rapid take-up of solar panels and batteries on homes around the world has changed everything, with the flow of electricity now flowing in two directions.

Any excess solar power that our homes produce is fed back into the grid, and we receive feed-in tariffs, credits for our trouble. But this has not been without its problems. This process is called bidirectional flows, and that energy we are returning to the grid is called excess distributed energy resources (DER).

But what happens when the power is flowing backwards on sunny days and overtakes the electricity demand? We see negative pricing, a phenomenon we experienced in April this year when prices plummeted to as low as $-27.80. Essentially, it means suppliers are paying people to take their electricity because supply outweighs the demand.

So we have an issue. The adoption of solar in Australia has been incredible, and more than two million homes now have solar PV units installed on their roof, which is over 20 per cent of the country. That number is only going to increase, so how does our electricity system evolve to handle the volume of power being sent back to the grid?

 

 

The downside of negative electricity prices

 

It may sound like a win for everyone; negative prices drive down bills and encourage more people to take up renewable solutions, right?

While this may be true, negative pricing is unsustainable. First of all, the electricity providers are not going to just give money away, not for any length of time anyway. In July this year, the Australian Energy Market Regulator has already flagged a network fee and other countries have to pay a surcharge when prices drop below zero to effectively compensate the electricity providers.

If people are facing larger bills for providing solar energy back to the grid, they are far less likely to take up the technology.

 

 

So what can we do to prevent negative electricity prices?

The simple solution is to build more infrastructure that can handle the overload of electricity, but this is a Band-Aid solution. What we are more likely to see is an energy revolution that will be able to manage a market where people are not just consuming properly, but selling and swapping as well.

The architecture will remain largely the same, how it is operated needs to change. The one-way street is redundant, and we need to see a system where individual homes can trade their excess energy based on demand response, instead of tipping electricity into an already overloaded network.

Watch this space, that energy revolution is coming.

 

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