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Sender: Ausnet Services – ABN 37 108 788 245
Address:
Locked Bag 14051
Melbourne City Mall Centre
Victoria 8001
Tel: 1300 360 795
Web: www.ausnetservices.com.au
To: Department of Economic Development, Jobs, Transport and Resources
Address:
121 Exhibition Street
Melbourne VIC 3000
By email to: [email protected]
Dear Sir/Madam,
Victoria’s Renewable Energy
Roadmap
AusNet Services commends the Victorian Government for developing a vision for
renewable energy in Victoria. We acknowledge the importance of developing and
implementing clear strategies and policies in relation to renewable energy, and
consider Victoria’s Renewable Energy Roadmap an excellent start for this endeavour.
This submission highlights some areas where our expertise may help inform the
development of the Renewable Energy Action Plan, including:

identifying initiatives and trials that AusNet Services has undertaken to better
understand the technical, commercial and regulatory issues and potential
applications of renewable energy resources and new technologies;

outlining areas where broader review of market structures and regulatory
frameworks will promote the efficient development and take-up of renewable
energy resources; and

clarifying the technical considerations that need to be addressed to ensure
renewable energy resources are integrated into the overall power system so
that they can be utilised most effectively.
There are significant technical and economic complexities associated with reliable
power system operation that need to be taken account in policy development. In
finalising the Roadmap we would encourage policy makers to engage with industry to
ensure that the proposals are robust, sustainable and do not result in unintended
consequences.
AusNet Services would be pleased to discuss any aspect of this submission with you in
more detail. Should you have any questions please contact me on ph. 9695 6622.
Sincerely,
Katie Yates
(Acting) Manager Regulatory Frameworks
AusNet Services
1.
Introduction
The Victorian Government released “Victoria’s Renewable Energy Roadmap” (the
Roadmap) in August 2105, and invited submissions from interested stakeholders.
The purpose of this brief submission is to provide AusNet Services input into this
process.
AusNet Services owns and operates the transmission network throughout Victoria,
the electricity distribution network on the eastern half of the State, and the gas
distribution network on the western side of Victoria. This diverse energy portfolio
means that AusNet Services has a range of interests and impacts from the Roadmap.
AusNet Services commends the Victorian Government for developing a vision for
renewable energy in Victoria. We acknowledge the importance of developing and
implementing clear strategies and policies in relation to renewable energy, and
consider the Roadmap an excellent start for this endeavour.
AusNet Services is particularly pleased to have the opportunity to participate in this
process, as it is evident that the successful implementation of a sustainable
renewable energy policy will require support and involvement from all industry
sectors. We would be pleased to discuss this submission with you further to clarify
any of the matters that we have raised.
2.
Summary
The key points which AusNet Services submission wishes to make in response to
“Victoria’s Renewable Energy Roadmap” are as follows:

AusNet Services agrees that renewable energy resources will have a very
important role to play in the energy systems of the future. As such we have
been active in supporting and developing renewable energy resources,
including trials of new approaches;

Given the significant changes occurring in the electricity sector, including the
substantial and increasing investment in renewable energy resources it will be
important to ensure that the supporting market frameworks and network
regulation are addressed to ensure that there is no barrier to efficient
development, and that efficient options are not prevented by overly
restrictive regulation that may not continue to be appropriate in the future;

The most effective customer outcomes will be achieved through proper
integration of the diverse components that will make up the future power
system, including the effective integration of new renewable energy
resources with the existing electricity networks; and

It is important that setting policy direction that has implications for the
development of the power system has appropriate input from the industry.
AusNet Services welcomes the opportunity to comment on the Roadmap and
are keen to participate collaboratively in its final development and
implementation.
3.
AusNet Services’ Initiatives
AusNet Services agrees that renewable energy resources will have a very important
role to play in the energy systems of the future, and that it is important for the sector
to understand and prepare for the implications. Consequently AusNet Services has
been active for some time in supporting and developing renewable energy resources,
with particular emphasis on implementation where this results in a lower cost to
customers than traditional network solutions.
This has become even more important in the changing electricity industry
environment with increased levels of uncertainty regarding longer term energy
and demand sources and consumption, and the preference for shorter term
solutions to be adopted for emerging energy constraints.
More recently AusNet Services has initiated trials of renewable energy resources and
new technologies to determine the potential application of renewable energy sources,
to identify the challenges that may arise from connection of renewables and to
develop solutions ideally in advance of the need for the commercial development of
these projects.
Examples of projects that AusNet Services have developed and supported include:

Trial of residential battery storage and solar PV. AusNet Services is now
finalising a 2 year trial of 10 households with solar PV, battery storage and
communication systems to investigate the value of distributed storage to the
network and to solar customers. From the network perspective this considered
both peak demand management as well as the ability of storage to reduce PV
exports and therefore voltage control issues, potentially allowing higher PV
penetration. AusNet Services is proposing a further stage to be a scaled
project with hundreds of storage units operating under an aggregated
control system;

Trial of a 1MW battery at Thomastown to test the technical, commercial and
regulatory considerations associated with network connected storage
facilities. This is currently the biggest battery installation for network support
in Australia;

AusNet Services has developed an LV network model for a pilot location (and
validated to measured data) to prove the concept of modelling the detailed
network impacts from of individual PV connections rather than relying on
standards, which may result in connection policies being conservative and
placing unnecessary and over-restrictive constraints on connection.
Investigations are now underway into incorporating the lessons from this
trial into our connections policies;

A proposal has been developed and approved to commence a trial of a
community network to demonstrate the scope for achieving optimised and
efficient operations in a smaller network incorporating renewable resources
and minimising the size of the connection to the grid.
These projects are intended to identify technical, commercial and regulatory issues
that will need to be addressed to ensure that such projects can be developed on a
sustainable and effective basis in the longer term. AusNet Services recognises that
there are a range of challenges associated with the implementation of renewable
energy resources, and that it is very difficult to identify and address these without
practical experience. We are therefore committed to continuing these programs to
ensure that as a distribution business AusNet Services is well prepared to meet the
changes that will be necessary in the future.
As a consequence we are supportive of the intention to carry out trials and provide
support for various investigations into renewable energy resources referred to
throughout the Roadmap. AusNet Services would be very happy to assist in any of
these projects from the experience we have gained in setting up trials and the
learnings that have already been obtained. We would be particularly interesting in
contributing to any trials that may be envisaged in our franchise distribution
network area.
4.
Market Structures and Regulation
The future of the electricity sector is changing rapidly and new technology and
innovation across the value change will inevitably change the way in which
energy is produced, transported and consumed in the future. This will include
increasing connection of renewable energy resources.
The options and choice available to customers is increasing dramatically, allowing
customer to develop and manage their own renewable energy resources to meet
their own supply needs. This will fundamentally change the operation of the power
system in the future.
The current market structures and regulatory arrangements were carefully
established to provide the necessary competitive environment, supported by
regulation of the monopoly industry elements, to encourage the most efficient
development of supply options and the market.
AusNet Services considers that the energy market frameworks and regulation must
continue to facilitate the most economic supply options for customers, as they are
currently intended to do. This is not to say that the current market frameworks and
regulations will achieve this in the longer term, and it is important to assess whether
or not this will be the case. There will need to be appropriate consideration given to
market structures and regulation to ensure that the anticipated value and benefits of
renewable generation can be achieved through normal market responses.
The Roadmap references investigations that are proposed to be carried out into
industry regulation and market structure to ensure that barriers are not being
placed on implementation of renewable energy sources. This for example
includes a review of appropriate regulation for storage, and assessing the value of
distributed generation and whether the current regulations appropriately
remunerate owners for this. It includes a review of feed in tariffs and whether these
remain appropriate.
AusNet Services supports reviews of regulations and administrative arrangements. We
also note that the scope of these reviews covers specific aspects of the existing
regulatory framework. As noted earlier we consider that a broader review of the
entire framework may be desirable to ensure consistency with longer term industry
direction and change, and to facilitate the effective development of renewable energy
resources.
5.
Effective Integration
AusNet Services agrees that renewable generation is a very desirable component of
an economic and effective power system of the future. We note that the most
effective utilisation of renewable energy resources will be achieved if they are
properly integrated as part of the overall power system. This involves all aspects of
the existing supply chain, but AusNet Services particularly wishes to draw attention
to the need for effective integration with the distribution networks.
The power system remains complex, and secure and reliable system operation requires
it to be carefully planned and operated within well-defined limits. The connection of
devices on low voltage networks without proper coordination in certain
circumstances may not be technically feasible. In the worst case this may result
in serious compromises in the operation and reliability of supplies to customers.
For example voltage control issues become increasingly significant in a “solar PV
rich” network, particularly if this involves long lengths of distribution feeders and
inverters may be very sensitive to outages resulting in lengthy delays for
reconnection.
AusNet Services also acknowledges the concerns expressed within the Roadmap
regarding the difficulties encountered by the proponents of renewable energy
resources seeking connection to the distribution networks, including the time
taken to process connection applications and the extent of the technical requirements
and the costs imposed on them.
There are very significant technical issues that are being faced for the first time by
distribution networks seeking to connect renewable generation on a large scale, and
these must be adequately addressed to ensure the power system continues to
operate effectively as the generation mix changes. In many cases the connection
of renewable energy resources can require extensive system redesign and new
approaches that take time to develop.
This is likely to be achieved most expeditiously and to best long term effect if they are
dealt with on a collaborative basis. AusNet Services welcomes the intent
expressed in the Roadmap to carry out an investigation into the technical
constraints on the connection of renewables and develop effective solutions.
6.
Industry Engagement
The Roadmap encourages stakeholder response to assist in the development of the
final document. Engagement with the industry to develop robust and sustainable
policies is important to ensure the desired objectives will be achieved.
The inclusion of industry experts will ensure the longer term impacts and realities are
well understood and inform policy development. In finalising the Roadmap we would
encourage policy makers to engage with industry to ensure that the proposals are
robust, sustainable and do not result in any unintended consequences. Industry
involvement will also be important during the implementation stage to ensure that
the outcomes can be achieved.
As previously noted there are significant technical and economic complexities
associated with reliable power system operation that need to be taken account in
policy development. Given that a number of these issues are unique or more
extreme in AusNet Services rural networks we are very interested in being involved in
this work.
7.
Conclusions
AusNet Services acknowledges the importance of the document released by the
Victorian Government entitled “Victoria’s Renewable Energy Roadmap”, and in
particular appreciates that it provides a vision for the future development of
renewable energy resources in Victoria.
AusNet Services agrees that the future of the energy sector is changing rapidly and
that renewable energy resources will from a critical part of the future. As a
consequence it is critical that preparation commences now as there are many factors
that require significant development to achieve the long term benefits that are
possible.
AusNet Services supports many of the initiatives outlined in the Roadmap aimed at
facilitating renewable energy in the future. We also note that there are many
challenges, some which are generally not well understood that will need to be
addressed to effectively achieve the desired outcomes.
This is a complex policy area that requires significant expert input to achieve the
best possible outcomes. AusNet Services has expertise and interest in this area,
and is committed to the further development of efficient and effective renewable
energy resources. We would be very interested in working with the Victorian
Government to achieve the best possible outcomes from this visionary policy initiative.
AusNet Services would be pleased to discuss any aspect of this submission with
you in more detail.