In my recent talk at TEDx Adelaide I asserted that building our energy systems at a local scale:
- will be cheaper;
- will be more secure; and
- will be fairer.
The anecdotal evidence for these assertions comes in part from my Churchill Fellowship looking at community energy systems around the world.
This post aims to summarise those three themes.
Let’s start with some definitions. When I say local scale, I am talking about something that is bigger than an individual site and smaller than the centralised model we have at the moment. When I say energy, I am starting my thinking with the electricity system which is well on its way to going 100% renewable but expanding to include transport, heat and other energy uses that may ultimately use a combination of electricity and renewable fuels. When I say community I am keen to see people back at the heart of this essential service through its governance, ownership and investment.
We are racing toward a clean energy future, as we need to. South Australia’s electricity grid is an excellent-sized example of a whole system. It has relatively weak interconnection to the systems interstate (~25% of our peak needs) and therefore needs the capability to be self-sufficient. And we are experiencing the challenges of an energy system in transition on a regular basis.
I imagine a future system with solar energy in every neighbourhood. Enough to give a place minimum energy self sufficiency, combined with local storage. Storage can take the form of batteries but also energy that can be stored in its final form, like hot water and the thermal inertia of our buildings. I imagine each community having adequate local control systems to run independently if needed and to optimise supply and demand on a daily basis. I envisage significant large scale solar and wind offering cheap power, particularly to our major industries. Our local systems would be well positioned to exploit the times of cheap power. This positioning will improve as we add transport and heating energy to our electricity demand and as we generate renewable fuels from electricity as one of the components that provides long term storage of energy. Finally I imagine large scale storage from different battery technologies, solar thermal and pumped hydro to provide the balancing factor that we will need at different time periods – daily, weekly and seasonally.
So how is local energy more affordable?
At both the centralised and individual ends of a spectrum it is difficult to match supply to demand. Our state electricity system has an average load of roughly half our peak, 1500MW with of a peak of 3,000MW. This means half our network asset lies idle much of the time. At an individual scale you need to over-invest in generation and storage in order to cover all eventualities.
The opportunity at a community scale is to
- have diverse assets – generation from different sources and a number of forms of storage,
- have a better chance of matching loads to supply because there are more loads to choose from with differing needs and operating patterns
- treat the local network as an asset to be optimised as well
- reduce the demand on the high voltage network while using it to a lesser extent to benefit from cheap generation (eg surplus wind) and back up supply
- have an incentive to reduce costs through further energy efficiency and demand shifting
Prices don’t fall until we reduce our contributions toward the centralised generators and high voltage network but this is key to diverting our investments into local assets and using them well. I’ve written on this topic a number of times.
Is local energy more reliable?
One of the drivers for adding batteries to a solar household is energy security. There is nothing more annoying about being subjected to a blackout when you own a perfectly good generator on your roof. Batteries can fix the limitations of solar panels and supply your load during times when the grid is not available. The duration of this service might depend on how well charged your battery was at the time of the blackout.
A community approach to reliability reduces everyone’s reliance on the main network at the lowest possible cost. Diversity in our energy needs help a community balance its system during normal operation and in a similar manner, diversity in needs and energy availability during a potential blackout can help with managing priorities and ensuring available supplies are suitably rationed to last.
The energy system always grapples with the right amount of energy security because any more comes at a much higher cost. One of the ways we can break this down is to provide different levels of energy security for different energy needs. This won’t happen at a centralised level. The system is simply too slow and remote from customers to explore these opportunities with communities. If I could provide 99.9% service for my essential needs and only 95% for my flexible and luxury needs, the system could be a whole lot cheaper.
Will local energy make the system fairer?
Australia is currently seeing a swing from the ‘market will provide’ philosophy back toward discussions of planning and essential services. We’ve lost all the policy making infrastructure to really have a good conversation about fairness.
There have been a few low-income initiatives in the energy space recently but nowhere near enough and not as part of a larger take on energy market reform. One of the benefits of community energy can be to experiment with ways that a community brings everyone along on the path to a clean energy future.