• Duck Curve
  • Peak Demand
  • Energy Technologies
  • Energy Technologies
  • solar PV
  • Residential Energy Storage

Residential Solar and Storage Begin to Transform the Grid

Alex Eller
Jul 06, 2016

Rooftop Solar

As electric grids around the world transition to a more distributed, intelligent, and clean system, markets leading the charge are facing issues that highlight the challenges to come for all.  These early adopter markets, including Hawaii, Australia, California, and Germany, have many similarities, such as relatively expensive electricity and very high levels of distributed solar PV penetration. While numerous studies have looked into the effects that the evolving energy system will have in these locations, a recent study from the Australian Energy Market Operator (AEMO) makes some bold predictions about the impact of residential solar PV and energy storage systems (ESSs) in particular. This year’s is the first AEMO study to take into account both residential energy use and production in estimates of future demand.

A number of factors are converging to drive unprecedented changes to the electricity industry in Australia. The country has some of the highest penetrations of distributed solar PV in the world, with PV systems installed in an estimated 13% of all Australian homes. Additionally, the country is expected to be a leading market for residential energy storage, with 2.4 GW of new capacity forecast to be installed by 2025, according to Navigant Research’s new Residential Energy Storage report.

Changes Ahead

One of the main conclusions from AEMO’s study is that these residential systems can dramatically shift when the grid’s overall peak demand occurs. While traditional peak demand has been on summer days or early in the evening, PV generation will push peak demand later into the evening, after sunset. In fact, the study predicts that the lowest point of net usage may actually become the middle of the day. This transition is already being seen in areas with particularly high PV penetrations, such as South Australia and Queensland. As peak demand is pushed later into the day, the risk of a rapid spike in net load arises as PV generation quickly ramps down in the evening, a demand spike known by many as the duck curve.

These changing demand patterns will bring about a much greater need for system flexibility both from generation sources as well as the demand side. Flexible loads in homes and businesses that can act as solar sponges by absorbing excess PV generation throughout the day will be critical to maintaining system stability and limiting the rapid increase in demand at the end of the day. As discussed in the new Residential Energy Storage report, residential ESSs are an ideal solution to provide the foundation of a home energy management system that maximizes the use of PV energy onsite while also providing a reliable source of ramp control for grid operators.

Exploring Solutions

Australia’s utilities have been working to address these issues and recognize the unique ability of ESSs to solve many of the challenges they face. Electricity providers Ergon Energy and AGL Energy have been actively exploring opportunities to own residential ESSs themselves to ensure the benefits these systems provide are shared between the grid operators and their customers. While these programs offer great potential, and perhaps a glimpse into the future of the electricity system, many questions remain around how the costs for these systems will be allocated and how to maximize the value they provide. Although there are a number of business cases that support distributed ESSs, most focus on only providing a single service. Unlocking the maximum potential will require new levels of collaboration between utilities, regulators, and vendors to capture the complex value streams these systems offer.