How plummeting PV prices will greatly change the electricity distribution network
I attended a workshop today in Melbourne run by iGrid, a consortium of universities and the CSIRO preparing a model of the intelligent energy grid of the future.
Its been identified that peak demand, which is rising faster than electricity consumption, is one of the most critical issues that a distributed generation network can address.
Dr. Muriel Watt, Chair of the Australian Photovoltaic Association and Project Manager with IT Power gave a presentation about the future pricing of PV, with similar themes touched on by Michael Williamson from Sustainability Victoria.
Solar PV prices have historically decreased by roughly 20% for every doubling of global production. At current growth trends this means that the cost of PV generated electricity in Australia is likely to reach grid parity within the next five to ten years. “Grid parity” meaning that the cost of generating electricity from a PV system will be equal to the cost of buying electricity off the grid. This assumes some government support.
The $8,000 government rebate for a 1kW system has resulted in around 100,000 Australian households now having PV systems. As prices continue to lower it will become economic for business to also install PV.
As prices approach grid parity and take up of PV systems grows strongly we should see a significant reduction in greenhouse gas emissions. Most of these systems will be grid connect. Along with the uptake of other technologies, such as small scale co-generation, the electrical distribution grid will be transformed from one that provides for a one way flow of energy to one in which two way flows are experienced.
This in itself will generate other challenges, such as the need for energy storage in the grid. Several presenters discussed electric cars as a storage solution. Most cars are in use for less than two hours a day, and the rest of the day, if the appropriate infrastructure exists, could provide storage capacity to the electrical network.
There will need to be significant investment into the electricity distribution network to make it smart. Regulatory changes will be needed to facilitate this.
The upcoming “smart meter” rollout in Victoria, set to start over the next few months, is just one step in this direction. The distribution network itself needs to get smarter (so for example voltages can be adjusted), and the information collected by the smart meters should be made available to customers to result in a more effective demand side response, particularly if time of use pricing is introduced. There is opportunity for innovative new products to use this data to shift loads and influence consumer behaviour.