Creating a net zero electricity grid by 2050 is not only technically possible, it will save households $414 a year on energy bills, cut total spending by over $100 billion and make a giant dent in national carbon emissions, a joint study by CSIRO and Energy Networks Australia has found.
The Electricity Network Transformation Roadmap dismantles the view that high levels of renewable energy in the grid will be a security, reliability or cost issue.
“If we act now, the grid will be more secure and resilient, despite high growth in large scale renewables and two-thirds of small customers taking up solar and storage by 2050,” Energy Networks Australia chief executive John Bradley said.
Rooftop PV is key to the plan, with the 10 million solar systems expected to be installed by 2050 accounting for the second largest source of energy in the grid at 35 per cent, following wind.
Australia’s “world-leading” rates of rooftop solar installation meant that customers rather than utilities would determine over $200 billion in system expenditure by 2050, the study found. However, the full value of these investments will require the “multilateral exchanges of energy, information and value” – meaning the widespread storing, sharing and trading of energy.
Innovations reported by The Fifth Estate, such as Power Ledger, led by Perth-based Jemma Green, are already leading the way.
Mr Bradley said increasing the connectivity of small-scale solar would enable customers with solar and storage to offer “grid support services”.
“Networks could buy grid support from millions of customers with solar, storage, smart homes or in demand response programs, with annual payments worth $1.1 billion within 10 years,” he said.
“This orchestration of these distributed resources benefits all Australians as up to $16 billion in network infrastructure investment can be avoided by 2050, with network charges 30 per cent lower than today.”
The study urges regulatory changes to remove barriers.
“The agility with which networks can connect, integrate and incentivise new, lower carbon energy choices will directly influence the cost, fairness, security and reliability of customer outcomes,” it said.
CSIRO chief economist – energy Paul Graham said changes to pricing and incentives were needed as solar took off.
“The Roadmap finds it’s critical to move to fair and efficient demand-based charges before 2021 so unfair cross-subsidies don’t emerge as solar and storage take off,” Mr Graham said.
“These tariff reforms would ensure a medium size family without solar and storage is $350 per year better off in 2027.”
He said the carbon reduction potential of the roadmap was a 40 per cent reduction on 2005 levels by 2030, exceeding the sector’s share of current national carbon abatement targets.
Mr Bradley called for “clear market signals” to help the transition, with the roadmap finding that creating an emission intensity baseline and credit scheme would result in the lowest household bills during the move to net zero.
“A key objective of the 2017 review of carbon policy must be securing a stable and enduring framework, which will reduce the cost and uncertainty of decarbonisation.”