Electricity - an essential service ... up to a point

Too long - Didn't read (exec summ)

This paper argues that we need to give up some "freedoms" to secure our electricity system for the future, and also keep costs down for all consumers.

The dynamic operating envelope model below provides one example of a possible new electricity customer connection model that would support the roll-out of Customer Energy Resources (CER) such as solar PV, home batteries and electric vehicles.

This model guarantees a level of service to all consumers, and allows for greater levels of access for when the grid is not at capacity (i.e. 98% of the time). Equally important is that this model would avoid the need to build masses of new electricity system to cope with these new peaks.

This model is not a new concept and parts of it are already under development across Australia. Now would be a good time to start considering whether customers are comfortable with this model, and how it might operate into the future.

Critically - This model only works if we rework our customer compact and agree that some electricity services are essential and some are not.

Historically essential

Benjamin Franklin once said: "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."

This quote often comes up in the context of new technology and concerns about government interference. We often refer to electricity as an essential service, but I would argue that there are aspects of electricity service that are not essential - particularly with respect to Customer Energy Resources (CER). In the following discussion, I argue that we need to give up some "freedoms" to secure our electricity system for the future.

Starting point - Yes, electricity is an essential service in today's world. We are terribly inconvenienced when the power goes out, and reportedly only a short number of days from societal breakdown in some scenarios. Freezers unfreeze, mobile phones stop working, tablets and laptops run out of juice.

However, this essential service concept doesn't hold in reverse does it? Does it also apply to smart loads such as EV charging and home battery charging?

Electrical devices support the essential "needs"

Proving that I haven't forgotten everything from my university days, here is Maslow's hierarchy of needs...

Electrical devices like air conditioners, refrigerators, stoves, washing machines, etc could be argued to support the needs identified at the lower 2 levels of this diagram. This is by no way proof that electricity is an essential service, although it clearly supports the delivery of some of our most basic needs.

Is selling electricity essential?

The short answer is no. (If that is all you need, please feel free to ignore this next section as I ramble on about how we got to this point.)

In South Australia last week, they lost interconnection with the rest of the National Grid. This was particularly poor timing on their behalf, as we are in spring and any self-respecting energy consultant would know that spring is the bumper solar PV yield period. Spring is when moderate temperatures, the incline of the planet, and generally low consumption all combine. For a number of years now we have watched as residential solar PV got close to generating more energy than was being consumed in the whole of SA.

This is all well and good when you can ship this excess energy to Victoria, but with the inter-connector down SA was looking like having way too much energy. Given the need to balance supply and demand on the grid in real time, this is a nightmare scenario for system controllers.

Thankfully, the local network company (South Australia Power Networks - SAPN) had a plan - well, two plans actually. SAPN were able to raise the network voltage to "push" enough of the residential PV off the system to keep the lights on. This is a rather agricultural method of reducing solar PV output, but beggars cant be choosers. Importantly, the lights stayed on.

SAPN has also been working a model called the flexible export limit. This approach allows for much more PV to connect to the system, and to set limits at times when there is not enough demand for that solar generation. This is generally a win-win for customers - you can typically install more PV on your roof, and the limits on generation only apply when there is too much energy AND not enough demand (.

The Regulatory bodies have worked closely with the industry in the design of flexible exports, and have even developed a way of measuring the overall consumer loss from when solar PV is curtailed. This value is called the CECV - link here.

So this brings me to my first point - The energy sector has adopted the view that solar exports can be curtailed. In other words, solar generation export from the home is not an essential service. This appears reasonable, as excess solar generation can create real problems for an electricity grid and electricity market prices are typically negative at these times.

Big generators are very familiar with AEMO directions to reduce output or turn off completely. Residential PV is now the largest single generation source on our grid and it is time that we folded residential generation into a similar protection system.

What about smart loads like batteries and Electric Vehicles (EVs)?

As a starting point, the Flexible Export model that I mentioned earlier is intended to also manage EVs and home batteries within the export envelope. Work is still in train to nut out just how these devices will communicate and work in harmony (ANU Interoperability, etc).

But what about the charging aspects of batteries and EVs?

If we were to treat batteries and EVs as traditional loads, we would simply build more grid to meet the extra demand that they represent. This has one major problem - it would cost up to $10 billion just to accommodate the EV demand, and more if we take up batteries in a big way. [That would be cost of $1,000 per residential customer - whether they invested in solar, EVs and batteries or not.]

This is $10 billion that probably doesn't need to be spent. EVs and batteries are smart devices and can be programmed to charge at the "right times". A smart charger for an EV costs a little more but can save the customer money (if charged on an off-peak tariff). Batteries are typically programmed to charge during the day and discharge in the evening.

The existing grid has more than sufficient capacity to support the charging of EV and batteries for the foreseeable future if they are charged during off-peak times. [Ref: ENA paper on EVs and capacity.]

Does this mean that we can just mandate smart tariffs and chargers and problem solved? Unfortunately not.

Markets and protection systems are not the same

Here is another bold assertion without facts: "Electricity system designers love markets, but don't trust markets". While this is certainly untrue in many circumstances, the grid that we have today is designed to support markets of many forms. The sale of energy, capacity mechanisms, frequency markets, reserve trading and network support markets are all examples of these markets.

Additionally, the grid is also composed of a cascading and overlapping array of protection devices. These devices primarily operate to isolate and protect the grid from faults, but also manage the risks of unforeseen demand (and as we saw in SA, unforeseen exports).

The more obvious protection devices are the household and premises fuses that protect each consumer. In turn there are fuses on the local low voltage circuits, the low voltage transformers, the high voltage sides of these transformers, high voltage feeder sectionalisers and reclosers, etc. The Zone Substations have a vast array of protection devices, and there are even more operating on the transmission and generation sides.

In other words, we have a range of markets that are intended to signal scarcity and incentivise behaviours, and we maintain a sophisticated protection system to manage when things don't go as expected.

When we add a group of batteries and EV to the mix, the protection challenges get even greater. These devices can respond to a number of inputs, not just price. It is this ability to respond en-mass that has system planners concerned. For example:

Scenario - future grid failure

It is a hot summer evening in 2035 with the grid already nearing peak demand. The Bureau of Meterology sends of a forecast of an impending storm for a major city. Upon receiving this notice, the EVs and batteries are automatically switched into charging mode (in case the lights go out). 

This example has the potential to increase demand on the grid well above any planned scenario. In all likeliood, the increase in demand would exceed network capacities and result in multiple faults across the residential system. 

With thousands of different fault locations, emergency crews would struggle to return power to all customers in a timely manner.         

Managing future EV and battery risk

There are many options for managing the risks identified in the above scenario. In all likelihood, we will need to progress many of these options in parallel to get the best outcomes.

The protection option that I would like to focus on is that of dynamic operating envelopes. Like the flexible export limits discussed above, these would operate to limit the operations of batteries and EVs in times of systems stress.

The following diagram provides an example of how this might work.

This model takes the flexible export model that we have operating today (light green) and reciprocates it for certain loads (smart or controllable loads). Harkening back to the original quote by Ben Franklin, this model would require us to give up a little "freedom" to gain a little grid security.

The additional benefit of this model is that it would also save all consumers from the massive grid construction that would otherwise be required.