The Emerging DER Market Is Creating New Opportunities

Residential solar installations boomed in Australia in 2020 due to lockdowns pushing more people to work from home than ever before.

 

This spike also resulted in a considerable breakthrough for distributed energy resource (DER) applications to emerge.

2020 has been a booming year for residential solar installation in Australia due to the lockdown and with more people working from home. And because of the spike in solar installation, it turned out to be a breakthrough year for distributed energy resource (DER) applications to emerge.

 

What is DER and what can people do with it?

DER – Distributed / decentralised Energy Resources are renewable energy units or systems that are commonly located in houses or businesses to provide them with power

Common DER assets include rooftop solar PV units, battery storage, thermal energy storage, electric vehicles & chargers, smart meters, and home energy management technologies. 

These DER assets not only allow consumers to generate energy in a cost-effective way for their own consumption, or use their energy more effectively and smartly, but also enable consumers to participate in a wider grid service to generate extra revenue from their energy assets.

One of the most well-known and widely discussed DER applications / concepts is a Virtual Power Plant (VPP), where thousands of households or commercial solar and battery installations are being aggregated to form a large power station with a collective power capacity comparable to or even larger than a conventional power plant.

Services a VPP can provide to the grid include responding to energy shortfalls, providing frequency control ancillary services (FCAS) and network support.

Consumers will be rewarded through credits to their electricity bills by participating in these network services, and therefore enhance their return on investment on their solar and battery systems.

 

Current market development at a glance: home solar-battery system and VPP services

The initial drive for the roll-out of home solar-battery systems, which are the hardware foundation of VPP services, was led by state governments and utilities. 

South Australia (SA) has been leading the game as a pioneer with the Home Battery Scheme funded by Clean Energy Finance Corporation. With the support of the Scheme, there are up to 7 VPP programs available for SA households to choose from.

NSW (although not state-wide), ACT and VIC also have their own state government funded programs in terms of interest-free loans, grants or rebates to support installations of home solar-battery systems.

Among all VPP programs available within the Australian market, the big 3 Gentailers – AGL, Origin Energy, and Energy Australia take big shares, thanks to their strong existing energy retail client bases.

Battery system manufacturers like Tesla and Sonnon also joined the competition by launching their own energy plans through collaboration with white labelling energy retailers.

In addition to this, more start-up installers and energy retailers such as ShineHub, Social Energy, Discover Energy to name a few, have rapidly emerged these few years. These ‘disruptors’ have been adding more product and consumer revenue options to the market.

To facilitate the growth and transition of DER applications in Australia, the Australian Renewable Energy Agency (ARENA) awarded nearly $10 million in funding to DER projects and studies to further integrate DER to the electricity system in 2019

That same year, ARENA also launched and led the Distributed Energy Integration Program (DEIP), bringing together government agencies, market authorities, industry and consumer associations aimed at maximising the value of DER for all energy users. 

In addition to this, the Australian Energy Market Operator (AEMO), under the support of ARENA, also initiated VPP demonstrations to gain more visibility of VPP behaviours from the network services and operations perspectives.


New emerging opportunities & roles 

Although a lot of work around regulations, economics and technologies has already been done, these will still need to be optimised before a more extensive adoption of DER applications. This will naturally create further opportunities for the talent market .  

Both the network’s operators and regulators need to develop relevant regulations, compliances and standards to enable smooth connection of DER assets into the utility grid, ensuring market norms as well as competitiveness in this emerging sector.

This is to ensure that mass application of the new technology does not damage the stability and reliability of the electricity network from a technical perspective, while introducing new & healthy competition to the market from an economic perspective.

On the technical side, power engineers are required to study the host capacity of the grid for DER asset integrations, and their impact to the reliability and stability of the electricity network.

On the customers’ end, to orchestrate thousands of different types of DER assets, a strong energy management system to automate the electricity dispatching and demand response is required. This will create job opportunities such as Aggregation Engineers, Big Data Scientists, Software Engineers, IT Project Managers, etc.

Furthermore, maximising the value of DER for end-users and energy retailers will rely on effective business model design, where energy retail tariff and pricing strategies may need to be developed. As a result, roles like Pricing Analysts, Product Design Managers, DER Strategists will also need to be created.

 

With extensive experience working with clients from a range of industries, Anávo takes pride in being the pioneer in recruiting for renewable sectors. If you are in a look for a skilled talent that is thriving to make a difference or want to learn more about a specific job opportunity, then get in touch with me.

 

About the Author:

Fiona combines her wealth of expertise in Photovoltaic (PV) Engineering with her passion and appreciation for Renewable Energy and Sustainable Development - particularly Solar and Wind Power.

Read more about Fiona Lin.

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