Significant action is needed to ensure that the energy grid in Australia is equipped to manage as the nation transitions to a clean energy future, a major building industry conference has heard.

And buildings will play a critical role in helping to manage the transition.

During a panel session at the Transform conference hosted by the Green Building Council of Australia (GBCA), speakers outlined the challenges in ensuring that Australia’s energy grid is equipped to operate as the nation transitions to clean energy. The panel also highlighted initiatives which are being undertaken in this area.

Panellists included Paul McCartney, Clean Energy Futures Officer at the Clean Energy Finance Corporation (CEFC); Anthony Manning, Chief Executive at School Infrastructure NSW; Fiona Wright, Executive Group Manager, Climate Change and Energy for the ACT Government; Dr Stephen White, Energy Efficiency Leader for CSIRO. The discussion was moderated by Andrew Fischer, Head of Policy and Research at GBCA.

The discussion occurred as Australia faces a challenge to deliver secure and reliable energy as we transition away from fossil fuels.

In its 30-year Integrated System Plan  for the National Energy Market released last year, the Australian Energy Market Operator (AEMO) said that in order to deliver net zero energy by 2050, the nation requires:

• a ninefold increase in utility scale renewable energy generation (solar and wind),
• a fivefold increase in distributed solar PV capacity (e.g. rooftop solar) and substantial growth in distributed storage (such as batteries in homes and businesses to complement rooftop solar);
• a tripling in firming capacity through dispatchable storage (large-scale batteries, pumped hydro or other storage) as well as hydro generation that runs on natural flows (i.e. not pumped hydro) and gas generation for peak loads and firming.
• Around 10,000 km of new transmission lines to connect new renewable energy and storage developments.

From the viewpoint of grid stability, the transition provides challenges in two areas.

First, the grid will need to provide stable energy supply even as an increasing volume of generation comes from intermittent sources.

Beyond that, as large fossil fuel plants give way to renewable energy, a growing volume of generation will occur through widely distributed sources such as homes, businesses and large-scale renewable/storage that will need to be connected.

What is being done?

At a national level, McCartney says the CEFC is facilitating a number of long-range transmission projects through is Rewiring the Nation program that was introduced last year and was allocated $20 billion in funding in the 2022 Commonwealth Budget.

The program aims to rebuild and modernise the energy grid in line with the aforementioned 2022 Integrated System Plan – which aims to provide a blueprint to ensure that is Australia is able to manage the energy transition in a manner which delivers secure and reliable energy.

According to McCartney, the primary focus of CEFC investment in this area revolves around long-range, high-voltage transmission lines.

These include:

• Project Energy Connect – high voltage transmission lines connecting South Australia with Wagga Wagga in NSW.
• VNI West, an interconnector from Victoria to NSW to connect into Project Energy Connect.
• HumeLink, which will connect Snowy 2.0 though to Sydney and load centres.
• The Hunter Transmission Project which will facilitate the transfer of electricity generated by renewable energy zones in Northern NSW to the Hunter, Greater Sydney and Illawarra regions; and
• The proposed Marinus Link that will connect the mainland in Victoria with deep storage in Tasmania via underwater sea cables.

In addition, McCarthy says CEFC though Rewiring Australia is looking at providing funding for some of the five renewable energy zones which currently under development in New South Wales.

Moving to a state/territory level, Wright says a key initiative of the ACT Government involves the preparation of an integrated energy plan which is currently under development.

The plan will facilitate a 20-year vision that was announced by the ACT Government last year to completely electrify Canberra by 2045

That vision was announced after the Territory became the first jurisdiction outside of Europe to have its electricity supply fully powered by renewables in 2020. Having decarbonised its electricity supply, the Territory sees electrification as key to achieving its objective of net zero by 2045 as this will avoid remaining fossil fuel emissions which are generated through gas. (Currently, gas accounts for around 20 percent of the ACT’s carbon footprint.)

According to Wright, the integrated energy plan will help to ensure that decarbonisation of Canberra’s energy system occurs in an orderly manner.

Should this not happen, Canberrans may be left with unreliable networks, instability, overinvestment in some areas and greater costs for consumers.

This is especially important as many households are already switching to more energy efficient electric appliances. There is a need to ensure that those who are not able to do this are not left behind and connected to a gas network that is burdened by spiralling costs.

Whilst full electrification may at first appear to be contradictory to the idea of stabilising the grid, Wright insists that this will not be the case.

When it comes to energy, Wright says stability involves (a) having sufficient volumes of supply to meet demand at any point in time; and (b) an effective network that connects the supply at generation to where it is needed in terms of demand.

In terms of supply, Wright says establishment of the long-term policy settings has provided certainty around which investment decisions regarding generation assets can be made. This will enable the jurisdiction to bring on the supply that is needed in time to match demand.

This certainty provided by the long-term policy goals will also enable network operator Evoenergy to plan the timing of its electricity related investments along with the decommissioning of its gas assets over the next two decades. (In Canberra, Evoenergy operates both the electricity and gas networks).

Indeed, Wright says the ACT Government has worked closely with Evoenergy throughout the integrated energy plan development. This includes open sharing of information and aligning the work that is being done to Evoenergy’s regulatory cycles in order to enable the network operator to make investment and spending selections as needed.

Finally, Wright says the certainty and long lead time provided has enabled sufficient time for community behaviour to adjust and has provided market signals to the investment community that will help to encourage the type of investment which is needed in order for the transition to occur.

(Canberra will be fully electric by 2045)

The Role of Buildings

Turning to the role of buildings, the conference heard that opportunities to participate in the stabilisation of the grid are evident at both the portfolio level and at the level of individual buildings.

At a portfolio level, one example is the Smart Energy Schools Pilot Project in New South Wales.

This which aims to test how the state’s portfolio of almost 2,300 schools can not only generate energy to meet their own needs but also participate in the overall energy market by generating, storing and selling electricity back to the grid.

This program involves fitting schools with rooftop solar panels and batteries in a way which generates energy not only for the school’s own need but also local communities and the gird as a whole.

According to Manning, schools have several characteristics which can make them useful from an energy viewpoint.

These include having lots of buildings with large areas of rooftop space, being closed during the hottest month in January and not needing to be operated after 4pm.

Indeed, he says energy generated by schools may help to not only stabilise the grid but to improve the resilience of local communities by providing local energy when grid infrastructure is damaged during extreme weather events or natural hazards.

More broadly, White says individual buildings can have a role both in terms of demand management and in feeding energy back into the grid.

This is particularly the case as the AEMO plan referred to above envisages that by 2050, around three quarters of dispatchable energy in the grid will come from coordinated distributed energy resources and distributed storage. This basically refers to sources such as rooftop solar PV and batteries which are located within commercial or residential premises and which can interact with the grid in a coordinated way.

According to White, the potential here is significant. If done well, he says integration of buildings within the NEM can deliver backup power at a much lower cost compared with that which is provided by utility scale batteries.

(Speakers at the Transform conference hosted by GBCA)

Big Challenges

Not surprisingly, there are challenges.

At a national level, McCartney says the size and scale of the challenge should not be underestimated.

To even reach 2030 targets of 82 percent renewable generation, he says the nation needs to add around 28,000 MW of renewable generation by that time. This equates to around 400 MW of new renewable generation each and every month.

Moreover, he says the current poles and wires transmission system was not designed to handle such a volume of intermittent renewable generation.

Even now, he points out that this has seen problems associated with ‘marginal loss factors and curtailment’ – a wasteful situation which sees renewable generation sources needing to be switched off because the grid is unable to cope with the massive generation load.

Speaking of the ACT’s integrated energy plan, meanwhile, Wright acknowledges that setting 20 and 30-year policies is not easy.

For one thing, policies of this farsighted nature require a strong evidence base, the right political environment and a community that is willing to change. This is important as policies which involve multi-decade duration need to outlast several political cycles and thus require strong bi-partisan and community support.

Next, encouraging households to change is challenging at a time when families are dealing with cost-of-living pressures.

On this score, Wright says, the long time period given will enable households to electrify their homes on an incremental basis by choosing electric replacements as each gas appliance fails. There is no need to rush out and get an all-electric household.

Third, it is important to ensure sufficient that the workforce is sufficiently enabled and equipped to deliver upon the volume of work which is needed for electrification.

Finally, support may be required for vulnerable households to ensure that the electric transition occurs in a manner which is just and equitable.

Turning to buildings and their aforementioned role in the grid, White says two things must happen.

First, buildings will need to be digitised and connected to the energy system. This will most likely occur through smart devices which are connected to the cloud.

Beyond that, he says the energy sector will need to be proactive in terms of customer engagement.

This is especially necessary in order to overcome concerns from building owners about the cost and complexity which is involved in setting up systems to do integrate with the grid.

It will also be necessary as some building owners question why issues relating to grid functioning and connectivity are really their concern as an individual building owner – albeit with attitudes in this area evolving amid a growing sense of shared vision regarding the net zero journey.

In terms of engagement, White says the electricity industry will need to provide a one-stop-shop to enable building owners to connect their buildings.

In addition, energy companies should not rely on mass recruitment campaigns of building owners but should instead accept the energy that the building industry is willing to provide when this is able to be provided.

“If you read all the ARENA reports, customer recruitment, customer recruitment, customer recruitment comes over as a big issue,” White said.

“Hopefully, we can get around these issues. The fact that we are on the podium today (at the conference) is a positive sign about that.”