October 25, 2024
Rising availability of renewable energy sources in Australia and the increasing need for resilient power systems, are driving a constant shift and pivot in opportunities and innovation. Meanwhile, consumers are still grappling with the rising cost of electricity, the threat of reliability, and reducing their carbon footprint. The result is a trend towards electricity independence and self-sustainability with more decentralised energy solutions available now than ever before.
Throughout this article, we will explore one of the most commonly misunderstood examples of this, and provide clarity on the modern “Microgrid”.
Unfortunately, if we allowed this article to focus on a definition of a Microgrid – we would run out of time and space without ever delving into the understanding of one. As is clearly outlined on the Australian Government’s Energy Innovation Toolkit, there is no definition of a Microgrid captured within the Energy Legislation or framework. Most recently, this has taken a journey with terminology more clearly defined as a Stand-Alone Power System or SAPS, recently implemented in 2022. Unlike ‘Microgrid’, “SAPS” features over 300 times throughout the National Electricity Rules (NER) and carries a robust definition under the National Electricity Law (NEL). For the purposes of commencing this article, we will simply start with a Microgrid is generally referred to as “electricity networks that can be isolated and operated independently of the interconnected electricity system (the ‘grid’)”. With this in mind, we can now introduce you to Embedded Networks, and what we more commonly see as the journey clients want to go down, capturing a more practical application of this over-used term.
While we often see the terms "embedded network" and "microgrid"are often used interchangeably (perhaps without realising), there are key distinctions between the two.
An embedded network -
A microgrid, in this context, -
These are the two most common understandings we come across, yet in principal – we are looking at very similar projects and electrical networks.
Embedded networks, as we have now seen, form the basis of many microgrids in Australia. They provide the existing infrastructure and customer base that can be leveraged to integrate distributed energy resources and advanced control systems. Incorporating solar panels, batteries, and smart meters, allows embedded networks to be transformed into what would historically have been described as a microgrid. However, changes in Government policy, legislation and incentives would enable most to look at any newly built embedded network and see every element described above.
The AEMC reviewed the framework around SAPS and provides a comprehensive classification of microgrids based on their functionality and connection to the main grid:
Microgrids offer numerous benefits to the Australian energy landscape, including:
Microgrids have proven to be very successful in places around the world that have been affected by outages caused by natural disasters. With autonomous capabilities, they can ensure essential services continue operating in the case that the centralised energy grid is damaged. This use case is one being employed actively by the Victorian Government and the Australian Renewable Energy Agency with work on community and regional Batteries only expanding, creating the opportunity for further Stand Alone Power Systems and Microgrids.
Community involvement is crucial for the success of microgrids. Whether it’s a regional area or residential apartment building, microgrids empower communities to take control of their energy future and enable neighborhoods and towns to meet their energy needs locally. With the rise of affordable small-scale renewable energy systems, private electricity networks can generate a growing portion of their own electricity, reducing reliance on the grid and large-scale power plants. This lowers energy costs and provides opportunities for individuals to participate in energy markets by selling excess solar power back to the grid, managing their usage and accessing innovative new energy products that reward and incentive them to participate.
Australia is experiencing a surge in the development and implementation of microgrids, particularly in regional and remote areas. This trend is driven by several factors:
Despite this growing trend, the number of modern Embedded networks built to deliver these same services has not seen the same surge in demand and availability. Significant focus has gone into community level initiatives, as it should, yet there remains a strong opportunity to change the way these areas experience and utilise their energy.
Following this exploration into Microgrids and Embedded Networks however, when we look back at the services,characteristics and integrated services described above, and once associated with a Microgrid – it would be a fair question to ask what you’re looking for? An Embedded Network or a Microgrid?
The answer is simple - the modern Microgrid IS an Embedded, Private Electrical Network.
These energy networks can already deliver on advanced energy efficiency and management systems, take advantage of renewable energy generation and storage, participate in the wholesale market and generate financial returns through reduced pricing or investment into sustainable, continual improvement and future proofing of that network. Consumers still have market choice and rather than drive consumers out, it is driving service provision and energy innovation up. Accelerating the benefits, solutions, offerings and opportunities for consumers, owners, investors and users to get involved in supporting and enabling Embedded Networks within the National Electricity Market.
