The Australian market is a fascinating case study for those working in the PV sector and also interested in battery systems. There are currently over 2,56 million PV installations in Australia, with a combined capacity of over 18,5 GW. In 2010, there were less than 100 PV systems installed in the country.
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Australian PV installations since April 2001: total capacity (kW). Source: Australian PV Institute/Reproduction
This expansive increase in photovoltaic solutions is linked to several factors. Among them, the fact that many homes are located in remote areas, which makes access to transmission and distribution lines difficult and encourages the use of off-grid systems. Another factor is fires caused by natural causes, which end up damaging the structure of the electrical system in several regions of the country.
In Australia, fire is historic, is part of the regime of part of the Australian biome and can occur naturally, mainly due to lightning. In fact, part of the vegetation is adapted to fire – a situation similar to what we see in the Brazilian cerrado. This factor leads many Australians to invest in photovoltaic systems combined with storage to guarantee access to electrical energy.
Furthermore, the cost of batteries has fallen considerably in the country. According to research carried out by Mordor Intelligence, a market research specialist, lithium-ion batteries are expected to a CAGR (compound annual growth rate) of 22,58% between 2020 and 2025.
According to the research, the main factors driving the market are the emergence of new and exciting markets through electric vehicles and energy storage systems for commercial and residential applications, falling prices of lithium-ion batteries and the increased sales of consumer electronics.
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Domestic battery. Photo: Jonathan Mandl, Clean Energy Regulator
Another factor that cannot be disregarded and is vital for the expansion of solar energy, linked to the use of batteries in the country, are the subsidies from the federal government and some states in Australia.
How does the charging system work in Australia?
As in , Japan and California, Australia has adopted the FIT (feed-in tariff) system. The central idea of this system is to allow the sale of excess energy produced by DG (distributed generation) systems, especially photovoltaic systems.
This model is not currently adopted in Brazil. In our country, we have adopted the net metering system, a credit compensation scheme that allows the receipt of credits for the excess energy injected into the grid. These credits are later recovered by the consumer on their next electricity bills.
In the feed-in scheme, on the other hand, a fee is paid for the energy injected. Typically, the amount paid for the energy injected is higher than the electricity tariff, which acts as an incentive for the installation of photovoltaic solar energy systems. In other words, people earn money to generate electricity from photovoltaic systems.
Feed-in systems are generally focused on residential systems and are limited to a certain power range, meaning that the system does not apply to large power plants. In Australia, feed-in rules vary by region and by electricity supplier. They also vary over time. Several feed-in schemes have existed in the past and have since been repealed.
Initially, it was important to encourage the use of photovoltaic systems, but over time these incentives no longer made sense or their maintenance proved unfeasible. Currently, in Australia, the maximum power of systems that can adhere to feed-in varies between 10 kW and 30 kW. In all cases, energy producers receive a set amount per kilowatt-hour (kWh) injected, with contracts that can last up to 20 years.
Federal government subsidies
Another factor that makes Australia different from other countries is the incentive model adopted by the federal government. “Australia has a renewable energy incentive model called the Renewable Energy Certificate. This is something that Brazil does not have. This is part of a strategy called RDT (Renewable Energy Tag),” explains Rodrigo Sauaia, co-founder and CEO of ABSOLAR (Brazilian Photovoltaic Solar Energy Association).
According to Sauaia, renewable energy certificates are part of renewable energy targets and establish conditions, as if they were a valuation of renewable energy. These certificates, which show how much renewable energy a consumer has generated with their photovoltaic system, can be remunerated in renewable bond purchase and sale transactions.
According to the Clean Energy Regulator, the government body responsible for istering legislation aimed at reducing carbon emissions and increasing the use of clean energy, since January 2011, RECs have been divided into types:
- STCs (small-scale technology certificates);
- LGCs (large-scale generation certificates).
Small-Scale Technology Certificates
These certificates are created for eligible renewable energy installations, including photovoltaics. An STC is like a discount coupon given to anyone who installs a solar system or any other small-scale renewable energy system.
But how does it work? In general, the installer handles the STCs for the consumer. These professionals calculate the STC discount for their client, who can, among other things, exchange their STCs for cash. There is the possibility for the consumer to manage their certificates themselves, however due to the complexity, in most cases, it is easier to let the installer take care of this.
And how are STCs calculated? Each MWh of renewable energy generated is eligible for one STC, with the number of STCs depending on the size of the system, the installation location and when the solar system was installed. The STC scheme is scheduled to be phased out by 2030.
Virtual power plants and remuneration for small battery generators
Another particularity of the Australian market is VPPs (virtual power plants). But how do they work? Australian federal government succinctly clarifies that a VPP is a network made up of several energy generators distributed and operated as if they were a single larger plant.
In general, it is made up of photovoltaic generators – like residential solar energy systems with batteries. These solar and battery systems can be located in many neighborhoods and controlled centrally using WiFi technology and sophisticated software to charge or dispatch battery power.
Virtual power plant operators offer a variety of financial incentives and other benefits to households in exchange for ing a VPP. These incentives can include discounted solar and battery systems or rent-to-own plans, reward payments, lower electricity rates, backup protection, and credits on your electricity bill each time your battery is used by the operator during a VPP event.
But what is the purpose of a VPP? The main thing is to alleviate the load on the network where it is located. And how is this done?
The controller intelligently dispatches the energy generated by the individual units that make up the VPP. During periods of peak network consumption, the controller controls the charging or injection of energy into the small generator's batteries. In other words, during a VPP event, a generator can inject (sell) part of the electricity from its battery and/or charge it (buying electricity from the grid).
Currently in Australia there are several VPPs on the market. Among them, the Tesla Energy Plan, whose shareholders are the government of South Australia and the American company Tesla, owned by Elon Musk. To exemplify how VPPs work and their benefits, we can mention the case of VPP in South Australia. In October 2019, there was an unexpected interruption of the largest generating unit in the national electricity market, Kogan Creek, in Queensland.
On occasion, when the power system frequency fell immediately below the normal operating range, VPP South Australia detected this frequency variation and responded immediately to inject power from its d generators into the system to assist in recovering optimum frequency levels. The initial success of VPP South Australia has demonstrated the benefits that consumers/generators (prosumers) can bring to the grid.
Australia is a reference in research and development
The Australian market is also a reference when it comes to R&D (research and development), according to Rodrigo Sauaia. The executive is very familiar with the Australian and European markets.
“Australia has always been a reference in photovoltaic solar energy in the world and in the technical and academic world of the sector. To give you an idea, Australian research, development and innovation have been responsible for breaking world records in photovoltaic solar energy over the years, starting in the 1980s,” says the executive.
“Australian laboratories have had a series of exceptional performances in technology, and implemented innovations that have been brought to industry. Several of the developments that caused the price of solar photovoltaic energy to fall radically over the decades have their origin, or positive influence, on the development research that took place throughout this period in Australia”, he adds.
