Project Overview

Duration: July 2022 – May 2023

Budget: $300,000

Contact: Laura Jones on 0419 386 270, email; Phillipa Watson on 02 6125 9062, email or Brenda Martin

Partner: Energy Consumers Australia

More information:

This project investigates how incorporating the values of energy users can improve how energy networks make decisions. This is especially important today, where we have distributed renewable energy at homes, making householders into both consumers and producers of energy. This project will first explore values held by energy users and the energy industry through focus groups and document analysis. Then it will develop conceptual decision-making models that illustrate how these values could be used by energy networks to make decisions.  

Project background

A critical reason we are undertaking this project is because the Australian energy landscape is changing and we want to make sure that deliberations reflect the new context and user environments.

In Australia three million households now have solar (photovoltaic) (PV) panels, positioning us as world leaders in rooftop solar installations. Uptake is expected to continue with nearly two thirds of homes anticipated to have rooftop PV by 2050. People are now adding batteries and electric vehicles (EVs), enabling best use of solar renewable energy. Collectively solar, batteries and EVs are being called distributed energy resources (DER) because of their distribution across homes throughout Australia. These DER technologies mean that households and small businesses are no longer only consumers of energy but now can also generate, store and export energy as well. This represents the most significant transformation of our Australian energy system to date.

Increased uptake of rooftop solar PV has led to electricity distribution networks having issues managing congestion on the electricity grid at certain times of each day and of each year. EV charging and electrification of current gas appliances could challenge existing network capacity in a similar way to how PV has. That is, it could likely cause further load and congestion on the grid and lead to electricity grids needing to extensively ‘reinforce’ the network.

The energy industry has proposed a lower cost approach to manage PV, battery grid support and EVs so related upgrades do not need to be made to the grid.

The lower-cost solution networks are currently testing and adopting involves using technology to get energy users who own PV systems, to reduce their PV generation to within what the network can handle in real-time, as needed. This lower cost solution can be implemented through a technology called Dynamic Operating Envelopes (DOEs). The intent is that DOE processes are invisible to energy users most often. The small reduction in generation is proposed by energy networks to be preferable to the increased cost to energy users to manage added generation on the electricity grid. DOEs have the potential to really help us all use the grid in the most effective way possible without costly upgrades. However, DOEs could impact people’s lives and lifestyles somewhat. For example, an EV could charge more slowly due to DOE management and may no longer meet the customer’s transport needs. The pros and cons of DOEs needs to be considered and consideration of both positive and potential negative impacts raises the question: how should the energy system manage capacity for future demand? This question cannot be answered by the industry alone. It will be critical that capacity is managed in a way that meets the values and needs of those who use the system.

This is where this project comes into the picture.

Values and needs of consumers cannot be guessed. We need to ensure consumer voices are a central part of decision making related to DER and DOEs.

Studies have shown that energy users have many values that influence their decision making related to their energy use, for example the Victorian Energy and Water Ombudsman’s Investigation of Consumer Experiences project showed there were a range of motivations, attitudes, and expectations that drove energy user investments in new energy technologies. Existing regulatory decisions and rule changes in the electricity market – which are key influences on the Australian electricity grid set up – have highlighted how everyday energy user values may not be incorporated in energy sector decisions. These regulatory decisions impact what energy users can do by setting the way they must interact with the energy system. This study therefore investigates how the values of energy users can flow through to energy network decision making.

This project aims to understand how the industry could manage future energy needs from the point of view of customers. It will explore customer expectations around how much capacity should be available, how it should be shared, and what decision-making frameworks are appropriate for networks to apply as they manage the network. Research questions are:

What are fair, just, and equitable decision-making models around network capacity and allocation from the customer perspective?

How does the future energy system build a model that manages network capacity in a way that aligns with customer values?

The project will first explore values held by energy users and the energy industry through focus groups and document analysis. Then it will develop conceptual decision-making models that illustrate how these values could be used by energy networks to make decisions. These models will be shared with energy users in focus groups to check and refine them before they are presented to industry decision makers. The ultimate intention is to take the models developed and share them with energy networks to support them to make decisions that better align with energy user values.