ORIGINAL REPORTING: What U.S. DER Can Learn Down Under
What Australia's DER revolution can teach US utilities about the age of Trump; When federal support for clean energy faltered, Australian states took the lead on the power sector transformation. Sound familiar?
Herman K. Trabish, Jan. 24, 2017 (Utility Dive)
Editor’s note: Australia continues to set the pace for DER integration.
Policy uncertainty caused by the new administration’s initiatives and lack of them is unsettling a power sector in a profound, market-driven transition. But whether it will choose to harness or hamper the clean energy transition remains unclear. For power sector insiders looking for answers, Australia’s recent experience could provide some constructive lessons. From 2007 to 2013, federal support for renewables in Australia allowed wind and solar to significantly cut into the power mix down under. That growth stalled after 2013, when the election of a conservative government undercut federal support for utility-scale solar and wind. Even so, policies and market supports from the nation’s six states allowed distributed energy resources (DER) to reach transformative penetrations on Australia’s grid.
Australia does not have all the answers but its distribution system operators have been pushed by unique policy and economic factors and have shown how using new technologies and new policy designs can be workable. Though polls show a majority of Australians believe in human-caused climate change, power prices averaging as high as $0.30/kWh gave traction to arguments from conservative Abbott and Turnbull governments, like those made by President Donald Trump, for coal and natural gas consumption. By the end of 2015, Australia’s resource mix was nearly 15% renewables, but Turnbull’s administration continues to lower incentives put in place by previous governments for utility-scale wind and solar. Discouraged developers have left or are thinking of leaving the country. But the high rates, along with tariff reforms, drove DER penetrations to new highs. Advocates say new ways of more accurately valuing DER, like valuation concepts being developed in the U.S., will open the door to still more opportunity…