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1 INTRODUCTION
1.1 RACE for 2030
The Reliable, Affordable, Clean Energy for 2030 Cooperative Research Centre (RACE for 2030) is a 10-year, $350 million Australian research collaboration involving industry, research, government and other stakeholders. Its mission is to drive innovation for a reliable, affordable, clean energy future. RACE for 2030 undertakes research to support market transformation that will:
• Reduce energy costs • Cut carbon emissions • Increase customer load flexibility to allow increased penetration of renewables in the grid and increased reliability.
RACE for 2030 research is organised under four programs:
• RACE for Business • RACE for Homes • RACE for Networks • RACE for Everyone (covering cross-sectoral issues).
The RACE for Everyone program focuses on building industry capacity and developing skills for service providers, customers, and suppliers to better address rapid change. It has three research themes:
• Theme E1: Trust building for collaborative win-win customer solutions • Theme E2: Innovative foresighting and planning • Theme E3: Developing the future energy workforce
This Opportunity Assessment is for Theme E2.
The future of the energy sector has never been less certain. At the first stakeholder consultation workshop for this Opportunity Assessment, we asked participants to share their biggest sources of uncertainty about the future of the Australian energy system. Responses are grouped and summarised in Table 1.
Climate change, accelerating technological development and changes in customer roles and expectations are breaking down old models of energy supply and forcing an energy transition, but outcomes remain highly uncertain. Stakeholders shared uncertainties about the rate of uptake of technologies, the ability of the grid to accommodate those technologies and the role that government policy and market reform will play in energy transition.
As a result of these uncertainties, energy transition pathways and endpoints remain unclear. How fast will decarbonisation take place? What mix of technologies will emerge? How will supply and demand be balanced? To what extent will consumers participate in this energy transition? And how can the work of RACE for 2030 best contribute to the emergence of a future characterised by deep electricity decarbonisation and a low emissions economy – whilst ensuring reliability and affordability in electricity supply?
Category Sources of uncertainty
Policy and politics • Government policy (listed twice) • Political ideology • Shifts in government leadership (federal and state) • Regulatory inertia or bravery • The level of leadership from government • Climate policy ambition • Governance at local level • Policy of state and federal government • Slow pace of planning and especially regulatory process to new innovation
Customer choices and practices
Infrastructure resilience • Customer preferences • Customer behaviour with respect to new technologies • Overall demand forecast • Device and premise level usage profiles • Willingness in people to let energy companies control when they can charge things • Degree of flexibility in energy demand • Demand and variable renewable energy resource yields • Maintaining grid reliability in our energy transition • Climate change impacts on physical infrastructure and networks • Voltage management • Network buildout • Cyber-security related disruptions to network operations and integrity • Incorporation of DER into the grid • Role of electric vehicles (EVs) • Population movement (from coast inland with planned and unplanned retreats) - associated infrastructure disruptions
Rate of uptake of technologies • Rate and pace of electrification • The degree to which energy efficiency and load management will be fully recognised and utilised in the electricity system • Pace of technology adoption • DER uptake • Batteries and EVs • New technology impacts • Uptake of new technologies - magnitude and how users will adopt them - EVs, behind the meter batteries, and also investment in large scale infrastructure, e.g. transmission and wind and solar projects • Scenario for 3-10 years of a solar dominated grid • Pace of electrification • Batteries • EV • Technology costs
Market and pricing reform
• Market design • Prices • Impact of price reform • Tariffs • Incorrect net present value of coal fired power Transition pathways • The pace at which things change
Category Sources of uncertainty
• Decarbonisation of the transport sector • Pace and timeline of the coal fired power station closures • Demand for gas and potential transition fuels e.g. hydrogen, electrification
Many of the forecasting and planning practices in the energy sector were developed in a time when planning for supply-side investment to meet ever-increasing electricity demand was the norm. They are not adequate to the task of responding to the questions raised above. Disruptive processes associated with the rise of distributed energy resources, including solar PV, EVs, and smart energy management, require a new planning approach that is still emerging.
Theme E2 promotes innovative foresighting and planning as a response to these challenges. It seeks to blend traditional forecasting with more innovative foresighting and comprehensive distributed energy resource (DER) potential assessment to consider not just what trends suggest, but also what is possible and desirable.
1.3 E2 Opportunity Assessment
The E2 Opportunity Assessment assesses how industry, government and NGO participants in the Australian energy sector currently plan for the future and examines the potential for new foresighting approaches that can support the transition to a net-zero carbon future. The Opportunity Assessment is led by the Institute for Sustainable Futures (ISF) at the University of Technology Sydney (UTS), in partnership with University of New South Wales, Curtin University and Monash University.
This Final Report from the Opportunity Assessment includes a summary of findings from the literature review and stakeholder consultation, and a Research Roadmap that will guide the future work of RACE for 2030 under Theme E2. It scopes out four major research projects:
• A Decentralised Energy Data Inventory to fill data gaps relating to current uptake of decentralised energy products and services • A Least-Cost Energy Strategy to identify an optimal mix of centralised and decentralised energy opportunities to meet customer needs while transitioning to a net zero world • An Australian Energy Futures report series to support more robust and informed decision-making by reviewing and publicising possible futures for the Australian energy system • A Decentralised Energy Statement of Opportunities to draw attention to opportunities to deliver energy services through actions in distribution networks and behind the meter.
It also identifies several supporting projects that would assist the delivery of these four primary projects and build capacity for anticipatory whole-of-system planning in the Australian energy sector.
