Origin Energy, Australia’s largest electricity utility, says the energy industry has underestimated the onset of disruptive technologies such as solar PV and battery storage.
In comments made to a conference hosted by GE, the largest supplier of energy equipment in the world, Origin Energy’s head of energy markets, Frank Calabria, said the uptake of distributed generation such as solar and storage had taken – and would likely continue to take – the industry by surprise.
“Technology will disrupt,” Calabria told a “GE at Work” session on Powering Australia. “I think we have underestimated the rate of onset –not just of solar PV, but PV with the combination of storage as a greater disruption potential. That is not too far away.”
The comments by Calabria shouldn’t be a surprise, given that Australia now has a total of nearly 3GW of rooftop solar PV, and one of the highest levels of rooftop solar penetration in the world. That, in turn, has led to falling demand from the grid, reduced wholesale electricity prices, and the mothballing of nearly a similar amount of coal-fired generation as a consequence.
There is now a growing recognition of the disruptive influences of solar within the Australian electricity industry – something they did not want to admit even just 12 months ago.
Energy ministers in NSW, Queensland and Western Australia admit to being taken by surprise by the take—up of solar, even after the ending of most subsidies. Queensland generators and network operators such as Stanwell Corp, Energex and Ergon Energy have also noted the profound impact of solar, although they vary about whether this is a blight, a blessing, or an opportunity to the future.
Later, Calabria told RenewEconomy: “No-one anticipated the level of solar to have penetrated the market as much as it has today …. So industries like ours have to face the prospect of underestimating what they can do in the future.
“If we don’t watch that – combined with what is happening in storage – we could underestimate its development going forward. It would continue to promote a trend of more generation in people’s homes.”
That, Calabria says, will clearly impact business models, although it is not clear how. Interestingly, Alex Wonhas, the head of the Energy Flagship division at CSIRO, suggested that distributed generation could account for up to 30 per cent of supply in Australia’s electricity grid.
That just happens to roughly equate to the share of residential and commercial demand. It also accords with the predictions of Citigroup analysts in the “Energy Darwinism” report earlier this month. And it fits in with the new direction of Europe’s biggest utilities. Read this story we publish today on how RWE, the second biggest utility in Germany, is abandoning the centralised model of generation in favour of distributed energy and targeted markets.