Open Letter to Hon. Chris Bowen MP and the Energy Ministers of Australia

Solar rooftops image ex Canva to illustrate a Wattwatchers blog post

This open letter from Wattwatchers to the Hon. Chris Bowen MP – the Australian Minister for Climate Change and Energy, and Chair of the Energy and Climate Change Ministerial Council – encourages the nation’s Energy Ministers to further embrace rooftop solar and the growing role of electricity customers in the energy system. We propose that technology and data-enabled Home Energy Management Systems (HEMS) will be a key ‘intermediary’ between customers, the grid, and diverse service providers and market players.

Dear Minister

RE: The data-enabled opportunity to double-down on consumer energy resources

On behalf of Wattwatchers, a leading Australian digital energy company focused on empowering electricity consumers and companies with data, we encourage you and fellow Ministers to further embrace our nation’s globally-remarkable achievements with rooftop solar. Making this happen is as much a data and digital challenge as an engineering and economic one, or for that matter a customer and community engagement one. It requires new approaches to communications, cloud management, technology integration and interoperability, and privacy, security and cyber security.

We respectfully submit that the next meeting of the Energy and Climate Change Ministerial Council, happening this week, is an opportunity to decisively elevate customer-owned energy assets, and customers’ choices and behaviours, as top strategic priorities for reaching Australia’s 2030 emissions reduction and renewable energy targets. Achieving this will require collective ‘spine’ in political decision-making and policy-reform, as well as a ‘digital spine’ for the future energy system. 

The historic opportunity before you is variously known as consumer energy resources (CER), from the household and business customer point of view, or distributed energy resources (DER) from an industry perspective. Whatever you call it, the potential scale and speed of deployment, the relatively low cost to the public purse, and the transformational positive impacts on offer for customers, the system and the wider economy are simultaneously compelling and breathtaking. 

This homegrown path stands in stark contrast to the delays, pushback and politicised mischief-making being experienced with the big infrastructure also required for the energy transition and electrification: land-based wind and solar farms, transmission lines to connect them into the electricity system, spinning machines, grid-scale batteries, hydro and pumped storage led by the troubled Snowy 2.0 and Tasmanian ‘Battery of the Nation’ schemes, and most-recently the increasingly-contentious push into offshore wind. We do need these big things, but in the meantime…

The collective power of many small things

In simple terms, we’re talking about engineering many small things – small-scale solar systems, batteries, electric vehicles (EVs), and the many smart appliances and other electrical ‘loads’ in Australia’s homes and businesses – to add up to a very big thing. It’s the nation’s collectively-owned and operated ‘giga-generator’, a virtual solution, which will be made from millions upon millions of rooftop solar systems, coordinated with Internet of Things (IoT) and Artificial Intelligence (AI), balanced by synchronised demand flexibility, and ‘firmed’ by millions of small-scale storage systems, both stationary and the ‘batteries on wheels’ in EVs, and also local behind-the-meter, community and neighbourhood batteries.  

Behind this game-changing opportunity is a modern-day technology story about core digital and data themes for the clean energy transition and electrification: Dynamic v static. Transparent v black box. Decentralised v centralised. Futureproof v legacy. And customer-empowering solutions v old-style industry command-and-control.

Wattwatchers, as an all-Australian energy and climate technology innovator, has been part of this still-evolving story since 2007, when Australia had about 7000 rooftop solar systems. Today that number stands at over 3.5 million, with the average size of home systems much bigger than in solar PV’s early days.

The widely-recognised DER thought-leader, Dr Gabrielle Kuiper, has recently mapped out some of the key statistics that highlight what’s already been achieved in Australian households and businesses, including: over $25 billion of their own money invested in energy assets; 21.5GW of rooftop solar capacity across Australia; over 180,000 household batteries; and over 100,000 EVs. This is just the start of a powerful phenomenon, with clear prospects to double or triple rooftop solar capacity over the next one or two decades, and to multiply rapidly to millions of EVs with game-changing capabilities – vehicle to load, vehicle to home and vehicle to grid.

HEMS as the ‘intermediary’

To make this work, Australia needs to foster a new partnership between electricity consumers and the system, with a core focus on customer participation and equity, cross-referenced with the system’s need for stability, resilience and security. And everyone’s need for affordability. A key ‘intermediary’ for this new partnership, sometimes referred to as the ‘two-sided market’ for energy, is the concept of technology-supported and data-enabled Home Energy Management Systems (HEMS).

In the traditional electricity system, Grid 1.0, the main intermediary between the industry and the customers was the utility billing meter, a heavily-regulated technology designed to last for decades once it has been installed in customer meter boxes. Such solutions are ill-suited to rapid technological change and market dynamism, like what we are seeing with the rise and rise of rooftop solar and CER/DER, where a ‘technology generation’ can be five years or less, and flexibility is paramount! It is instructive that typical utility smart meters only ‘see’ rooftop solar as any export of solar from the home or business to the grid, and are ‘blind’ to generation that is self-consumed on site.

In a well-designed and effectively-implemented future electricity system, Grid 2.0, HEMS can be the multi-purpose, multi-capable, multi-sided interface between the home/business, the grid and all manner of relevant third-party service and solution providers. The HEMS will enable and empower customers to operate their homes or business premises in the various ways they want to, and need, including integrating with their home automation and ‘smart home’ options, and other ‘digital tools’ in their lives, including banking, health and lifestyle, and property management.

At their choice, and according to their user profile and site features, customers will be empowered to interact more deeply with the grid by opting into business models like virtual power plants (VPPs), 24/7 carbon accounting, grid-interactive buildings and demand flexibility programs, or simply by their choice of energy retailers and tariff plans. At the same time, the HEMS can enable the electricity system to access its needs via customers, with their authorisation, including gaining real-time visibility of CER/DER via data sharing, and sometimes (but not always) getting some level of control over customer assets and loads. Done well, this will build trust between the system and its many small, widely-distributed market participants, as well as enabling mutually-beneficial interactions and transactions.

This ‘winner’ has already been picked

We often are told that governments shouldn’t be in the business of trying to ‘pick winners’ when it comes to technologies, including energy-related technologies. Sometimes, and this is happening now in Australia, this advice is misused by people who don’t like the technologies that are emerging, quite clearly, as ‘winners’. Opposition to renewables, mainly solar and wind, from fossil fuel diehards and nuclear wannabes are pertinent examples.

Rooftop solar, however, is self-declared as a technology winner, and this is backed by markets and investors, and also by householders and businesses with their own money. Governments across Australia have helped to make this so, especially in the early years, with renewable energy certificates, generous feed-in tariffs and other incentive measures. But the winning success of rooftop solar has become largely self-sustaining, and there’s a lot of technology improvement, productivity gains and deployment growth still to come.

The way Australia’s rooftop solar global leadership has evolved means mistakes were made, and there are gaps in what we need to optimise its future, both in our homes and businesses, and also for the system and the wider economy. A key mistake, and consequent gap, is the electricity system’s failure to move early – a decade or more ago – to require DER/CER assets in general, and rooftop solar in particular, to be ‘visible’ to network, grid and market operators. The technologies to do this have been available, and improving all of the time, but the nous and will have been absent. There’s now an added risk that the same mistake will be repeated with a looming proliferation of EVs and charging.

There is a remedy, and it can be applied in selective ways rather than the traditional one-size-fits-all approach that are assumed for technologies like utility smart meters. This solution also will provide the backbone for the spread of HEMS, with different capabilities for different customer scenarios, and the capacity to share data with the system and multiple third parties – ethically, securely and beneficially for all involved. The solution is granular, real-time monitoring that sits behind the utility meter, in the customer’s domain, but connects beyond the home or business through the cloud. As HEMS evolves, it also will increasingly support the ‘transactive’ side of energy, with more diverse metering and billing arrangements including secondary, auxiliary and minor-flow metering, but happening in real-time to better engage customers.

Make consumer energy resources visible

We urge the territory, state and federal governments of Australia to prioritise making CER/DER visible, and therefore addressable and more manageable. There are numerous proven technology, service models and brand options for achieving this, and it’s an eminently reasonable proposition that consumers who want to connect their energy-related assets to the grid should share data that makes the distributed infrastructure more reliable, resilient and affordable for everyone.

Ultimately, this is a customer-centric path to grid-interactive smart and efficient homes and businesses, with dynamic solar optimisation, and a ‘smart grid’ that will be far smarter and more flexible than one relying primarily on industry-centric digitalisation and data. Good work is already being done towards this future, such as enabling dynamic and flexible control for solar and loads through adapting the international IEEE 2030.5 protocol for Australian conditions, creating CSIP-AUS. But a lot more is required, and it needs to be better coordinated, standardised across different solution offerings and pathways, and supported by policies and regulatory structures that are fit for purpose in a fast-evolving technological age.

Mandating relevant data capture and sharing for new-builds is an obvious starting point, for energy, carbon and sustainability reasons. New solar systems should be installed with a HEMS option that is capable of sharing data to the electricity system and third parties, and receiving instructions for remote control and scheduling. The same with EV chargers. And arguably the same for the addition of substantial new loads such as air-conditioning units. Retrofitting to existing systems and sites is a more challenging prospect, but is not beyond the reach of good policy-making and cross-industry strategy, with the right combination of requirements and incentives, or carrot-and-stick in more colloquial terms. Equity can be ensured by respecting the rights and choices of customers who have the means to pay their own way, and by supporting those who don’t. 

Wattwatchers supports calls for a national body with regulatory responsibility for technical standards for CER/DER. This body, however, needs to be more than ‘just another energy regulator’. Its work will straddle the technology and data-enabled convergence of land use and planning, mobility and energy. It will be exposed to customers and their wants, needs, choices and lifestyles, and also to the many other technology and service solutions at work in their households and businesses. It also will be exposed to the modern-day challenges that come with digital and data technologies, including consumer data rights, privacy laws, and security and cyber security imperatives. Now is the time to rethink the energy system and its role as an essential service, unlocking the power of consumers and their energy resources and choices.