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• Testing the next generation of solar panels
• The secret to better solar cells? Think like a baker
• ‘Balcony solar’ and plug‑in systems could help cut your energy costs. But only if rules change

• We can’t air-condition our way out of a hotter future, says 91É«ÇéƬ expert
• 91É«ÇéƬ technology to help bring solar and battery storage to apartments
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Neil Martin  00:06

Welcome to 91É«ÇéƬ's Engineering the Future podcast. In this episode, we'll answer a big question: Why is the clean energy transition and the promise of cheaper electricity bills more complicated than simply adding more solar panels?

Anna Bruce  00:22

So we already have more than 35% of households in Australia that have a PV system, and many more households are now installing PV and also adding batteries to their PV systems. These home solar and battery systems are also a really important part of our energy transition, because they can reduce the amount that we need to invest in large-scale generation and transmission, and therefore reduce the cost of electricity for all consumers.

Neil Martin  00:54

That's 91É«ÇéƬ Associate Professor Anna Bruce, who says that while renewable energy brings huge benefits, it also creates technical challenges around grid stability, storage infrastructure, and managing electricity supply and demand. On Engineering the Future, we speak to experts and researchers who are embracing cutting-edge ideas and pushing the boundaries of what is truly possible. Join us as we discover how world-changing action starts with fearless thinking on Engineering the Future of Energy in the Home.  

Hello, and welcome to Engineering the Future of Energy in the Home. My name is Neil Martin, and I'm a journalist and STEM communicator working in the Faculty of Engineering at 91É«ÇéƬ. Joining me today to discuss how solar panels, batteries, and smart technologies are changing the way we power our homes is Associate Professor Anna Bruce from 91É«ÇéƬ. Anna is a theme leader in 91É«ÇéƬ's collaboration on energy and environmental markets, focusing on modelling, analysis, and integration of renewable energy and distributed energy resources into electricity industries. She also contributes to the International Energy Agency's photovoltaic power systems programmes and leads the Australian Photovoltaic Institute's solar mapping project. Many thanks for joining me, Anna.

Anna Bruce  02:24

Thanks for having me, Neil.

Neil Martin  02:26

It feels to me like the way we power our homes is changing pretty quickly at the moment. More and more people have solar panels on their roof. Many are adding batteries, and things like electric vehicles are starting to become part of the mix as well. So what used to be a pretty simple setup - you paid for electricity that came from the grid - seems to be getting a lot more complex, and households themselves are playing a bigger role, I think. And I guess, like with anything new, there's new technical terminology, and in this case, something I've heard from experts and read about is consumer energy resources. So, to kick us off, can you explain what consumer energy resources are?

Anna Bruce  03:14

Yeah, so consumer energy resources are those things like solar panels and batteries in the home, and also loads that can be flexible about their timing. So things like hot water or electric vehicle charging, or things like that. And we call them consumer energy resources because they are acting as a resource for the grid. So, for example, they're quite flexible, and they can ramp up to meet demand at times during peak load, for example. So they can help to match demand and supply and reduce prices in the electricity industry, and they also can, you know, because they're very fast responding, help to manage frequency in the grid as well, and and keep us at that 50 hertz that we need to maintain.

Neil Martin  04:08

And why do we need to maintain 50 hertz? What's so special about that?

Anna Bruce  04:12

So we have to have demand and supply exactly matching at all times on the electricity grid in order to maintain frequency within what we call the nominal operating band. And if we don't maintain that frequency really tightly, then some of the equipment on the grid will potentially fail if the frequency goes outside of that band, and then we can have, you know, as we lose generators or parts of the grid, that will cause frequency to deviate even more, and we can get cascading failures and blackouts. So, yeah, that's one of the tricky things about operating the electricity grid, is that we do need to have demand and supply matching at all times.

Neil Martin  04:59

And I think, I said at the start, the grid isn't just the grid anymore. It's these things that households have that can feed back into the grid, which is a newer thing. Australia especially is, I think, described as a global leader in rooftop solar. What makes our energy system different from other countries?

Anna Bruce  05:20

Yeah, so Australia is a global leader in rooftop solar. So we we do have around 4 million small rooftop solar systems in Australia, and yeah, more than 35% of houses in Australia have a PV system. And while there are other countries like Germany and Japan that that do have a lot of rooftop solar as well, you know, for example, Germany only has about 15% of households that have rooftop solar, and probably the most comparable country would - well, not country - but the most comparable would be California.

Neil Martin  06:00

Right.

Anna Bruce  06:00

And California has about 20% houses with rooftop solar.

Neil Martin  06:05

And is that just because both Australia and California are quite sunny? Is it that basic?

Anna Bruce  06:10

Yeah. So there's a range of reasons why Australia has seen that really high uptake, but it really goes back to around 2000. Australia had subsidies for uptake of small solar systems suitable for houses, but at that time solar was really quite expensive, so the rates of uptake were pretty modest. But then, in around 2007, those subsidies became really quite generous, and, you know, politicians had realized that that solar was really popular with households. And so not only did we have quite a generous rebate from the federal government, but also state governments introduced feed-in tariff programmes with, in some cases, extremely generous feed-in tariffs.

Neil Martin  07:01

And by feed-in tariffs, my understanding - correct me if I'm wrong - is that if you generate electricity from those solar panels, you can effectively sell it back to the grid.

Anna Bruce  07:11

Yeah, that's right. So actually, current feed-in tariffs are based on how much you export to the grid. You're you're paid for the exports, but actually, many of those feed-in tariffs paid for all of the energy that was produced by the solar systems in those days. So, yeah, that was very generous, and as a consequence, we had really high rates of uptake of rooftop solar, and then quite quickly governments withdrew that support. So it was, you know, a year or 18 months or something where we had a big boom. But, you know, nevertheless, even after a lot of that really generous support was withdrawn, solar is still a really attractive prospect in Australia. We do have really great - a really great solar resource. We do have a lot of freestanding homes, many owner-occupied, and and also relatively high electricity tariffs. So solar is quite attractive for all of those reasons.

Neil Martin  08:16

People are maybe looking at the bottom line and realizing if I get solar on my roof, I can reduce my bills.

Anna Bruce  08:22

Yeah, that's right, and I can reduce my bills, and I can also protect myself from future changes in electricity prices. So, actually, solar has historically been really popular amongst retirees and and people who may have money to invest now, but they're really keen to avoid or hedge against future electricity price rises.

Neil Martin  08:47

And when we talk about that big uptake in solar, the driving force behind that was people thinking I can sell electricity back into the grid. You then get this change. It's not just a one-way system. There's power flowing backwards and forwards. How does that change things? What challenges are there that that brings?

Anna Bruce  09:08

Yeah. So when we start to get a large fraction of households with PV in a particular part of the grid, that then creates challenges for the network operator because the additional electricity that's being injected into those grid feeders actually pushes up the voltages in those areas, and the the network operator has to maintain those voltages within their mandated levels, and so that then creates challenges for the network operator, but we now actually have a situation where we have entire big chunks of the grid that are actually exporting because there's so much rooftop solar. So, for example, in South Australia, there are times when rooftop PV is generating more than all of the local electricity demand in South Australia. Wow! Yeah, and so then that creates sort of challenges at the system level because we do need to maintain stability of the frequency, as as we discussed before, and traditionally that has been done by having big rotating machines operating on the grid, which actually provide inertia that stabilises the frequency. But when we have so much rooftop solar, then those generators get pushed out of the grid, and then they're not there to provide that service. So so far in South Australia, because South Australia can actually export to other states, you know, that's been able to be achieved, keeping some of those what we call synchronous generators on the grid. And when I say synchronous generators, I mean those large rotating generators like coal and gas generators that we've traditionally had on the grid. So the system operator is is now looking at how we can get those PV systems off the grid during those times, in order to to maintain system stability, and also looking at other alternatives for how we can provide that inertia, for example, using battery energy storage systems or other technologies.

Neil Martin  11:30

And when you talk about those battery systems, is that with regards to those households storing that energy for themselves, or is it on a bigger level?

Anna Bruce  11:40

Yeah. So I guess I'm referring to utility-scale batteries there. So ARENA, the Australian Renewable Energy Agency, has been funding trials, and we now have utility-scale batteries that are able to provide some of those system stability services.

Neil Martin  11:59

But it definitely sounds, and this might be a surprise to some people, that you can't just put millions and millions and millions of solar panels on roofs, and it doesn't create a problem. You actually can have too much generation going on.

Anna Bruce  12:12

Yeah, that's right. And there are new provisions that AEMO, the Australian Energy Market Operator, has brought in, which allow them to push rooftop solar off the grid during emergency situations. So when we have those times of very low minimum demand, minimum system load.

Neil Martin  12:35

Going back to batteries, if you have your solar panels on your roof, what then happens if you have your own battery? Does that affect how you interact with the grid?

Anna Bruce  12:47

Yeah, yeah, certainly. So, if a household with a solar system installs a battery, then instead of exporting their excess solar energy to the grid, they can actually store that in the battery, and then use that when the sun goes down. So that allows them to even further increase their self-consumption of solar, and reduce their reliance on the grid. And that includes, you know, increasing their resilience if there was a blackout because many of these batteries can continue to operate and supply the household loads even if the grid goes down.

Neil Martin  13:27

And I guess a lot of households are looking at the bottom line. They're analysing how much does this system cost, whether it's a solar panel, a solar panel and a battery. How much that cost me up front? How much I'm saving in in electricity. Do you think that's what's their driving force in terms of making that decision, running those numbers, and coming to a conclusion about whether it is economically worthwhile?

Anna Bruce  13:52

Yeah, certainly. I think that is the main driver for people to install solar, and there are significant savings when people install PV systems of the type of size that we typically see. The savings would be, you know, between 30 and 60% of bill reduction. But that does depend on the size of the solar system, how much electricity is used in the home, and the nature of the tariff as well, and then if households install a battery, then they can potentially reduce their bill to zero. But it is tricky to work out what is the right size solar and battery for a particular household because it does depend on how that solar generation profile interacts with that load profile and that tariff, and we do have tariffs that are time-varying as well. So yeah, can be quite complicated, and the operation of the battery can be optimised to minimise the bill, depending on when electricity is more expensive or less expensive, but one of the things that we do in our group is we have produced a tool to help households make decisions about investing in solar and batteries. It's called Sunspot, and that tool can provide estimates of bill savings that are really specific to a particular household by using their real consumption data that we can obtain from the Consumer Data Right, which is a database which has all smart meter data, and so yeah, we can then calculate their savings for different size solar systems, batteries under different tariffs.

Neil Martin  15:46

Certainly sounds very useful. I'm sure it's been very well received already. Yes. When you talk about bills, there always seems to be in the news. You know, cost of living pressures are ongoing all the time. I think we still hear stories about their energy is still very expensive. People might wonder, well, there's all these solar panels on people's roofs and bigger solar arrays, kind of generating electricity. Why is energy still kind of quite expensive?

Anna Bruce  16:14

Yeah. So I mean, households that have solar and batteries, you know, are definitely reducing their bills, but yeah, electricity prices have not necessarily been going down. So I guess we need to understand that half of the electricity bill is actually, or you know, around 45% is actually paying for the cost of the network infrastructure, and yeah, about 40 45% is related to the cost of buying electricity on the wholesale market, and then that's there are some other costs as well. But renewable energy does put strong downward pressure on electricity prices because renewable energy generators can operate at near zero cost, so they do bid into the electricity market at zero or or even negative prices, and and that definitely makes electricity a lot cheaper at that those times when there's a lot of renewable energy. But what we are seeing in the wholesale market is additional volatility because at the times when there's not renewable energy, we need flexible capacity, flexible generators like gas generators to come on, and they're the most expensive generators. So we now have times when electricity is very cheap, and and actually significant periods where electricity prices are negative now, but also times when electricity prices are quite high. And then the other part of that dynamic is that we, over the past five or 10 years, we have been seeing coal plants exiting the market, and this is what we want to see as we're transitioning to a high renewable energy system. But the coal plants are exiting for a number of reasons. One is that they're less profitable because they don't have the flexibility of gas, so they can't necessarily capture those high prices, and at other times, you know, electricity prices may be quite low. But also, many of these coal plants are quite old, and they're reaching their end of life, and their reliability is declining. So anyway, what the outcome of those coal plant exit actually means that there's a rebalancing of demand and supply in the market, so we do tend to get higher prices after we see the exit of a very large generator, and yeah. And then we've also had some other events like the Ukraine war, which created a a very sharp increase in the global price of gas, which then flowed through into our electricity market, since gas generators are the ones that are often setting or almost always setting those high prices. But I guess on that side, on the wholesale electricity prices, we are now seeing a decrease in the last quarter, and that is due to we now have significant amount of utility battery capacity coming into the national electricity market. So we now have, yeah, 45% of our electricity is coming from renewable energy in the grid, and now we're really starting to see a lot of battery capacity replacing those expensive gas peakers and actually reducing prices.

Neil Martin  19:48

Because you can store that energy that's been created at very low cost, and it's not going to waste. Is that right?

Anna Bruce  19:54

Yeah, that's right. So the batteries are charging up with the cheaper or negatively priced renewable electricity, and then they're able to compete with the the gas generators, and and overall prices are are now coming down in the wholesale market.

Neil Martin  20:10

And you said there's downward pressure. This episode's called engineering the future. I guess putting those two things together, kind of how quickly will that downward pressure keep going? Would you predict that that trend is definitely going to happen? I guess people hope that you know their bills are going to go down over a period of time if all these things keep being able to be developed and increased.

Anna Bruce  20:35

Well, I mean, I guess the other part of the equation is the network costs, which is also a significant part of the bill, and that is quite a focus at the moment for the electricity industry. And as we're transitioning to renewable energy, we do need to have significant investment in transmission because those generators are not necessarily in the same locations as the coal generators were historically, so transmission costs are higher than they might than might have been expected, and that's putting prices up. But also in the distribution network, in the part of the grid that's closer to where electricity consumers are, we're also seeing additional costs associated with consumers transitioning to electricity and away from gas, so increasing their overall electricity consumption, but also you know costs associated with managing consumer energy resources like the voltage issue that I mentioned earlier, and now most recently, the big challenge that the industry is facing is the emergence of data centres, which are huge new loads that are coming into the grid. And there's a lot of concern about the costs associated with data centres and their impact on both wholesale electricity prices and network costs. So yeah, it's hard to say. I think we still have quite a road ahead of us in terms of the transition that we're on, and there are costs associated with change and transition. So it might be quite some time before we settle into that lower cost renewable electricity future.

Neil Martin  22:26

I can tell you're being very careful there not to get people's hopes too high, and I understand that completely.

Anna Bruce  22:32

But households can save money, you know, and households and businesses can save money right now by investing in in solar and batteries and and other technologies to reduce their own bills.

Neil Martin  22:45

One of the other things I've heard doing some research is virtual power plants. I must admit, I don't really know what a virtual power plant is. Maybe the people listening wouldn't either. Can you explain what they are, how they work, and what are the benefits of them?

Anna Bruce  23:02

Yes, so a virtual power plant is a aggregation of individual household consumer energy resources, typically batteries, and so they can be coordinated their operation so that they act in aggregate like a utility-scale generator or utility battery to provide the same kind of value to the grid and participate potentially in electricity markets. So I guess there are different types of VPPs, and so one is a virtual power plant that participates directly in the electricity market. But what we've seen to date is that's not the most common approach, and those types of market participating VPPs are mostly just participating in frequency management markets, for example, rather than the the main wholesale electricity market. But what we're seeing a lot more of is VPPs that are owned by big electricity companies, retailers, and operated to really hedge their exposure to high prices in the electricity market, and minimise the cost for those retailers of buying electricity on the wholesale market on behalf of their customers. So overall, then they can pass on those savings to their customers, and in particular to the customers that are part of the VPP, and so that typically by upfront discounts on batteries when if people buy a battery and join the VPP at the same time, or it could be monthly payments for participating in the VPP, or payments per event each time that battery is used by that VPP.

Neil Martin  25:02

So these VPPs are being run by companies. It's not like I've got my own solar, I've got my own battery, I have to go down the road and knock on people's doors and say, "Do you want to be part of my local VPP?" It's all kind of organised. You join and then you get the benefits of that, of that program.

Anna Bruce  25:19

Yes, that's right. And actually, there's a third type of VPP as well, which has been very popular as well. So there's a particular company called Amber that allows customers to have exposure to the wholesale electricity price instead of having a tariff with a defined price at different times of the day, they're actually seeing the five-minute time-varying wholesale electricity price. What Amber is doing then is operating the customer's battery in order to minimise their bill individually. So it's a different kind of VPP.

Neil Martin  25:58

When we talk about these companies kind of remotely being able to control your system, your battery. Is there a problem there? Do you feel people are kind of happy for that to happen?

Anna Bruce  26:11

Yes, people do have concerns, and certainly the uptake of VPP offers has been lower than expected, and then hence some of the potential value of those batteries and VPPs is being lost, and the reason for that is, you know, fundamentally trust in the electricity industry is quite low. People don't trust electricity utilities, and there's a strong desire for independence, therefore, from electricity companies, and this is one of the reasons why people like to invest in solar and batteries. But also, there's a lack of transparency about the nature of the VPPs, and in particular, how much value they're generating, or how much money the VPP operator is making, and how they're distributing those benefits to people in the VPP. So that's one reason why the Amber offer has actually been quite popular because it's quite clear and transparent how the VPP participants are benefiting and what the value is overall of that VPP, but I mean, I guess the final concern that people have about having their devices being controlled is around reliability. So one of the other drivers for people investing in a battery is to to have higher reliability, particularly, you know, in the case of a blackout. Those batteries can continue to supply the loads in the home, and people are concerned that if they join a VPP, that then they may not have energy in their battery for those times when they need it.

Neil Martin  27:57

You talk about people wanting to take a bit of control to have their own solar power generation, their own battery, if if anything goes wrong, but not everybody can do that, right? I guess if you rent, you might not be just allowed to put a solar panel on your landlord's roof. If you live in an apartment, you might not have a roof. Does that create a kind of a divide in society, and is there anything that's happening that's helping to help those who can't at the moment take advantage of these good potentials?

Anna Bruce  28:30

Yes, this is a big concern, and policymakers and energy consumer advocates are very concerned about this equity that's emerging because renters and apartment residents find it difficult to access the benefits of consumer energy resources. So we still need the network for those customers that have solar and batteries because they're not completely disconnected from the grid, but they can potentially reduce their bills to zero or near zero, and so the implication then is that other customers then need to pay more to cover the cost of providing the grid.

Neil Martin  29:13

It's a bit of a double whammy then. So not only can I not get a solar panel because I live in an apartment, but I'm also, I guess, effectively subsidising the people who do, I'm ending up paying more because the other people are paying zero.

Anna Bruce  29:27

Yeah, so that's a that's a big concern, and there is a focus on network tariff design for that reason. But it is really important to recognise the contribution of those households that do have consumer energy resources and the value that they're providing. So that solar and batteries is obviously reducing emissions on behalf of all Australians, but also reducing electricity prices as those batteries provide that additional flexibility and reduce those challenges associated with managing voltage, and provide that flexibility to reduce electricity prices as well, so that that is acting to overall reduce the cost of energy transition for everyone. So it is there is a balance. We do need to actually incentivise households and businesses to invest in or continue to invest in consumer energy resources, and also we need to provide the right price incentives in those tariffs for them to operate them in a way that does benefit the grid. But yes, we do need to address these equity issues, and I guess tariff design is one thing that we can do, but we do also need to focus on how we can overcome the barriers in rentals and apartments, so that there are opportunities to get as much solar and batteries and and other electric vehicle charging and things like that into apartments.

Neil Martin  30:59

I've just come back from Europe, and in the UK, I think especially, I saw adverts for plug-in solar panels, which I'm not sure I'd really heard of before. Are they a good thing for people in in apartments, and are they possible in Australia? I don't think I've seen them in Australia.

Anna Bruce  31:16

Yeah, they're actually not possible in Australia at the moment. You can't legally buy or use plug-in solar here in Australia at the moment. There is certainly a lot of interest in plug-in solar and the potential for plug-in solar to allow apartment owners and also renters to easily get some of the benefits of solar. There's also plug-in batteries that are on the market. At the moment, they're not legal for safety reasons, but we're involved in a consortium that's trying to get a research project up to really understand the nature of those risks and and the opportunity for plug-in solar and batteries here in Australia.

Neil Martin  32:02

I guess that would potentially help balance that kind of divide. Is there anything else that can, either policies or other solutions that you're aware of now or in the future, that make that energy transition kind of fairer for everyone? I guess not just the people who own their own home and can install a big solar panel on their roof.

Anna Bruce  32:23

Yes, I think planning and sort of future-proofing apartments for consumer energy resources so that they're designed to accommodate solar batteries, EV charging in the first place,

Neil Martin  32:37

And that would have to come from the government, right? In terms of regulation.

Anna Bruce  32:42

I think yeah, mandating in the building code and and performance standards would be a good way to go. Also, mandating disclosure of building performance to renters or buyers of apartments as well can put more pressure on developers to pay attention to those aspects, and then also there are some models which can allow sharing of solar in apartments, which can maximise the benefits for solar and batteries in apartments, and and actually give them some additional benefits by aggregating up.

Neil Martin  33:24

When we take all of that into consideration, everything that we've mentioned so far, and if I can try to get you to project 20 or 30 years in the future, which I know is always hard, how do you think the way we use energy in our homes might change? What would it look like in 20 or 30 years?

Anna Bruce  33:46

So, gas will no longer exist. We will be fully electric, and pretty much roofs will be covered in solar. Perhaps standard roofing materials might actually be solar generators in the future. Yeah, I think those key devices that we already discussed-PV, batteries, electric vehicle charging, hot water-likely to be controlled and optimised in terms of their operation. I'm not sure that households will really want to have other loads being controlled. I think that's an area that's not clear what the appetite for handing over control will be. And yes, if to the extent that there is control of devices in the home, people are going to want to be able to override any control for their lifestyle needs. For example, if they're having a party, or for illness, or holidays, or things like that. So, yeah, I think that's a bit of an open question: the extent to which households might be open in the future to... But there are some good opportunities in, I think, batteries and EV charging in particular, which we can take advantage of.

Neil Martin  35:09

Do you think a typical home energy system of the future - is it going to be much more high-tech? Is it going to be much more kind of, like, interactive? You know, is there going to be AI involved? What what does the typical home energy system for the future look like?

Anna Bruce  35:26

So, I think there will be optimisation of those devices which don't really impact on people's lifestyles. So, some electricity loads can be moved around without having any impact on consumers, and that includes things like hot water heating. It doesn't matter when your hot water is heated and stored in a tank; you can still have your hot shower at the time when you want to have it. And similarly with electric vehicle charging, that can be done at any time overnight. So I think those things can be controlled and optimised, and will be. But apart from that, I don't think people are going to want to have automation that interferes with them living their life in the way that they want to. And I think, you know, more broadly, there's a bit of a backlash towards digitisation and AI, and yeah, I wouldn't be surprised if people swing back to wanting to have a simpler life and have more manual control over their appliances and and things like that. But that remains to be seen.

Neil Martin  36:38

It's really interesting to hear predictions, and I guess you know maybe we'll make a date to check back in with you in 20 or 30 years' time, and re-listen to this episode and listen back and think of how correct or incorrect maybe you've been. Associate Professor Anna Bruce, it's been great to chat with you, hear your thoughts and your predictions, and for you to share your knowledge and insights. Thank you very much.

Anna Bruce  37:01

Yeah, thanks so much for having me, Neil. It was fun.

Neil Martin  37:04

It's been a pleasure. Unfortunately, that's all we've got time for right now. Thank you for listening. I've been Neil Martin, and I hope you'll join me again soon for the next episode of our Engineering the Future series.

You've been listening to 91É«ÇéƬ's Engineering the Future podcast, highlighting the people and ideas, creating real-world impact, and enabling progress for all. Don't forget to subscribe to stay updated on upcoming episodes. Check out our show notes for details on in-person events, panel discussions, and more fascinating insights into the future of engineering.