The reliability of distributed solar in critical peak demand: A capital value assessment

Kerry Burke

A Working paper. Submitted to Renewable Energy.

Constructive comments and questions are welcome.


Generation is most valuable when demand is highest. As electricity can’t yet be cheaply stored, generation and transmission infrastructure must be built to meet the highest expected demand, plus a margin of error. Reliably producing power at times of critical demand not only offsets the need to use expensive liquid fuels such as diesel or condensate, but also removes the need to build backup power stations and transmission infrastructure that would only be used for a small fraction of the year. Under the most extreme demand conditions, solar has reduced the peak demand seen by retailers and wholesale energy markets. This study compares the capital cost of critical peak availability from gas turbines to the capital cost of critical peak availability from distributed solar in the Australian National Electricity Market. When compared on this basis…

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The Adjustment. “The soju death Spiral”

Ashton Szuster on “The Soju Death Spiral” – akin to Australia’s “Electricity Death Spiral” and the significant electricity demand reductions yet to come through efficient electric –


So in a small cafe here I sit, surrounded by dogs. I come here often, contemplating life and it’s meaning. The peculiar combination of both angst and excitement which arises with new surroundings has subsided and now I’m at ease. Settled into my new role as an English teacher, a comfortable apartment and a steady paycheck- I now have the capacity to seek inward and analyse some of the deeper questions of life…The search for the good life. Of course, I’m very much aware of the paradox of ‘searching’…as Henry David Thoreau so elegantly put, ‘happiness is like a butterfly, the more you chase it, the more it eludes you. But if you turn your attention to other things, it will come and sit softly on your shoulder’ A wise and prudential maxim. One worth remembering.

The kind of life I’m trying to establish for myself, the kind of person…

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Need debt and deficit reduction? All-electric homes lead the way

The Alternative Technology Association (ATA) recently released their report on switching from gas to efficient electric appliances – concluding the switch is good for producing less greenhouse gas emissions. They alsoconcluded it made good economic rationale for the household to fuel-switch. Yet the recently completed NSW State and Regional Development Committee inquiry into the “Downstream Gas Supply and Availability in NSW” suggests we are mugs for halting gas distribution growth, claiming the benefits of connecting regional NSW to gas have:

“Economic benefits: gas is a cheaper alternative to coal based electricity for residential, commercial and industrial purposes, and with the potential to attract industry and businesses to regional areas; and

Environmental benefits: gas is a cleaner, more greenhouse efficient fuel.

Source: pg. 11, NSW State and Regional Committee (2014)

In the Victorian jurisdiction, you would be forgiven for reaching the same conclusion. A tax payer funded $85 million gas extension program named “Energy for the Regions” will extend the gas network, the cost of each gas connection is estimated as high as $45,333. Furthermore, if you want to install a solar hot water and would like to connect a highly efficient electric hot water heat pump – bad luck – if a reticulated gas supply is available:

“…then the SWH must be gas boosted, you cannot install an electric boosted unit.”

Source: Victorian Building Authority, p. 2, Technical Solution Sheet 6.13

Understandably after talking to many of our clients, they are confused by these mixed messages. And since we could not find research to substantiate the basis of these jurisdictional claims/outcomes, we decided to conduct our own investigation. We decided to examine the energy running costs of the household’s highest energy demand sources – heating and hot water – across every Australian jurisdiction.

We examined the three most common fuel sources available to homeowners – electricity (solar), electricity (grid) and gas (grid).

Prior to considering the efficiency of the appliances, i.e. the Coefficient of Performance (COP) = 1.0, consider a standard bar radiator heater (heating) and an electric resistance hot water system (hot water) and gas fuel is burned with 100% efficiency (which is not possible). We determine the running costs using these three different fuels before considering efficiency.

150209 No efficiency considerations

Source: Jurisdictional standing electricity and gas residential retail tariffs 2015; rooftop solar at $1/W fully installed; Clean Energy Council (2012) GC Design Guidelines; TrueDemand analysis

It’s clear that grid electricity is the most expensive, followed by gas and the cheapest being solar derived electricity.

Now, let’s recognise the significant advances in readily available off the shelf electrical appliance technology with COP 5+ (i.e. for every bar of heat, you get 4 additional bars free sourced through renewable ambient heat) heating air conditioners (reverse cycle splits) and heat pump hot water systems COP 4.5+. Firstly, let’s take a look at the energy costs to heat your home.

150209 Heating efficiency

Source: As above; COP 5.81 (Daikin Sarara Ururu 7); Gas ducted heating COP 0.6; TrueDemand analysis

And for the hot water heating cost:

150209 Hot water eff

Source: As above; COP 4.5 (Sanden CO2 heat pump); Gas hot water COP 0.7; TrueDemand analysis

In both cases, gas is by far the most expensive fuel source to heat your home or hot water. Even in the jurisdiction where gas is ‘dirt’ cheap, Victoria, still does not compete.

So the next time you’re contemplating a house retrofit, a replacement or just want to start reducing your energy costs, bear these charts in mind.