The amount of change we’re currently seeing in the energy industry has had significant implications for Western Power, Western Australia’s state- owned electricity provider. New technologies – including renewable energy sources and battery storage – are naturally having an impact on the way Western Power approaches is day-to-day operations.
For Western Power, a traditional energy network operator with both transmission and distribution functions, and with high solar PV penetration on one side and substantial renewables projects on the other, the broader shift in the traditional energy chain of generation, distribution and retail is being keenly felt.
“We are currently experiencing a greying of the lines between generation and distribution, and distribution and retail,” noted Mr Chalkley.
“The advent of battery storage on one side, as well as smart meters and big data on the other, is also providing a challenging environment for distributors. Add to this grid defection from solar PVs and large-scale renewables, and you have a real melting pot.”
For Mr Chalkley, it’s been important that Western Power recognises this evolution as an opportunity, rather than a threat.
“The challenges we’re facing can be overcome with changes to current legislation and regulation, which haven’t kept pace with industry changes,” said Mr Chalkley.
“We are also in a strong position as a trusted provider to test and pilot the new technologies that have emerged. This will counter the revenue decline as solar PV continues to grow.”
Mr Chalkley believes that the disruption being seen in the industry, in the form of new technologies, will significantly challenge the business to consider the best investments when it comes to new asset planning.
“I believe that the disruption has added another step, very early in the planning stage, that challenges whether the traditional form of investment will be the best solution.
“Our traditional network assets and solutions have long lifecycles and long payback periods – but new, emerging technologies could make these assets obsolete over a short period of time.
“We do not have all the answers yet, but we remain committed to safety and reliability, whilst we wait for a fuller view of impact of disruption or alternative investment solutions.”
Getting the renewable connection right
For Western Power to sufficiently take advantage of the opportunities renewables provide – rather than be threatened by them – Mr Chalkley firmly believes the utility needs to take the right approach to integrating renewables into their network.
“Renewables need to be connected in the right places and with the right level of investment in the network to enable their efficient use,” said Mr Chalkley.
“The current network wasn’t designed for renewables, or the two-way flow of electricity for that matter. We do need a good forward picture and plan of what and where future renewables are likely to be located, so we can prepare the network for the changes that will take place.
“This needs to be done at a high level so that we are not simply adding piecemeal, point solutions. A longer term view has to be taken that secures the network for future generations utilising a mixture of renewables and traditional generation.”
One of the key points to consider is the fact that there is a wide variety of emerging technologies out there, that can be considered for implementation into the network.
As Mr Chalkley said, there is no one “silver bullet” solution to meet the brief of providing energy that is reliable, affordable and clean.
“All of the new solutions provide customers with alternative options that can be better than existing options,” noted Mr Chalkley. “And ultimately, this can only be good for the customer. From a network position, the customer’s particular set of circumstances has to be considered to deliver the most efficient solution possible, to meet their needs for safe and reliable energy.”
To that end, Western Power is moving forward with a number of projects that incorporate innovative technologies that answer customer needs.
“We are piloting a large-scale microgrid in an edge of grid eco-tourist town, a battery storage system in a remote town that suffers above average outages, and a stand-alone power system in a farming community with below average reliability,” said Mr Chalkley.
“Along with these physical projects, demand management tools are helping shape customer behaviours, which is proving to be a smarter investment than the traditional sub-station build in urbanised areas.
“These are four of many options that we will be continue to pursue in the future. As an organisation, we need to work now to be more prepared for higher levels of PV and batteries on customer premises, as well as technologies such as ‘peer to peer’ trading.
“Western Australia has very good sun, wind and wave resources, with global technological partners queuing up to partner and test their projects in an environment that can provide an available site. The fact that land is available and the population is sparse has become an advantage.
“Add to this people who have always got things done and delivered often in adversity, and you have an excellent mix for the future.”
The focus on integrating solutions into the network that offer the best benefits to customers is a sentiment echoed in other areas of the business, particularly when it comes to affordability.
The transformation program that Western Power embarked on at the beginning of Mr Chalkley’s tenure is already delivering significant savings in terms of customer bills, and importantly, safety and reliability has not diminished.
“We also want to improve the process for access and with new technologies, better communication and by taking the time to listen, we believe will continue to improve.
“One of the things that you realise quickly as a monopoly is that we have responsibilities. We are embedded in the community, our employees are also customers and we all reside in the community. Fundamentally the customer has little choice but to use us in some form.
“It is important that we treat people with respect and act with integrity, this involves actively listening to and engaging with our customers and the community to identify and implement innovative solutions that take their input into consideration.
“We aim to engage with the community early and proactively to address social impacts. We engage across a broad platform of stakeholders and community members, from people who are potentially impacted by new or existing infrastructure – through to our regionally based community investment program that aims to make a meaningful contribution to our communities.”