Rooftop Solar PVs Dodge the COVID-19 Impact as New Installations Set Records

  • Mar 16, 2020
  • Team Kalkine
Rooftop Solar PVs Dodge the COVID-19 Impact as New Installations Set Records

The rooftop solar market in Australia is showing no sign of a slowdown, despite bloodbath instigated by the COVID-19 outbreak on the global scale. The latest data released by SunWiz-Australian solar industry data provider, suggests that while the registration of large-scale generation certificates is facing some challenges, the registration of small-scale solar system, which provides renewable energy from 0 to 100 kilowatt for various purpose such as to power the telecommunication towers,  is surging for a while now.

The solar rooftop PV cells account for a vast majority of small-scale generation certificate, as it provides an incentive to households with extra energy and low demand to transmit the redundant energy into the grid.

As per SunWiz, the growth in the number of installations across small-scale rooftop PV cells has shattered all records in February 2020 while reaching the registered capacity of 218 megawatts, reflecting the highest monthly reading so far.

On a state-by-state basis, for February 2020, Queensland tops the chart in adding solar rooftop energy into the grid of 53 megawatts, followed by Victoria, which registered 48 megawatts, South Australia and Western Australia registered 24 megawatts and 26.5 megawatts, respectively. The recent registration of 53 megawatts in Victoria is about 34 per cent higher against the previous corresponding period.

As per the Australian Energy Market Operator (or AMEO) the rooftop solar capacity can reach one-quarter of Australia’s energy generation by stretching to double to three-fold in 20 years, i.e., by 2040.

 

  • The Future of the Australia Energy System

As per AEMO, NEM or the national electricity market would transform from more of a centralised coal-fired generation system to a highly diverse portfolio of energy generation.

Also Read: Australian Government Policies and Programs To Attain A Net-Zero Carbon Emission

The energy portfolio, as assessed by AEMO would be diversified, and contain a large portion from Distributed Energy Resources (or DER) and Variable Renewable Energy (VRE) as both contains substantial dispatchable resources, ensuring the reliability of the power system to meet the domestic demand, which is consistently increasing across the continent.

The energy operator also stated that the small-scale distributed energy resources, which includes rooftop solar panels, could increase to two-fold by 2040 across the residential, industrial, and commercial consumers amid higher demand and favourable government policies.

As per AEMO, the Distributed Energy Resource could increase from the present level of 13 per cent to 22 per cent of the overall underlying annual national electricity market energy consumption by 2040.

About 63 per cent or 15 gigawatts of the coal-fired generation in Australia is estimated to vanish from the energy generation portfolio of the continent by 2040, while 30 gigawatts of new grid-scale renewable would be required on the consumption basis.

 

 

As the retirement of coal-fired plants would require additional alternative sources, it holds the potential to provide cushion towards higher integration of DERs and VREs. As per the assessment of the energy market operator, NEM would require an addition 34 gigawatts of variable renewable energy, 30 gigawatts for High-distributed energy resources. Also, the VREs would require flexible and new dispatchable resources of 5 to 21 gigawatts, battery storage, and the demand response.

 

  • DER or Solar Rooftop Panels Growth Estimates

As stated above, the DER is estimated by the energy market operator to surge from 13 to represent 22 per cent of total underlying annual NEM energy consumption; however, an efficient integration is needed for the effective and secure operations of the DER investments.

The grid demand is projected by AEMO to remain more or less constant till 2040 despite the growth in population and economic figures.

Economic Figures, Do Read: Low GDP Growth, Coronavirus Pandemic – Push AUD to Decade Lows; What’s Next?

 

 

However, due to the anticipation of a constant grid demand, the energy market operator recommends that the nation should further add 30 to 47 gigawatts of large-scale VRE, which is most optimally to be placed in Renewable Energy Zones (REZs); and,

  • Presently, there are 6 gigawatts of VRE installed across Australia, and AEMO anticipates additional installation of 6.5 gigawatts in next two years, and projects the requirement of about 34 gigawatts of VREs by the end of 2040 in addition to the existing capacity, under the Central Scenario.

 

Under VREs, AEMO assesses that solar would account for 56 per cent while wind energy would account for 44 per cent.

Coal-fired Power Generation to Decline Gradually

The coal-fired power is estimated by the market and AEMO to taper, and post the retirement in 2040, the energy generation from coal-fired power stations is estimated by AEMO to fall substantially to as low as ~ 9 gigawatts by 2042; and,

  • The Fast and Step Scenarios utilised by AEMO in assessing the change in coal-power contribution into the energy system indicate early retirement of coal-fired power generation as the renewable generation and carbon emissions reduction take precedence in Australia.

 

 

  • Gas-Powered Generation to Increase

The gas-powered generation holds the potential to generate much-needed energy in order to balance the VREs supply and is estimated by AEMO to take inputs from the relative cost and availability from variable storage technologies. However, on a yearly basis, the gas consumption could vary substantially, depending upon the weather events and prolonged outages in thermal.

It is to be noted that the gas-powered generation negatively correlates with the wind generation. The estimated strong interconnection between NEM regions is the potential risk to the gas-consumption for power generation, whilst beneficial for solar, as it increases reachability for spare energy generated by solar rooftops.

To Know More, Do Read: Morrison Government Delivers on the Election Promise; Backs Two Gas-Powered Generators

The energy market operator further estimates that the gas-powered generation would decline initially due to higher gas prices in the domestic market amid the east coast gas crisis. However, the gas-powered generation would ultimately rise as the coal-powered generation reaches retirement, and domestic players cover the shortfall arising from the decline in gas reserves across the Southern region.

To Know More, Do Read: ASX Oil & Gas Explorer- Senex Buckles Up for East Coast Gas Crisis

In a nutshell, the solar market is seeming to be unimpacted from the COVID-19 outbreak with installation reaching record highs in February 2020 and demand towering further.

The solar rooftop installation is expected by the energy market operator to increase threefold, to meet the demand for energy ahead.

The future of the Australian energy generation is also estimated to hover more around higher generation from the DREs, largely solar and winds, while coal-fired power generation is projected to decline and witness a gradual decline.

Demand Facts and Figures: Australia’s Energy Consumption Gushes; While ACCC Nods in Consent for Liberty’s Acquisition by Viva

However, the projected increase in demand would eventually require additional infrastructure, and presently, NEM is facing connectivity issues across the grid network, which is expected to increase the blackouts.

To Know More, Do Read: Keep Calm as Summer Is Upon Us; Summer Blackout Fears Lift Origin Shares


Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report  Top Dividend Stocks to Consider in 2020

CLICK HERE FOR YOUR FREE REPORT!