FUTURE-PROOFING IN AUSTRALIA’S ELECTRICITY DISTRIBUTION INDUSTRY

FUTURE-PROOFING IN AUSTRALIA’S
ELECTRICITY DISTRIBUTION INDUSTRY
A collaborative roadmap to enhance the flexibility and
resilience of Australia’s electricity distribution systems and the
installations that connect to them as the industry transforms to
a renewable energy future
REQUEST FOR PROPOSAL
Task Title: Revealing the Potential for Mid-Scale Embedded
Generation and Storage to add Value to Networks
Task Code: FPDI TA-2D
20 November 2014
A
Request for Proposal (RFP)
Task Title: Revealing the Potential for Mid-Scale Embedded Generation and Storage to
add Value to Networks
Task Code: FPDI TA-2D
RFP Closing date and time: 5 pm (AEDST) Friday 5th December 2014
Lodgement: via email to tbutler@cleanenergycouncil.org.au and
asexton@cleanenergycouncil.org.au
A confirmation email will be sent on receipt.
Contacts - Project Staff:
Tom Butler (primary contact)
Clean Energy Council (CEC)
Level 15, 222 Exhibition St.
Melbourne, 3000
Ph: 03 9929 4142 / 0431 248 097
Email: tbutler@cleanenergycouncil.org.au
Anna Sexton (project administrator)
Clean Energy Council
Ph: 03 9929 4109
Email: asexton@cleanenergycouncil.org.au
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Project Background: Future Proofing in Australia’s
Distribution Industry
The continued integration of renewable energy into Australian distribution networks
represents one of the largest economic, regulatory and technical challenges that the
industry has faced to date. The extent of this reform brings with it risks and opportunities.
The CEC, in conjunction with its members and other key stakeholders, has scoped a
comprehensive program of work that will begin to address some of these challenges.
With the objective of enhancing the flexibility and resilience of Australia’s electricity
distribution systems and the installations connected to them the CEC-led Future Proofing
in Australia’s Distribution Industry (FPDI) project will analyse existing and emerging issues
while identifying potential future roadblocks to the adaptation of these systems to
consumer expectations.
Ultimately the project seeks to build the foundations to facilitate the effective and efficient
integration of renewable energy systems for Australia’s electricity distribution industry. A
subsequent goal is to ensure that the benefits of the transformation of this key industry
toward a renewable energy future are accessible by the sector’s various stakeholders.
The project’s detailed scope of work includes knowledge gathering, technical, economic
and regulatory analysis, and dissemination of the project outcomes via forums. This
approach is intended to create the environment for a well-rounded stakeholder
engagement that will reinforce project outputs to drive beneficial outcomes from the
project.
Further details of the project, its scope, governance and objectives can be seen here.
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Specification of Services
Task Title: Revealing the Potential for Mid-Scale Embedded
Generation and Storage to add Value to Networks
The CEC requests that the consultant provides a proposal and quotation for the task as
specified below.
This task will be managed by the CEC’s FPDI Project Team. The project Steering
Committee will be involved in directing the task as it progresses and reviewing and
commenting on draft documents through to completion, as per the task deliverables and
timeline.
1. Purpose
The purpose of this task is to provide expert advice to identify improved outcomes for
renewable energy generation and enabling technologies, whilst promoting the most
economic use of distribution network assets.
It will provide the market with more visibility on how to access available opportunities,
including promoting business models that better enable embedded generation and
storage to provide network services. While clarifying the treatment of mid-scale1
embedded generation and storage within the regulatory frameworks and identify
constraints in current regulatory settings.
It will also encourage Distribution Network Service Providers (DNSPs) to consider how
embedded generation and storage solutions could better integrate into normal network
planning, and provide information to support related current or prospective reforms.
2. Background
Over recent years the use of embedded generation to assist distribution networks has
become increasingly important. Significant works by the Australian Energy Market
Commission (AEMC)2, the Institute for Sustainable Futures3 and other relevant
stakeholders have highlighted the potential for demand management and embedded
generation to lead to long term benefits for consumers.
1
Generally this work should consider generators other than those considered household scale. That is
generally rated above 30 kW but remaining distribution network-connected.
2
http://www.aemc.gov.au/Markets-Reviews-Advice/Power-of-Choice-Stage-3-DSP-Review
3
http://cfsites1.uts.edu.au/isf/news-events/newsarchive-detail.cfm?ItemId=31169
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This work continues into 2015 with two separate requests for changes to the National
Electricity Rules to adjust the existing Demand Management and Embedded Generation
Connection Incentive Scheme being considered by the AEMC. Lodged by the Council of
Australian Governments (COAG) Energy Council4 and the Total Environment Centre5
these rule change requests focus on the scheme’s incentive arrangements.
The Institute for Sustainable Futures is also undertaking an ARENA-funded project
looking to map distribution network constraints in order to identify areas where embedded
generation and/or storage can contribute to alleviating network constraints. In addition the
Total Environment Centre is considering the potential for Virtual Net Metering in Australia6.
These works indicate that there are clearly opportunities increasing utilisation of nonnetwork technologies in a network supporting function.
3. Objectives
This task seeks to further analyse and enable the opportunities of third-party mid-scale
embedded generation and storage to provide value to distribution networks, consider how
the regulatory environment could adapt to promote non-network solutions, and provide
critical analysis and information to the industry on these opportunities and solutions.
3.1 Key focus areas
This task will investigate the opportunities for mid-scale embedded generation and
storage to add value to distribution networks.
In this sense, value could come in the form of deferring demand related network
augmentation by reducing peak demand on the network. It could also be derived from
avoiding asset replacement, assisting with reducing maintenance requirements or
reducing losses (for example).
The scope of work covers four main areas.
1. Technical Capability
Consider and document the inherent and potential capacity for renewable embedded
generation and enabling technologies to contribute to network support including
•
Consideration of the generation and equipment reliability of generation and storage
technologies to provide this support (including the use of forecasting techniques for
non-dispatchable generation sources);
•
Management of power flows on the network;
4
http://www.aemc.gov.au/Rule-Changes/Demand-Management-Embedded-Generation-Connection-I
http://www.aemc.gov.au/Rule-Changes/Demand-Management-Incentive-Scheme
6
http://cfsites1.uts.edu.au/find/isf/publications/langhametal2013virtualnetmetering.pdf
5
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•
Management of voltages during high and low generation periods; and
•
The role of storage and management of peak demand.
2. Information
Analyse and document available information on the use (and potential use) of embedded
generation or storage for demand management solutions considering:
•
Projects which have been included and successfully completed by DNSP’s in their
Demand Management Incentive Scheme proposals to the AER;
•
Proposals (where possible) made to DNSPs by third party providers of demandside solutions; and
•
Any other ad-hoc projects which have been considered or implemented by DNSPs.
(Where possible the value of the network support services provided by these projects will
be quantified).
Identify the information which DNSPs require from prospective providers of non-network
solutions in order to better align understanding of these solutions to that of traditional
investment solutions (for example the information expectations for participation in the
Regulatory Investment Test for Distribution).
3. Commercial Arrangements
Analyse and critique related commercial matters including:
•
The current and future scope for an aggregation market;
•
Arbitrage opportunities (for example, whether incentives for meeting peak demand
on the network are competitive with other incentives);
•
Avoided Transmission Use of System charges;
•
Incentives offered by Network Control Ancillary Services contracts and the related
commercial implications; and
•
Suitability of current arrangements considering their increasing use given
increased adoption of network support contracts.
4. Regulatory Settings
•
Clarify the treatment of non-network solutions within current regulatory settings
and examine whether there are constraints to increased adoption of embedded
generation and storage in a network support role;
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•
Identify concerns of DNSPs if/where they exist and ways to address these
concerns;
•
Consider the impact of incentives on DNSPs for reliability and whether there is a
misalignment between them and the opportunities offered to non-network solution
providers; and
•
Consider rule changes and market reforms proposed by Total Environment Centre
and the COAG Energy Council and provide recommendations on how the findings
could inform these proposed changes.
3.2 Approach
The consultant is expected to address the task’s objectives and focus areas with the
following approach.
General inclusions:
•
The task will require a national approach, considering differing state and territory
market characteristics and policy settings.
Engagement:
•
The work will be conducted through consultation with DNSPs and providers of
embedded generation and storage solutions through a brief survey and a
workshop (venue and stakeholders facilitated by the CEC).
Policy and regulatory matters to be considered:
•
Consideration of the investment environment for networks, including the types of
investment that may be deferred with non-network solutions.
•
The current regulatory and policy settings surrounding the use of non-network
solutions by DNSPs.
Recommendations coming from the work should consider (but not be limited to):
•
The suitability of current regulatory and commercial arrangements under
increasing use of non-network solutions to network investment.
•
Possible solutions to improve engagement between DNSPs and non-network
providers.
•
Identification of any policy, regulatory and/or economic barriers to efficiently
utilising non-network solutions, including recommendations on how these barriers
may be overcome.
•
Any other recommendations the consultant identifies as necessary to address the
task’s objectives may also be proposed.
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Where appropriate the consultant may draw on other work or studies to provide
supporting evidence for recommendations.
4. Deliverables
The consultant will be required to liaise with the CEC throughout the process and deliver
the following in accordance with the Timeline:
1. Provide a service delivery plan including any information requests to the CEC or
Steering Committee members. The plan will be provided within two weeks of
contract signing and may be updated as necessary during the engagement.
2. Provide progress summary reports to the CEC on a monthly basis. These reports
should be brief and include a summary of progress including key achievements,
the status of deliverables and progress against the Timeline.
3. A comprehensive Draft Report for review and comment by the Steering
Committee. The Draft Report shall address the task’s objectives, key focus areas
and approach. It shall be to a suitable standard of presentation and content and
include:
•
Foreword;
•
Executive summary, including draft recommendations;
•
Summary of the approach;
•
Draft reporting on the assessment of Technical Capability, Information,
Commercial Arrangements and Regulatory Settings;
•
Draft recommendations coming from the work in accordance with the Task’s
Objectives.
•
Draft concluding remarks, including any recommendations for further work,
and;
•
Acknowledgement of any contributing parties (e.g. contributions of data or
other materials).
4. A Final Report which addresses the Steering Committee’s feedback on the Draft
Report and includes the consultant’s final recommendations and remarks.
The consultant will also be required to attend meetings with the Steering Committee, in
accordance with the Timeline:
1. An interim update meeting to present on the Task’s progress and receive feedback
from the committee.
2. A Draft Report teleconference to receive feedback on the Draft Report.
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5. A teleconference to discuss the Final Report.
5. Dissemination
The final report will be in Word Document format. The CEC will be responsible for further
design of the report and publication, in line with CEC branding policies. The consultant’s
contribution to the work will be acknowledged and the consultant will also have the
opportunity to include foreword comments.
The CEC will produce “fact sheets” and other communication tools based on the work and
its recommendations. Two (2) workshops will be held to discuss and promote the work’s
findings. The CEC will also disseminate the outputs of this work by meeting with DNSPs,
regulators and government in due course.
6. Timeline
The project is expected to commence in January 2015.
Milestone
Completion Date
Details
RFP period
5 December
RFP closing date
Proposal approval
8 December
RFP contract in place
Service Delivery Plan
22 December
Provide plan to CEC
Interim Update Meeting
April 2015
Interim update meeting with CEC and
Steering Committee
Draft report
April 2015
Draft report for comment
Teleconference
May 2015
Teleconference with Steering Committee
to discuss Draft Report
Final Report
June 2015
Final report
Teleconference
June 2015
Teleconference with Steering Committee
to discuss Final Report
Design & publication
July 2015
CEC finalisation and publication
Forums (x2)
July / August 2015
Forums and dissemination events
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Conditions
The response to this RFP will adhere to the following conditions.
1. Invoicing
The consultant may invoice the CEC based on the following breakdown:
•
Monthly progress invoices: 70 %
•
On completion of the Draft Report: 10 %
•
On completion of both Final Reports: 20 %
2. Evaluation Criteria
Proposals are to be prepared taking into account the Objectives, Focus Areas, Approach,
Deliverables and Timeline as outlined in the Specification of Services.
The consultant must be able to demonstrate understanding of the task’s objectives and
the ability to deliver the Services. The consultant’s proposal is expected to address the
following Evaluation Criteria:
•
Price
•
Proposed approach and methodology, including an outline of how the task will be
completed and how key components of the task will be undertaken, researched
modelled and completed (as necessary).
•
The consultant’s ability to deliver the Task’s deliverables in accordance with the
Timeline and Price.
•
The consultant’s experience with similar projects.
•
Key personnel and their relevant experience (please include CVs or bios).
3. Selection Process
Proposals must be submitted to the CEC no later than close of business on 5th December
2014.
Proposals will be assessed against the Evaluation Criteria by the CEC and the Steering
Committee.
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The CEC will endeavour to advise the successful bidder within two days after the RFP
closing date, with contract signing by 8th December.
4. Terms
The FPDI project has received funding from the Australian Renewable Energy Agency
(ARENA). The CEC is responsible for managing contracts under the ARENA funding
agreement.
The consultant will be engaged under the CEC’s Services Agreement. This agreement
includes some conditions which the CEC is required to place on the consultant by the
funding agreement in place between the CEC and ARENA.
A copy of the Services Agreement will be provided upon request. The consultant’s
proposal should include a statement that they agree to the Services Agreement’s terms.
Alternatively, it should identify any aspects of the Services Agreement which the
consultant cannot comply with, or wishes to negotiate.
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