The Promise of Hybrid Assets: Harnessing Distributed Energy Resource Technology to Reduce Distribution Network Investment Costs by 15-30%

Much of today’s electricity distribution system was built in the 1950s and 1960s, and is rapidly approaching its end-of-life as equipment becomes more expensive to maintain, less reliable and safety risks increase. At the same time demand is flattening, especially in areas where there is large investments by customers in solar PV. As a result, asset replacement is becoming the largest investment driver by far with Australia’s distribution network service providers expect to invest $50 billion over the 2014-2020 period, and an additional $80 billion over the 2020-2030 period.

In recent years, networks have been increasingly looking to distributed energy resources (DER) to effectively defer peak demand. In this research paper, Energeia suggests that there is even greater potential for networks to harness DER-integrated or hybrid asset solutions for asset replacements as well as new assets. Energeia’s analysis identifies the potential for DER-integrated or hybrid asset solutions for a range of use cases including investment deferral, network replacement and new assets in both environments of increasing and declining demand as an alternative to current least cost network solutions and identifies potential savings to consumers of $1 billion to 2020 and in the order of $8 billion dollars over the next ten years, or 15-30% of the associated investment costs. To read the full analysis note click here.