Victoria utilities to lead flexibility market development in Australia

Victoria utilities CitiPower and Powercor have selected Piclo’s Piclo Flex cloud-based platform for local flexibility procurement.

The contract, which marks Piclo’s ongoing global advance and entry into Australia, should enable CitiPower and Powercor to seek flexibility capacity across their networks to address the growing problem of network constraints.

Together the two utilities deliver electricity to around 1.27 million homes and businesses in Melbourne’s central business district and inner suburbs and about two-thirds of regional Victoria.

With population growth, home electrification and the rise of electric vehicles, the need for grid flexibility has become increasingly important.

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For example, it has been estimated that by 2026 around a quarter of CitiPower’s customers and a third of Powercor’s customers are likely to have rooftop solar installations, corresponding respectively to increases of 234MW and 750MW since 2021 and a total across both approaching 1.4GW.

“This project will help to further develop our capabilities as a distribution system operator and open more of our network constraints to build the market for flex in Australia,” commented CitiPower and Powercor Head of Network Planning, Andrew Dinning

Flexibility is in its relative infancy in Australia, although it has been extensively demonstrated directly or as a part of some 55 projects supported by the Australian Renewable Energy Agency (ARENA).

In 2023 another pilot was launched by the CSIRO in New South Wales utilising the organisation’s Data Clearing House as the software platform, to provide data towards the creation of a flexible demand policy.

A 2023 report from ARENA reviewing its funded projects highlighted the low penetration of smart meters, particularly outside Victoria, as a major barrier – an issue that the Energy Market Commission is currently addressing with a fast tracked rule change to achieve a national rollout by 2030.

Another key barrier was found around concerns of customers, both business and residential, including cybersecurity, health and safety and operational impacts, while difficulties also were noted in making the business case for customers.

Likely solutions include targeting new solar customers at the time of installation or incorporating flexibility within other services such as the installation of air conditioners.

Piclo Flex is designed to enable system operators as flex buyers to source flexible electricity from flex sellers during times of high demand or low supply.