Are Solar And Batteries Undermining Australia’s Grid? Deep Dive Australia 03: Marc England

Summary of key arguments and discussion (solar/batteries & Australia’s grid, OSGrid “Deep Dive” with CEO Marc/Mark England)

Critique of the “typical solar homeowner” narrative (equity issue)

The discussion argues that many energy transition debates assume a detached homeowner who can add rooftop solar and a home battery. OSGrid highlights that:

• About 30% of its customers lack a garage/driveway, making behind-the-meter options less suitable.
• Around 40% are renters, limiting access to solar + battery benefits.

Implication: the network’s role should be to share benefits broadly, not only with customers who can afford private storage.

OSGrid’s claim: storage should be managed “in the system,” not just behind the meter

The CEO argues that distribution networks can store and shift solar generation:

• “Over time”
• And redistribute energy “over distance and also over time”

This approach can help reduce cost and improve access. The core idea is that storage at or near the network level can mitigate volatility driven by high distributed solar penetration.

Resilience as a core theme (not only climate mitigation)

OSGrid frames reliability and resilience as covering:

• Climate adaptation risks (e.g., storms, floods, and wildfire exposure across their broader footprint)
• Other hard-to-model or non-climate risks, including:
  • Hail impacts
  • Geomagnetic solar storms (space weather), which can damage transformers and take a long time to repair

They stress that resilience involves more than climate-focused capex, including:

• Redundancy (e.g., operating with N-1 style resilience and rerouting capability)
• Supply-chain and spares planning

How OSGrid’s network is physically built for resilience

The episode describes Sydney’s underground ring/main cable system feeding zone substations at roughly 132 kV in the CBD, then stepping down to:

• 11 kV, and
• Customer-level distribution (e.g., 415/240 V)

They also cite the purpose of the tunnels—built after early assessments that street-level or cable arrangements weren’t resilient enough for the CBD’s critical economic concentration.

Regulation and incentives: “aligned but constrained”

Key points include:

• OSGrid is a regulated monopoly that proposes capital spending every 5 years and receives an allowed return (cited around ~6.5%).
• Regulation still includes auditing and efficiency incentives, with consequences for overspending and rewards for under-spending.
• The interview acknowledges a perception that utilities mainly grow the regulated asset base, but OSGrid counters that:
  • They face inflationary pressure and penalties for inefficiency
  • Customer engagement and “social license” matter

Digital twins / innovation vs asset-base growth

A challenge raised is that digital tools could reduce some capex by optimizing upgrades, potentially shrinking the regulated asset base. OSGrid responds that:

• There are misaligned incentive issues worth changing
• Current frameworks still allow incentives for cost-efficient delivery of required upgrades
• Regulatory review afterward ensures the “best cost-benefit” outcome

Solar + battery penetration won’t “kill” the grid; capacity hollowing is limited

The CEO argues that even with rooftop solar—and potential “demand hollowing”—

• Their network peak capacity has only modestly declined over 20 years:
  • about ~6% drop in maximum
  • about ~2% in minimum
• Prior “hockey-stick” demand forecast fears didn’t materialize as expected, partly because efficiency gains outweighed growth.

Why demand is expected to grow again

Two major drivers are emphasized:

• Data centers, including inference and cloud data centers
  • Expectation: about ~2 GW additional demand in coming years
• EV charging growth, with examples such as dynamic/downrated charging on hot days to fit network constraints

They argue these loads can spread network costs and reduce per-home network costs if peaks are managed.

Two-way power flows and the role of storage

With distributed solar:

• Supply can flow upstream and downstream
• The “last mile” becomes the “first mile”

OSGrid says networks can handle bidirectionality, but the main technical constraint occurs when reverse power flows exceed local substation capacity—where storage can help localize and smooth flows.

What OSGrid wants to do—but says they’re restricted from doing

OSGrid identifies a policy/regulatory barrier: distribution networks are not allowed to participate directly in wholesale trading like competitors. This limits their ability to deploy and fully monetize storage inside the regulated framework.

They describe existing community battery deployments where OSGrid installs/tolls batteries, but:

• The wholesale trading and arbitrage value is captured by others due to market rules.

Preferred outcome for customers: regulated ownership (lower cost of capital) rather than unregulated structures requiring higher returns.

Regulatory “sandbox” pilot as a pathway

OSGrid says the regulator and OSGrid have an approved sandbox for controlled experimentation:

• In two suburbs, OSGrid invites competitive markets to build warehouse-roof solar
• OSGrid buys surplus via auction pricing
• OSGrid deploys batteries not only as large units near substations, but also as smaller batteries down feeders to optimize network behavior

They test multiple hypotheses, including:

• Lower delivered electricity cost
• Faster decarbonization
• Improved equity (benefits reaching renters/social housing)

Subtransmission renewable zones and cost-optimized buildout

OSGrid supports planning approaches that can reduce costs when bringing new generation online:

• A Distribution Systems Plan with other NSW networks cites potential savings of ~$4.3 billion across the energy transition in NSW, including reduced dependency on other regions and less gas consumption.
• Their integration strategy includes subtransmission renewable energy zones, connecting renewables at the 132 kV level closer to load.
• They aim for about ~one-third cost per GW compared with other connection approaches.

Wind vs solar diversification

OSGrid argues there is no single solution, but diversification helps manage correlation issues—particularly solar’s strong weather and daytime patterns. They highlight wind as valuable because it is less correlated with solar output and can complement storage and transmission strategies.

Space-weather resilience concern left as an open worry

Near the end, the CEO discusses resilience mechanisms (rerouting, parts/supply-chain lead times). However, the interviewer emphasizes that Australia lacks a national-scale plan for extreme solar storms—presented as a potentially catastrophic and underestimated risk.

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Presenters / contributors (as named in the subtitles)

• Michael Lubre — host/presenter
• Mark England / Marc England — CEO of OSGrid (referred to as “Mark”)
• Rob Morman — cameraman
• Joe Jagger — cameraman
• Kendall Smith — head of operations
• Oscar Boyd — producer
• Jamie Oliver — video editor
• Angus McRone — writer/edited the newsletter
• Briany Worthington — mentioned in relation to the newsletter (not as an on-camera contributor)