Article: Building a more dynamic grid

By Rose Mary Petrass

The rapid shift to renewables is reshaping Australia’s electricity system, but can the grid keep up? As more solar, wind, and batteries come online, the grid needs to become smarter, more flexible, and better integrated to manage variability and decentralisation. Transitioning from a rigid, centralised system to one that balances supply and demand in real time is now critical.

The Australian Energy Market Operator’s (AEMO) Integrated System Plan maps a least-cost pathway to support this, but warns of the urgent need to accelerate transmission investment, integration of distributed energy resources (DER), and system-wide reform. Federal and state initiatives, including the Rewiring the Nation program, aim to modernise the grid and support these efforts.

A more dynamic grid: What does grid modernisation look like?

Our experts agree a modern grid must be flexible, resilient, and capable of integrating diverse energy sources.

Jai Thomas (Deputy Director General – Coordinator of Energy, and Lead at Energy Policy WA, a group within the Department of Energy, Mines, Industry Regulation and Safety), says: "To decarbonise, we need to transition our energy system to low emissions, renewable energy. In WA, this means we need new solar and wind farm projects, connected to the grid through new and enhanced transmission infrastructure.”

“Transforming the national energy grid from a rigid, centralised system to a dynamic, responsive network is both a critical and complex challenge,” says James Katsikas (CEO of EDF Australia). We must embrace cutting-edge tech to ensure the grid is always operating at optimal efficiency. Fast-charging infrastructure, AI, real-time data monitoring, and vehicle-to-grid systems are critical, he adds. “This is not just about technology - it’s about using the right technology at the right time and place.”

Glenn Springall (General Manager, Renewables & Distributed Energy at Energy Queensland) agrees grid modernisation hinges on new technologies - but it also requires new market platforms, and business models that enable secure, affordable and sustainable energy. For distribution networks, this means evolving into Distribution System Operators (DSOs) capable of orchestrating large volumes of customer energy resources (CER). This requires “new ways of thinking, new capabilities and considerations.”

What are the biggest roadblocks?

Thomas says: "Delivering new renewable projects at scale presents a multitude of challenges, and we understand that many of these challenges are interlinked and multi-faceted. Tackling them will require collaboration across Government and new ways of working.”

One of the most pressing challenges is investment uncertainty, particularly around who pays for upgrades and how costs are shared. Without clear frameworks, projects risk delays and cancellations.

Technical challenges are also mounting. As variable renewable generation increases, ensuring grid stability becomes harder. Inertia, voltage control, and frequency regulation - once provided by traditional synchronous generators - now require alternative approaches.

Linnie says the biggest challenge is integrating large volumes of rooftop solar and batteries without compromising network visibility and control.

Customer engagement is another hurdle: “It is unknown for the vast majority of customers what their response will be, and this response will determine the future role of the network,” says Andrew Linnie (Executive General Manager of Distribution at AusNet).

Springall agrees technical challenges are only part of the equation: policy settings, regulatory environment and customer incentives are essential.

Supply chain constraints are another roadblock, according to Katsikas: “EDF Australia is uniquely positioned to overcome supply chain constraints due to our size and global experience… However, collaboration remains the true key to success. With the scale of the transition and the need for major infrastructure like Renewable Energy Zones (REZs), we must work in partnership with government, network operators, communities, and developers to ensure outcomes that benefit everyone.”

Strong community and Traditional Owner engagement is vital throughout the development process. “Early and transparent engagement is fundamental,” he says. “We make it a priority to listen to local perspectives and work collaboratively to ensure community needs are respected and addressed.”

What innovations can help build a more resilient grid?

A modern grid hinges on new technologies and systems. Grid-forming inverters can stabilise renewables-heavy networks. Virtual power plants (VPPs) aggregate rooftop solar and batteries for grid support. AI and data analytics enhance forecasting, real-time monitoring, and demand response.

“Innovations are the driving force behind our energy transition!” Springall says. Falling battery costs, smart homes, EVs, and digital platforms are making resilience more accessible and efficient. “It’s an exciting time as these technologies come together to create a more efficient and sustainable energy system.”

Katsikas argues for a more balanced energy mix. He sees wind and pumped hydro energy storage (PHES), as key: “We can’t rely on a bundle of batteries to provide firming capacity 20 years from now,” he says. “We conservatively need around six times the capacity of Snowy 2.0 to achieve 95% renewable penetration. Pumped hydro offers the deep storage solution necessary to maintain grid stability and resilience. Supporting hydro as a long-lived asset, separate from batteries, is essential to our long-term energy strategy.”

For Linnie, a mix of innovation and new thinking is essential. Microgrids and standalone power systems reduce reliance on long networks in remote areas. And he says AI and predictive analytics, alongside smart meters and self-healing networks will boost real-time grid responsiveness, fault detection and maintenance.

How can policy and market reform regulatory change help?

Transmission planning and approvals can take years, slowed by complex regulations, community concerns, and project scale. Linnie says outdated frameworks - designed for a centralised grid - must be modernised to support non-network solutions and greater DER participation.

Thomas points to Project Jupiter as an example of a recent breakthrough in Distributed Energy Resources. The project “will create Australia's first live DER marketplace integrated with the wholesale energy market… based on learnings from the State’s flagship VPP pilot, Project Symphony, and new regulatory powers enabled through the DER Act 2024.”

“Policy stability is absolutely essential to long-term investment and project planning,” Katsikas says. “Investors and developers need consistent frameworks that give them the certainty to move forward with confidence. At the same time, we are competing on a global scale for skilled workers, equipment, and production capacity. Building a modern grid requires not just technical innovation but also the ability to mobilise resources effectively.”

Finally, Springall says regulation must strike a balance between being prescriptive and open to innovation: “New technologies have emerged, and the policy, regulations and customer protections need to stay contemporary!”

Representatives of Energy Policy WA, Energy Queensland, AusNet and EDF Australia will be joined by other industry heavyweights at Australian Energy Week 2025. Learn more.

To access the detailed conference program, download the brochure here.