Guide to electrical upgrades to accommodate industrial heat pumps
While heat pumps can reduce energy consumption and provide a clean heating solution, they can often lead to an increase in electricity consumption and often also increase in peak demand. Before engaging a contractor to install a heat pump it is important to understand these points and the implications for your business.
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When would I need an upgrade?
If the addition of a heat pump will increase your demand beyond the capacity of your existing electrical supply, you will need an upgrade. The degree of upgrade works required will depend greatly on the specifics of your business (size, operational profile, location, etc.) but can include, for example:
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Switchboard upgrades – new circuit breakers, surge protection, etc.
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Transformer upgrades – more power required (kVA) where poles and wires can supply the necessary demand.
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Distribution substation upgrades – where additional power demands will overload the distribution substation supplying the local network.
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Other – for example, additional voltage regulation.
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What is the process?
The procedure for upgrading your electrical connection will depend on your distribution network service provider (DNSP) and how much additional power you require. Generally, the process involves the following steps:
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Determine projected maximum demand – You may wish to engage an electrician of electrical engineer to aid with this process, particularly if the upgrade is more complex, related to several pieces of machinery, or may require consideration of load sequencing, etc.
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Review the electrical upgrade procedures relevant to your Distribution Network Service Provider (see table below)
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Complete an application form – For some DNSPs this is a paper/electronic form, others it is completed via an online portal (registration required). Generally connections that are <100amp/phase are considered simple, >100amp are more complex and may involve negotiated connections.
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Pay for an upgrade design – a small fee may be required to cover the cost of evaluating and designing a supply solution.
Should you choose to proceed, you will need to:
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Pay for the upgrade – some DNSPs offer contestable solutions via tendered works through accredited service provider. Typically, the business requesting the upgrade pays for grid-side assets, but they are then owned and operated by the DNSP once electrified.
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Contact your retailer for metering services
Figure 1 below is a schematic representation of the process within the AusNet Services network (Victoria).
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How much does an upgrade cost?
This is one of those 'How long is a piece of string?' questions. However, costs incurred may include:
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fees from your electrician or electrical engineer,
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the application fee,
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design fee,
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construction and installation fee.
While the service and application fees are relatively minor, upgrade costs are dependent on different factors such as existing maximum demand, additional load, least costs for the works, requirements of the end customer (e.g., they desire a bigger size substation), and commercial load vs industrial load. Advice from DNSPs and anecdotal evidence suggest prices can range from as little as $30k – to as high as several million dollars. Currently, there is very little clarity for business for these costs prior to undertaking the application and design process.
Can I avoid or mitigate an upgrade?
The capital cost for high temperature heat pumps is relatively high compared to traditional carbon-fuelled heating options and generally scales with the heating capacity. Running a heat pump continuously and integrating it with thermal storage to smooth out times of generation and demand will not only deliver lowest lifecycle costs, it will also reduce the extent of (and possibly eliminate the need for – an electrical upgrade. Correctly sizing thermal storage is a vital step to ensure the electrical demand increase is as small as possible.
Webinar: Three ways to avoid a costly electrical upgrade
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For some excellent tips on how you can avoid an electrical upgrade for your heat pump or other electrical heat project, watch this webinar from A2EP featuring advice on energy efficiency and flexible demand. Watch the webinar.
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Getting in touch with your Network Service Provider
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You can determine your Distributed Network Service Provider (DNSP) by visiting the Australian Energy Regulator website.
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