Off-grid energy viable for Australia

A new report exploring the improving economics of solar and battery technology suggests by 2020, it could be cost-effective for greenfield housing estates and regional towns to employ stand-alone power systems instead of relying on the larger electricity grid.

What happens when we un-plug – whichexplores the consumer and market implications of viable, off-grid energy supply – was prepared by the Alternative Technology Association and Energy for the People, an organisation focused on developing clean-energy projects for community and residential premises. It explores three alternative Victorian locations for assessing the viability of stand-alone power solutions: the regional town of Bendigo; Werribee – a fringe suburb of Melbourne experiencing rapid greenfield housing estate growth; and inner urban Melbourne.

The study’s findings suggest stand-alone micro-grids for greenfield housing developments, delivered by a specialist energy service provider, are highly likely to be viable by 2020, where natural gas is available. What’s more, stand-alone micro-grids delivered by an energy services provider are likely to be viable by 2020 in regional areas with natural gas, particularly where the short-term weighted cost of capital can be reduced.

The authors of the report outline several implications for the National Electricity Market, stating, “a future in which stand-alone power infrastructure emerges at scale, and in an unplanned way, suggests the risk of significant network and generation infrastructure becoming stranded assets.”

What happens when we un-plug also suggests a number of measures, which could be implemented to mitigate and/or manage such risks, including:

• Co-ordinated trials of small-scale stand-alone power solutions;

• Facilitated purchase of centralised network assets, where they have been shown to be inefficient as part of a centralised supply model;

• The clear and transparent publication of network constraints, made available to the public, oragnised by postcodes;

• Adjustment of the Regulatory Investment Test for distribution, with networks’ threshold to be based on a cost-per-customer basis, as opposed to a capital cost figure alone;

• Assessing networking planning and investment requirements more stringently in areas where stand-alone power solutions are likely to be viable; and

• The implications of a move to virtual net metering, where generation of energy at one location could be offset against the retail bill of a customer located nearby, but on a separate land title, needs to be carefully considered.

“We recognise these network measures are necessarily brief, reflecting the early stage and scope of the research,” the report’s authors said.

“Further work would be required to develop measures that can be implemented, with support from energy market stakeholders.”

The full report can be downloaded at the Alternative Technology Association website. The study will be supplemented by a more detailed research study report that will be released later this year.