Quokkas on the savannah? How ARENA’s work could help spur renewables in Africa

Quokka (Setonix brachyurus) on Rottnest Island, Western Australia.

Imagine you are on Flinders Island, hunkering down by a fire as the winds whistle outside, resting your legs after conquering Mount Strzelecki. Cast yourself off to Coober Pedy, burrowed underground, protected from the harsh sun while you sort through dozens of glistening opals.

And imagine if I told you that each of these places can deliver valuable lessons to investors in African microgrids?

This week is the 15th anniversary of the Africa DownUnder Conference, created to raise awareness of Australia’s interests in African mining and energy. This year, the conference was held in Perth and I had the pleasure to speak at a side forum on microgrids and the investments ARENA has made in remote renewable projects.

Why Africa?

Australia and Africa might feel like very different places but when it comes to energy systems and end users, they have more in common than you’d think. Both possess long, thin networks and vast amounts of renewable and nonrenewable natural resources as well as low levels of grid penetration compared to land mass.

Over the past five years, ARENA has supported around 14 projects with a total value of more than $320 million adding 80MW of renewable energy capacity to off-grid and fringe-of-grid areas in Australia.

In doing so we’re working on improving the future energy supply to remote parts of the country. But we’re also trialling new methods and concepts that could be applied to developing countries across the globe.

The Coober Pedy Renewable Diesel Hybrid project, the DeGrussa Solar Project, the Flinders Island Hybrid Energy hub and the Northern Territory Solar Energy Transformation program, delivering hybrid renewable energy systems to over 30 remote communities in the Northern Territory are examples of the projects ARENA has funded.

Each of these projects has helped ARENA accelerate Australia’s shift to a renewable energy future, but how do the lessons we’re learning in these projects help developing countries in Africa?

Unique in more ways than one

Australia is unique: as a developed country it has one of the lowest levels of grid electricity penetration in relation to land size.

While the National Electricity Market and the South West Interconnected System make up 92 per cent of Australia’s electricity generation, they only cover approximately 20 per cent of the Australian land mass. In places such as Western Queensland, the grid is so thin that quality electricity supply is a “nice to have”, not a “have to have”.

Those characteristics, and ARENA’s work, have positioned us as leaders in the microgrid space. That means we can we help the rest of the world understand the challenges of investing in remote micro-grid solutions based on the work ARENA has done to date.

Remote = challenging

Remote area and off-grid conditions require a balancing act between technical, commercial and stakeholder requirements to achieve the best result for that location’s characteristics.

The bespoke nature of off-grid and remote projects generally results in higher risks (both actual and perceived) which, coupled with the limited supply chain and knowledge of market participants, result in higher costs than their grid-connected equivalents.

What can sometimes appear to be “easy” cases of adding modular renewable technologies to existing infrastructure, end up requiring a deeper look at energy use and supply, and understanding how risks change when new elements are added.

As renewable energy penetration goes up, so does the complexity, cost and technologies required to balance the system. Each technology added brings with it complexity and risk. The smarts to bring all these together remains challenging, even with the brightest minds developing innovative and cheaper approaches.

Lessons from Australia

Here are some of the lessons that we can impart to those looking at investing in options for secure, affordable, reliable and sustainable energy in Africa.

Mining and communities are inextricably intertwined. Not just in terms of jobs, but also because the energy required to power a number of mines is often used to power local communities. Both are required to come together to deliver the best power solutions and, ideally, these solutions are a net benefit to the local environment.

Think about the best way to utilise existing assets. As is often the case in remote systems, there will likely be existing infrastructure. Look at whether there is network infrastructure or generators which can be repurposed or utilised to deliver renewable solutions. While shiny and new is always shiny and new, sometimes the best ways are using what is already there (plus, with the best and the greatest, often if something goes wrong you can fix it with a bit of gaffer tape). And sometimes a 40-year-old diesel generator is just not going to be able to work with newer technology!

Integration of multiple technologies is tough. Even grid connected projects that deploy a number of different technologies are difficult. Don’t underestimate the difficulty in getting all the various pieces of technology to talk to each other and speak the same language.

Don’t discount demand management. While we spend a lot of time looking at the supply side of the equation, an equal amount of time should be spent on the demand side of the equation. Why put in an extra back up generator when it is easier and cheaper to manage demand better?

While I could go on, and I am sure theses have been written about delivery of power solutions in remote areas, I will stop there. Provided you aren’t still lost in the wilderness of Flinders Island and have actually kept reading. Side note: I recommend a visit.

ARENA is continuing to learn from the projects we have supported and deliver insights that are helpful to a range of stakeholders (developers, investors, community stakeholders and technology companies). So if you are sitting at your city desk thinking about helping deliver a remote renewable project, please pick up the phone, we would love to take you on a journey.

This article was originally written by Chris Twomey, former Investment manager, ARENA.

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