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New centre helps businesses cash in on renewables

Would you be more likely to buy a product or service if you knew it was created with renewable energy?

Three quarters of Australian consumers would be, according to research ARENA undertook last year.

Building on the finding, ARENA has announced $500,000 in funding to help create Australia’s first Business Renewables Centre (BRC-A).

Partnering with Climate-KIC Australia, the World Wildlife Fund Australia and the Institute for Sustainable Futures at the University of Technology Sydney, the new initiative will help businesses and councils to make the transition to renewable energy.

The Business Renewables Centre will provide online resources, inexpensive training and advice, face-to-face events, and build a network of renewable energy buyers and sellers from across industry via an online marketplace.

Drawing on the successful Rocky Mountain Institute model, the centre is setting out to procure 1 GW of energy from renewables by 2022, growing to 5 GW by 2030.

Supporting Australian businesses and councils to make the shift through corporate Power Purchase Agreements, the new centre has also received $150,000 each from the Victorian and New South Wales governments.

With 260 member companies, the Rocky Mountain Institute’s BRC has completed more than 11,000 MW in renewable energy deals since its launch in 2015. Ninety-six per cent of total US non-utility renewable energy deals involved a BRC company.

PLENTY OF WORK TO DO

Last year, ARENA released the Business of Renewables report, finding Australia’s biggest businesses were falling behind their global peers in transitioning to renewable energy.

The report also uncovered a vast amount of untapped goodwill for businesses willing to make the switch.

With three quarters of consumers saying they would choose a product or service powered by renewable energy, the next question was how to support businesses to transition.

ARENA CEO Darren Miller said the Business Renewables Centre will help energy buyers meet the growing expectation that we deal with the challenge of climate change.

“The Rocky Mountain Institute has proven how effective this model can be. Once up and running, Australia’s Business Renewables Centre will make it easier for companies and councils to enter the renewables market.

“The future for energy looks very different today. There are likely to be a lot of smaller renewable generating facilities developed, often by non-generating entities.

“Clearly there is demand for the energy, and soon there will be somewhere for businesses and councils to go to help them make the transition,” he said.

WWF Australia CEO Dermot O’Gorman said that the Business Renewables Centre will build on the success of WWF’s Renewable Energy Buyers Forum.

“The future of renewables in Australia looks positive because it makes sound business sense,” Dermot O’Gorman said.

With more than 230 member organisations, the WWF Renewable Energy Buyers Forum has brought generators, retailers and energy users together since 2015.

Discussing everything from the opportunities and impediments to making the switch to renewables, to technological and price barriers, the Forum has uncovered a market for the services offered by the Rocky Mountain Institute.

“Contracting for long-term renewable energy will save customers money and will support growth in renewable energy infrastructure across Australia,” Mr O’Gorman said.

The new BRC-A will build on the Forum’s success, supporting renewable energy developers, service providers and corporate buyers to improve access to renewable energy and lower the cost of transactions.

Climate-KIC Australia CEO Christopher Lee said that the Business Renewables Centre will go beyond the existing offerings to build capacity amongst renewable energy developers and buyers.

“The online platform provides a marketplace where developers and corporate buyers can get a feel for what might be out there, as well providing a suite of technical materials, from case studies, primers and guides and pitch decks,” Mr Lee said.

“In addition we will rollout deeper training than has been offered previously – basically we’re going to run two day ‘boot camp’ events for buyers and developers to take them through the details. Do a deeper dive on the how to’s, managing risks and avoiding usual pitfalls, and work through some real life scenarios. That’s where the real strength of the offering lies.

“We know from lots of experiences that online sites often don’t get far at all, and putting a load of information on the web doesn’t translate into action on the ground,” he said.

“It’s that training piece that’s really important. What we are seeking to do is extend the work that WWF has done in their buyers forums, the show and tell activity, that has people thinking – yes, we can do that.

“We hear about the successful ones, but we know there are a lot of corporate PPAs that have not seen the light of day because they’ve been very complex or they’ve got to the CFO and they’ve said they don’t understand it,” Mr Lee said.

Upcoming report – Understanding Australia’s hydrogen export opportunity

Australia has vast renewable energy resources, good export capabilities and strong relationships with key international energy markets. As the global economy transitions to low emission energy alternatives, Australia is well positioned to export renewable energy to meet the energy needs of other nations.

Exporting renewable energy is an ARENA investment priority and supporting the development of a renewable hydrogen supply chain has been identified as an option that could fulfil this long-term vision. To understand, model and quantify this possibility, ARENA has engaged ACIL Allen Consulting to prepare a report to assess Australia’s potential opportunities from the export of renewable hydrogen.

This report will include an analysis of:

  • Expected price points for renewable and low emissions hydrogen
  • Potential market demand
  • Distribution of demand according to commodity and end use
  • Assessment of Australia’s likely competitive advantages compared with other potential producers
  • Australia’s potential market share of the sector
  • Evaluation of the national benefits from hydrogen exports
  • A roadmap to achieving Australia’s potential hydrogen export market share

In parallel to ARENA’s work, the CSIRO is undertaking a National Hydrogen Roadmap, which has a domestic, techno-economic focus. Although independently produced, the two reports are intended to provide complementary analyses and are expected to be released in August 2018.

For more information on ARENA’s market opportunities report, please contact us.

Building the case for a second interconnector for Bass Strait

On behalf of the Australian Government, the Australian Renewable Energy Agency (ARENA) and TasNetworks today announced plans to work together to explore a more detailed feasibility and business case assessment for a second interconnector across the Bass Strait between Tasmania and the mainland grid.

A second interconnector after Basslink would allow Tasmania to expand the amount of electricity it could provide to the grid, allowing Tasmania to play a greater role in the National Electricity Market. It would also provide a backup to ensure supply to Tasmania.

This more detailed feasibility and business case assessment is expected to cost an estimated $20 million, to be funded by both ARENA and TasNetworks.

TasNetworks and ARENA are defining the scope of the more detailed feasibility and business case assessment to be formally assessed by ARENA. The business case for a second interconnector to link Tasmania and Victoria across the Bass Strait would consider:

• The optimum capacity
• The preferred route
• Technical specifications and supply arrangements for the cable, and grid interconnections
• Potential timing
• Detailed cost estimates
• Regulatory revenue investment test
• Financial and development models to implement the second interconnector

ARENA has previously committed up to $2.5 million for Hydro Tasmania to undertake early stage feasibility studies as part of the Battery of the Nation project.

This work includes upgrading of existing hydro power stations, identifying 15 high potential sites for pumped hydro and how wind power and hydro could help provide dispatchable, reliable power to other states.

This more detailed feasibility and business case assessment will build upon the Tamblyn review and will be informed by the findings of the Battery of the Nation feasibility studies.

The third of these studies currently underway considers how Tasmania can play an expanded role in the NEM through increased wind power and reconfiguring or expanding its hydro capacity, which would rely upon a second interconnector. Preliminary findings from that study indicate that the benefits of a second interconnector could outweigh the costs by $500 million.

ARENA Chief Executive Officer Ivor Frischknecht said making the case for a second interconnector could enable Tasmania to act as a giant battery, providing large scale renewable energy generation and storage capacity.

“Tasmania has some of Australia’s best wind resources, a large established hydro electric system and the potential to develop pumped hydro sites. To harness this potential, a second interconnector would need to be constructed to enable further generation and storage capacity to be delivered to the rest of the NEM.

“With Hydro Tasmania, ARENA is already investigating the feasibility for new wind and pumped hydro, and this business case would be the next step,” Mr Frischknecht said.

TasNetworks Chief Executive Officer Lance Balcombe said a more detailed feasibility and business case assessment would be a crucial step towards determining whether a second interconnector was viable, and how the project should proceed.

“TasNetworks is excited to work with the Australian Government and ARENA to explore the potential for a second interconnector which could unlock huge potential for Tasmania to become a major energy exporter,” he said.

ARENA media contact:

0410 724 227 | media@arena.gov.au

Download this media release (PDF 121KB)

A new way of providing energy to isolated communities? Look to the Horizon…

It’s happening fast and it can’t be ignored; the way our energy system operates is undergoing a massive transformation.

And to say it is changing is to note only part of the story. The truth is that WE are changing it.

When Australians install solar panels on their roof (as more than 20 per cent of us have done), when we add battery storage or buy an electric car, all of these things – known as distributed energy resources (DER’s) – add to the complexity of our energy system.

A new project, funded by ARENA, is seeking to understand how this rapidly-changing landscape can be best integrated with the needs of microgrid communities – those that run their own local power networks and are not connected to the national grid.

Horizon Power will receive $1.92 million for a trial based in the remote Western Australian town of Carnarvon. The project aims to give the company – which operates 34 microgrids across the state – a set of unique insights into how to work with, cater to and draw from distributed energy resources.

The remote town of Carnarvon in Western Australia will play host to the trial.

 

And that should mean future systems can be designed that make it easier for householders to contribute electricity to the broader system and reward them more handsomely when they do.

ARENA CEO Ivor Frischknecht said the trials would provide innovative solutions for customers who are increasingly looking for more choices in how they manage their own energy requirements.

“This is an exciting opportunity for ARENA is excited to support ground-breaking research into the management of renewable energy and energy storage that will benefit  and empower consumers,” Mr Frischknecht said.

WHY IT’S NEEDED

Each microgrid consists of a centralised power station and a localised distribution network that is not connected to the broader grid.

As the cost of rooftop solar panels has fallen, demand for such systems has continued to rise, abetted by incentive schemes. Rising energy prices have also contributed to the world-leading boom in rooftop solar and battery storage is now tracing a similar uptake curve as rooftop solar users realise the additional benefits derived from being able to store the electricity they generate and use it later.

A new generation of energy users, dubbed prosumers, are both generating and storing their own electricity in ever-growing numbers. As well as providing for their own energy needs, this change opens up the possibility for customers to not only receive electricity but to provide it to others. And, of course, to be rewarded for doing so.

But markets for these services are still in their early stages and there are a number of factors that make it harder than it should be for prosumers to sell their unwanted electricity into the microgrid in a seamless, efficient way.

More needs to be understood about how these relationships can best work before integration of DERs into microgrid systems can take place.

That’s what the Horizon project aims to overcome. It’s about understanding how prosumers are using and producing energy in order to better design a system that encourages them to be full participants.  

This image is from the sky camera that forms part of the Horizon project in Carnarvon. IMAGE: Horizon.

 

HOW IT WORKS

Key to increasing renewable energy flow into microgrids is the ability for the utility which operates the system, such as Horizon, to be able to see and control the Distributed Energy Resources spread around the network.

By achieving this two way communication the microgrid can be optimised and the right price signals can be put in place to encourage to encourage households and businesses to sell their renewable energy back into the system.

The project will trial the most cost effective ways of achieving this visibility and control. It’s expected that getting better visibility into how distributed resources are being used and what the barriers to drawing on them might will allow future microgrid systems to be designed with these challenges at front of mind.

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A number of different methods will be used to gather that information.

Internet of things energy metering devices (such as Wattwatchers) will be installed at the premises of at least 90 Carnarvon residents or businesses to separately measure and record their solar PV generation and net load.

A new solar PV and battery combo system plus a remote monitoring and control device (such as Reposit Box) the  will also be installed at the premises of at least 10 Carnarvon residents/businesses.

A new inverter; and a remote monitoring and control device, will be installed at the premises of at least 5 participants.

A sky imaging camera and weather station will also be installed at Carnarvon so as to analyse the impact of the weather on renewable energy production and customer load, particularly cloud events that can cause significant power fluctuations on microgrids.

The trials will be conducted over three years to ensure Horizon Power collects adequate data for analysis, which will involve Murdoch University and industry partners.

 

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The Australian summer is coming and so is demand response

It’s an idea that is getting a lot of attention and one that – like all big ideas – requires some explaining.

Demand response is soon to arrive. And it’s shaping up to be even more successful than we had hoped.

Both individual consumers as well as businesses will have the opportunity to earn money this summer by voluntarily reducing their energy consumption in a program jointly run by ARENA and the Australian Energy Market Operator (AEMO).

When ARENA announced in May that it was seeking applications for a funding round based on demand response we were hopeful the call would save some 160 MW of power that would otherwise be used.

The response (so to speak) has been extraordinary and while it is too early to announce the projects that have been selected for funding (and the total amount of energy the pilot program will save) we can confidently say it will exceed the 160 MW originally sought.

The Australian summer will soon be here. And so will demand response.

As summer approaches, this new way of doing things in the energy sector is attracting plenty of attention (you may have seen it splashed all over the front page of one major newspaper recently). There’s a lot of talk around, so we thought we’d explain where demand response is at and how it will work.

“Demand response is proven to be a cost effective way to free up electricity supply during extreme peaks to avoid the risk of unplanned outages, and can also help reduce the wholesale price of electricity when demand spikes,” ARENA’s Phil Cohn says. 

“It’s also a win for consumers. Money goes directly back into the pockets of local households and businesses to help reduce their energy costs.”

Proposals were received from 24 applicants, including energy retailers, energy networks, demand response aggregators, smart thermostat and technology companies. We also received applications from large industrial and commercial energy users, offering proposals to reduce their energy use in peak times.

Total funding for the program is $37.5 million, of which $30 million will be contributed by ARENA and the balance from the NSW Government. ARENA is now sifting through the 24 applications and will be in a position next month to announce which have been successful.

Successful projects are expected to involve thousands of residential households as well as large industrial and commercial energy users who will all voluntarily sign up in exchange for an incentive that will help their energy costs

Work will then begin immediately to ensure those projects are ready to roll out for the coming Australian summer.

WHY IS THIS IMPORTANT?

It will be a timely intervention. AEMO this week supplied the Federal Government with advice that parts of the electricity market (particularly in South Australia and Victoria) may not have sufficient supply of dispatchable energy to prevent “load shedding” or blackouts this summer.

AEMO said the levels of dispatchable energy – power which is available whenever it is needed to be added to the electricity system at times where demand and supply are out of balance – is at similar levels to previous instances when load shedding has occurred.

READ MORE: Paula Matthewson’s story about AEMO’s warning

This means there is a significant risk of similar load shedding happening over the coming summer.

AEMO suggested a “strategic reserve” of 1000MW be created and set aside for the purposes of being able to respond to spikes in demand and ensure stable electricity supply.

The electricity saved by the demand response program will count towards that important reserve. The three year trial will provide at least 160MW of emergency reserves to help manage peak demand this summer and beyond.

And 100MW of that will be in SA and Victoria, where an urgent need has been identified.  Of the funds committed, $15 million will be earmarked for NSW projects, while $22.5 million will go to projects in Victoria and SA.

SO WHAT IS DEMAND RESPONSE?

At times when electricity demand spikes (such as on hot days during summer) the amount of electricity required to service that demand can be more than the capacity of the grid to meet it. On such very hot days, for example, Australians will use 46 per cent more electricity than they usually would.

Expanding our electricity generating infrastructure to be able to handle that level of demand would be extremely expensive. We’d also be doing it to produce an amount of supply that is needed only very occasionally.

Traditionally, we have responded to this problem by building generators to provide backup supply that we hardly ever use – mostly natural gas-fired plants that are turned on for as little as 20 hours a year.

It’s a costly business. The 550MW plant completed near Mortlake, in Victoria’s west, in 2012 cost $640 million. As with other plants of its type, it gets used only at times of extreme demand. And much of that cost ultimately gets passed onto consumers.

The simple idea behind demand response is that rather than pay to increase how much capacity is available we instead pay (a smaller amount) to reduce the amount of electricity being used. It’s both cheaper and more efficient.

READ MORE: ADAM MORTON’S demand response EXPLAINER

WILL I HAVE TO DO THIS?

No. Demand response is completely voluntary and at the household level it mostly involves slightly reducing power consumption in ways that wouldn’t be noticeable to the consumer (such as shifting non-essential electricity use like running the dishwasher or pool pump to another time when demand on the overall system has decreased)

HOW WILL IT WORK?

Those who sign up could be large industrial operations willing to temporarily shut down some processes that consume a lot of electricity. They could be commercial users willing to delay or shift production for a few hours. And they could be energy retailers who would, in turn, sign up households to be involved.

Those households could give over control of some appliances, such as pool pumps and air-conditioners, so that retailers (that’s the energy company that sends you your monthly bill) could turn them off or turn them down to agreed levels.

It’s expected that consumers would agree in advance to these measures in exchange for a discount on their power bill or a cash bonus when they are called upon.

The payment to those who voluntarily reduce their electricity use would be made by AEMO, at a market-set rate and in addition to the $37.5 million already dished out by ARENA and the NSW government.

THIS ALL SEEMS PRETTY EXPERIMENTAL…

It isn’t. Demand Response is a proven method that is successfully used elsewhere in the world. It has shown to be an extremely cost effective way to free up electricity supply during extreme peaks in order to avoid the risk of unplanned outages. And it can also help reduce the wholesale price of electricity when demand spikes.

In Texas, demand response provides regular electricity savings and it has also been introduced across other parts of the United States with success. It has been calculated that if Australia relied on demand response to similar degree as Texas the energy saving would total 3000MW. Demand response is also being successfully used in Taiwan and South Korea.

The Paris-based International Energy Agency last year described it as a potential game-changer for electricity markets, estimating it could cut use at peak times by 15 per cent.

Demand response is an idea that is fast catching on.

 

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

Picture yourself on idyllic Rottnest Island, peering across the crystal clear blue water, wondering what exactly a quokka is. 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.

Solar panels on a roof in Madagascar. IMAGE: Adobe.

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?

Solar panels and red dirt at the DeGrussa copper mine. IMAGE: ARENA.

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.

 

Chris Twomey is an Investment Manager at ARENA. These are his views and not necessarily those of ARENA.

An innovative idea helped put solar panels on the roof of this Victorian winery


Look up, for a second. If you’re in Victoria, above your head is an estimated 104km2 of roof-space on commercial buildings. That’s in just one state.  

Imagine a world where it was filled with solar panels.  

That space – just the commerical rooves in Victoria – would produce enough solar power to supply between one third and one quarter of Australia’s total energy needs.

Sure, I hear you thinking, “wouldn’t that cost a fortune?”.  

Well, yes it would (about $19 billion). But what would be the return on that cost?  

Here’s where it gets really interesting. For an increasing number of the approximately 570,000 businesses under these rooves, if financed correctly; the investment of installing rooftop solar would be worth it.

The money those businesses are spending on electricity bills would be reduced by an amount greater than the loan repayments required to finance them.  

That means more and more businesses can now finance solar on their rooftop and have more cash in their business as a result. They just need a helping hand.

WHAT KIND OF HELPING HAND?

Environmental Upgrade Finance (EUF)  was first conceived in the City of Melbourne in 2010. It was created because, then just as now, there were commercial opportunities in projects such as installing solar and improving energy efficiency, but businesses faced barriers to investing in such projects.

For one thing, the majority of business in the state of Victoria, don’t own their own building. In fact, around 54 per cent of all businesses are tenants, which makes investment hard.  Why put up the cash to finance rooftop solar for your building when it isn’t really your building?

EUF addresses these barriers, which enables 100 per cent of project costs to be financed, regardless of whether you are a tenant, landlord or owner/occupier.

HOW IT WORKS

At the highest level, EUF is a loan provided by a lender like Sustainable Melbourne Fund, to a building owner. Repayments are collected by local governments via a special council rate, called an Environmental Upgrade Charge.

Unlike other forms of finance, EUF doesn’t require a mortgage, directors’ guarantees or registered security interests on the Personal Property Security Register (PPSR).  

The Environmental Upgrade Charge is a charge on the land (just like normal Council Rates). It can therefore be transferred between owners or tenants upon sale or change of occupancy. If a business moves premises, the new tenant simply picks up the future rate repayments.

So how do we make such finance more widely available?  

Well, there are 79 different local government areas in Victoria.  For EUF to be available to these businesses, each of those Councils needs to offer it to their community.  

Not just that. Each of these Councils need to offer EUF in a manner that is the same as the other 78.  Without such consistency, the rules and documentation become confusing and the result will most likely be the creation of a non-competitive market with economic inefficiencies.

WE’RE HELPING WITH THAT

ARENA and SMF have partnered for a 3-year $1.77M project to help build an efficient and competitive marketplace. That means that the rules, processes and costs of utilising EUF, no matter the Council region, can be the same.  

Solar panels have been installed atop the Booth Transport headquarters. IMAGE: SMF.

The partnership started in April 2016, with a program to target 15 local governments throughout Victoria to open up EUF offerings using the template approach developed and tested by SMF in the City of Melbourne since 2010.  

It has been successful; 14 local governments have been opened up in little over 12 months (outstripping expectations of 15 over 2 years).

Additionally, $8.25m in investment has been committed across 13 businesses. That group, which includes Paringa Estate and Booth Transport are collectively saving $1.5million a year.

Truly efficient and competitive marketplaces require scale. And having just 15 of a total of 79 councils offering EUAs doesn’t quite provide it.  Scale of a marketplace is required to enable market participants to justify the cost of entering into it.  General market understanding of the new product needs to be increased and raising this awareness takes time, money and expertise.  

Market entry will increase when businesses, who provide the services into that market, can observe a growing, scaleable and liquid marketplace.  This is why ARENA and SMF have extended upon the partnership to open up a total of 30 Councils in the coming two years.

This partnership will deliver a marketplace of suitable scale and investment opportunities to encourage market entry. That, in turn, increases market competitiveness which then encourages market expansion.  

Solar panels meet grape vines at Paringa Estate winery. IMAGE: SMF.

The potential marketplace is big – $19 billion in solar panels alone. And that doesn’t even take into account the broader range of industry sectors or the types of other projects and technologies that can be financed (for example energy productivity and water efficiency). Virtually anything that delivers a positive environmental outcome could be included.  

 

WHAT KIND OF BUSINESSES ARE MAKING THE SHIFT?

As EUF was started in the City of Melbourne, many assumed that it would mostly be applied to commercial offices. But since expanding beyond the boundaries of the CBD, projects in such industries as wineries, hospitality, transport and distribution and agriculture have been undertaken.  

Take Booth Transport in Laverton. Without providing any of its own cash upfront the business, which employs 600 people and has relatively high energy costs, has installed a 100kW solar array and LED lights. The savings from these projects are greater than the repayments under EUF and they have more money in their business as a result.  

Mitchell Booth says his company has benefitted hugely from the scheme. IMAGE: SMF.

“We wanted to make an environmental statement, we wanted to make our customers and our staff feel good and we wanted to save money on rising utility prices,” says Mitchell Booth, a Principal at the company.

The company will save around 30 per cent of its current power bill and there are plans to reinvest that money back into the business.

Or there’s the very happy winery, Paringa Estate, which has taken advantage of EUF, and installed a 27kW solar array atop their restaurant and cellar door.

WHERE TO NEXT?

In order for this market to be a success two additional things need to happen:

  1. More customers need to be made aware of EUF and gain greater understanding
  2. More capable industry expertise is required to be able to deliver the projects which can be financed by EUF

The last point specifically is going through some significant changes.  The solar industry in Australia originally began to take off in the residential sector with generous subsidies and feed in tariffs spurring growth. More recently, growth has moved, with the help of ARENA and CEFC, into utility scale projects.

Commercial scale solar is now starting to grow significantly based increasingly upon the project economics.  With the helping hand of EUF and partnerships like that of SMF and ARENA, we expect commercial scale renewable energy to increasingly become a compelling business need.  

 

 

ARENA and AEMO looking to evolve traditional electricity market

In an Australian first, the Australian Energy Market Operator (AEMO), the Australian Renewable Energy Agency (ARENA) and South Australia’s Hornsdale Stage 2 Wind Farm (Hornsdale Stage 2) are collaborating to trial whether a wind farm can provide important power system stability services.

HWF2 has been developed by French renewable energy company Neoen in conjunction with international infrastructure investor, John Laing.

Slated to begin in October 2017, the trial will test the ability of Hornsdale Stage 2 to provide Frequency Control Ancillary Services (FCAS) traded in the National Electricity Market (NEM) while remotely controlled by AEMO.

FCAS is used by AEMO to maintain the frequency on the electrical system, at any given point in time, close to fifty cycles per second as required by the NEM frequency standards. Put simply, FCAS provides a fast injection of energy, or fast reduction of energy, to manage supply and demand.

Traditionally provided by synchronous generators such as coal and gas plants, these services are purchased by AEMO to maintain frequency and ensure the stability and reliability of the grid.

“The evolving generation mix in the NEM is changing the way AEMO operates both the grid and market. This trial will enable us to test new and emerging technologies that could supply services the market will need in future,” said AEMO CEO Audrey Zibelman.

Hornsdale Stage 2 is committing $300,000 to the FCAS trial, matched by ARENA, bringing the total funding for the project to $600,000.

Neoen Australia’s Managing Director, Franck Woitiez said the partnership signals the shift towards a more sustainable Australia focused on exploring future energy supply services.

“South Australia in particular is leading the charge to secure a more sustainable energy future so we’re proud to be working with ARENA and AEMO on this trial at our Hornsdale Stage 2 Wind Farm. This project will show the potential of renewable resources like solar and wind power to provide Australia with controllable, clean energy that can keep pace with future demand,” said Mr Woitiez.

ARENA CEO Ivor Frischknecht said the FCAS trial would test the NEM’s ability to fully integrate renewables and further facilitate Australia’s transition towards renewable energy.

“This is an opportunity to enable wind and solar generators to fully participate in the NEM and add to system stability in addition to generation,” Mr Frischknecht said.

Subsequent to testing the ability of HWF2 to provide FCAS services, the trial will also demonstrate the technical capability of Type 4 wind turbines to be remotely controlled by AEMO.

“AEMO supports and encourages a framework for new technologies that ensures power system security yet continues to encourage competition. This trial is an essential step towards a more efficient and competitive FCAS market that ultimately benefits consumers,” said Ms Zibelman.

Following the successful completion of this capability demonstration, a market trial will run for 48 hours to test the ability of Hornsdale Stage 2 to fully participate in the NEM and NEM FCAS markets.

This market trial will allow AEMO to assess modifications that may be required to wind forecasting, bidding and energy management systems to support on-going provision of FCAS from wind and solar farms operating in the NEM.

If successful, the trial will provide a critical proof of concept to the market and investors on the ability of wind farms to provide FCAS.

“AEMO welcomes the opportunity to play a role in strategically integrating renewable generation into the National Electricity Market (NEM), to ensure a reliable, secure and resilient power system now, and into the future,” Ms Zibelman said.

 

ARENA media contacts:

Phone: 0410 724 227 | Email: media@arena.gov.au

Media release – AEMO and ARENA aiming to evolve traditional electricity market media release Final (PDF 164 KB)

When the wind changes

Can a wind farm provide important stability services for the Australian power system that are normally the domain of coal-fired or gas power stations? That is the question a new project funded by ARENA seeks to answer.

In an Australian first, ARENA and the Australian Energy Market Operator (AEMO) have signed an agreement with South Australia’s Hornsdale Stage 2 Wind Farm to trial whether a wind farm can provide Frequency Control Ancillary Services (FCAS).

ARENA CEO Ivor Frischknecht said the FCAS trial would test the National Electricity Market’s ability to fully integrate renewables into the electricity system, further assisting Australia’s transition towards renewable energy.

“This is an opportunity for us to enable wind and solar generators to fully participate in the NEM’s energy and FCAS markets by providing frequency control services in addition to generation,” Mr Frischknecht said.  

The trial will test if wind farms can provide important stability services in an Australian context. IMAGE: Charles Cook.

WHAT IS FCAS?

The power system requires that both generation and load are in balance in order to operate safely. If there is a variation in generation without a corresponding variation in load then the frequency of the power system will deviate, which can lead to instability or, at extreme levels, cascading failure and blackouts. FCAS is a process used by the energy market operator to maintain the frequency of the system within the normal operating band around 50 cycles per second.

Put simply, FCAS provides a fast injection of energy, or fast reduction of energy, to manage supply and demand.

Traditionally provided by generators such as coal and gas plants, these services are purchased by AEMO to maintain frequency and ensure the stability and reliability of the grid.

This project aims to shake that up, instead using wind power for the same purpose.

“The changing generation mix in the NEM is changing the way AEMO operates both the grid and market,” AEMO Chief Executive Audrey Zibelman said. “This trial will enable us to test new and emerging technologies that could supply services the market will need in future.”

Hornsdale Stage 2 is committing $300,000 to the FCAS trial. With that amount to be matched by ARENA, the total funding for the project is $600,000.

INTEGRATING RENEWABLES

French renewable energy company Neoen has developed Hornsdale Stage 2 in conjunction with international infrastructure investor, John Laing.

Neoen Australia’s Managing Director, Franck Woitiez said the partnership signalled the shift towards a more sustainable Australia focused on exploring future energy supply services.

“South Australia in particular is leading the charge to secure a more sustainable energy future so we’re proud to be working with ARENA and AEMO on this trial,” he said.

“This project will show the potential of renewable resources like solar and wind power to provide Australia with controllable, clean energy that can keep pace with future demand.”

PASS THE REMOTE CONTROL

The trial will also demonstrate the technical capability of Type 4 wind turbines to be remotely controlled by AEMO. This will allow AEMO an expanded toolkit to manage smaller deviations in frequency that occur on an ongoing basis.

“AEMO supports and encourages a framework for new technologies that ensures power system security yet continues to encourage competition. This trial is an essential step towards a more efficient and competitive FCAS market that ultimately benefits consumers,” said Ms Zibelman.

Following the successful completion of this capability demonstration, a market trial will run for a minimum of 48 hours to test the ability of HWF2 to fully participate in the NEM and NEM FCAS markets.

This market trial will allow AEMO to assess modifications that may be required to wind forecasting, bidding and energy management systems to support on-going provision of FCAS from wind and solar farms operating in the NEM.

If successful, the trial will provide a critical proof of concept to the market and investors on the ability of wind farms to provide FCAS.

“AEMO welcomes the opportunity to play a role in strategically integrating renewable generation into the National Electricity Market (NEM), to ensure a reliable, secure and resilient power system now, and into the future,” she said.

 

New Australian breakthrough

ARENA has announced $5 million in funding to help Brisbane-based tech company NOJA develop ‘smart switchgear’ technology for monitoring energy flow on electricity networks.

The breakthrough equipment promises to revolutionise how renewable energy feeds into the electricity grid, providing far greater stability and allowing more renewable energy to be used.

“This new Australian-led technology will not only create a new innovation we can export to the world but will also benefit our whole electricity system by giving us greater visibility over our distribution networks and allowing for more variable renewable energy,” ARENA Chief Executive Ivor Frischknecht said.

It’s an important announcement, and a piece of technology that should eventually lead to lower power prices for consumers. It will also allow Australia to lead the way in addressing one of the main handbrakes to feeding more renewable energy into existing networks.

NOJA Power’s smart switchgear kit. IMAGE: NOJA Power.

So what does it really mean?

 

BUILDING A BETTER X-RAY

It’s all about visibility. Energy operators currently record voltage and current as key inputs into power system monitoring.  The smart Switchgear aims to play an important role in this.

A switchgear is a type of complex circuit breaker positioned at key points of the overhead power network that protects the broader network against faults. When a fault occurs a heavy current often flows through equipment, threatening damage to parts of the system and disruption to users’ power supply. A switchgear acts to prevent damage by shutting down power at the site of the fault.

NOJA Power’s big breakthrough is that, once developed, the smart switchgear, would allow the capture of GPS time-aligned, voltage and current, and measure phase angles with extreme precision – commonly referred as synchrophasor measurements.

Phase angles measure the distance between different points on an electrical waveform difference. Importantly, increasing degree separation between relative phase angles can be used as a leading indicator for grid stress.

The synchronised nature of these measurements will allow grid operators to accurately see the condition of the grid in real time and compare and assess the impact of troublesome pockets on other areas on the grid.

Americans have been working hard to improve visibility since blackouts left most of the United States West Coast without power in 1996. NOJA Power’s switchgear offers a solution.

The synchrophasor technology the new switchgear will use can capture power system data up to 100 times more frequently than the conventional monitoring technologies we’re mostly operating in Australia right now (these are known as supervisory control and data acquisition or SCADA).

A report from the California Energy Commission likened the current technology used to monitor and operate the grid to driving a car at 100 kilometers per hour in fog while being able to open your eyes only once every 4 seconds. That means road hazards and safety information can easily be missed.

In contrast, new synchrophasor-based measurement systems make the fog vanish and allows you to open your eyes up to 30 times per second.

The North American SynchroPhasor Initiative compares the visibility improvement from SCADA to synchrophasors to reading an MRI rather than an x-ray. Simply put: you an get a much better picture of what is really going on.

A switchgear sits atop a power pole at key points on the electrical network. IMAGE: NOJA Power.

MORE VISIBILITY EQUALS GREATER STABILITY

Mapping the grid in detail with smart switchgear technology will dramatically increase the usefulness of post-blackout analysis and decrease how long it takes to work out what’s gone wrong when a fault occurs.

Because the smart switchgear can detect when phase angles are separating, it is able to give operators advanced warning when faults are about to happen and allow intervention to stop them. That should mean fewer outages for consumers. It is believed that the technology could have prevented the blackouts that affected large parts of North America in the 1990s.

Greater visibility of what is going on at different points in the network will allow both the Australian Energy Market Operator (AEMO) and network operators who deliver power to consumers the ability to better plan how they manage electrical networks and respond much more effectively when problems occur.

WHICH HELPS INCREASE UPTAKE OF RENEWABLE ENERGY

Being able to see in greater detail what electricity is doing across the network means wind and solar farms can increase supply. Distributors can accept more power because they can run renewable energy generating technology at higher capacity levels.

This helps to address one of the key challenges to renewable energy uptake. The intermittency of wind and solar makes the grid more complex and less predictable. As a result, many renewable energy sources have limits placed upon how much energy they are allowed to contribute to the grid.

Smart switchgear technology will go a long way in solving intermittency challenges because advanced monitoring facilitates increased efficiency. It’s expected that, as a result, limitations on the amount of renewable energy feeding into the grid should be reduced.

AND THAT SHOULD HELP BRING DOWN ENERGY PRICES

Increased efficiency, greater supply capacity, fewer faults, and dismantling the need to build new backup power plants all translates to lower energy prices.

A report by the California Energy Commission found that the fact synchrophasor technology allows power operators to run closer to their thermal limits without risking blackouts could save Californians up to a combined US$19 million a year in power bills.

Prices should also come down because more comprehensive data will help new wind and solar farms generate more energy on the network and in turn make them cheaper to finance and therefore easier to build.

Right now, connecting a new generator to the grid can be an expensive process. The smart switchgear should allow this to be standardised in a way that can save a renewable energy generator up to 75 per cent of the current cost.  That has the capacity to both reduce the cost passed on to consumers and also to improve the economic viability of renewable energy projects.

Once developed, smart switchgear will be installed at points where solar and wind farms feed into the grid. IMAGE: NOJA Power.

WHY IS ARENA INVESTING?

Smart switchgear kits will help us transition to a low carbon future where renewable energy meets our needs as a society. ARENA is charged with helping to catalyse Australia’s shift to that future state.

But this project also aligns with ARENA’s determination to accelerate the transition to renewables by sharing knowledge and bringing operators within the sector together to create better ways of doing things.

Smart switchgear devices are proven to be most effective if their data is shared freely. Americans have been using similar technology but in the US the data isn’t being shared across organisations in a way that will necessarily stop outages from spreading, as was the case in the 2011 San Diego blackout.

With the NOJA Power switchgear, captured data will be shared between ARENA, the Australian Energy Market Operator (AEMO), Deakin University and the University of Queensland as well as AusNet and Energy Queensland.

“This is a great example of government, industry and universities working together and collaborating to develop real solutions to tomorrow’s technical challenges on the distribution network,” says NOJA Power Group Managing Director Neil O’Sullivan.

Sharing the data widely also helps guard against commercial operators using it to  gain a competitive advantage. If the data is monopolised it could take longer for energy prices to fall. ARENA has a role to play in helping to ensure that information gathered from the grid remains free and available and works to the advantage of consumers.