Daintree power supply saga drags on as new report casts doubt over micro-grid plans

Federal government-backed plans to power Queensland’s World Heritage-listed Daintree region with solar to hydrogen gas-based microgrids have been cast into doubt, after a new report revealed such a solution to be exorbitantly expensive and not the best offering for the remote rainforest area.

The Queensland government report, prepared by KPMG, says that currently proposed renewable microgrid options presented “numerous technical and commercial risks,” and were basically financially unviable without significant upfront and ongoing government support.

In dollar terms, KPMG puts the annual cost of currently proposed microgrid solutions somewhere between $11,000 and $15,000 more per residential customer – or a subsidy of between $70-$150 million – to preserve current consumer electricity costs.

And it recommends, instead, the gradual enhancement and replacement of stand-alone solar power-based solutions, as emerging technologies like green hydrogen and battery storage continue to improve and become more readily accessible.

As well as being cheaper, the report finds that this approach would also have a lower environmental and cultural heritage impact and be more reliable.

It is a conclusion that – rather ironically – delivers a blow to one of the Morrison government’s few open endorsements of 100 per cent renewable energy solutions.

The Daintree project has been a pet project of the Coalition government since back when Josh Frydenberg was energy minister, during which time an ARENA-backed analysis from Sunverge examined five options for electricity supply.

These included single and multiple electrical micro-grids with high renewables uptake and a hydrogen micro grid with renewables and bio methane.

And in March this year, current energy minister (an no fan of renewables) Angus Taylor singled out the Daintree project as one which the government hoped would be boosted to “shovel-ready” status through its $50.4 million renewable micro-grids fund.

Federal member for Leichardt, Warren Entsch, quickly described news of the fund as “absolutely fantastic” for the prospects of the 100 per cent renewables Daintree project, which he said he “had no doubt” would get the green light.

But it was never going to be that easy – efforts to address the Daintree community’s power problems has been a work in progress for decades now, as we reported here.

The rainforest-based community is cut off from the Ergon network, and with solar considered not an option for many due to shading from the shading, residents and businesses have been reliant on inefficient, costly and high polluting diesel fuel generators coupled with battery storage – usually lead-acid.

A campaign led by the Daintree Rainforest Power Committee has – for around 30 years now – sought an alternative to that status-quo, and in 2017, ARENA commissioned a report to identify a range of options, including analysis of current state technologies (traditional and renewable) and analysis of system and energy load data.

According to Volt Advisory Services Richard Schoenemann – who worked on the ARENA project alongside the Daintree Power Committee and Phillip Koeghan from Sunverge – it was decided after “extensive analysis” that a full community “power to gas” microgrid was the best option.

As Schoenemann told One Step in April, this was because it was found to have a better cost per unit of energy than the other options assessed, was optional for residents to connect, but did not exclude any residents, while offering those who wanted it a reliable supply and freedom from the responsibility of managing their power supply.

The proposal was also favoured for its capped tariff arrangements, similar to those enjoyed by others in the state, including the potential to feed in their own solar to the community grid.

The environmental impact of the project was also considered to be a benefit, with cabling proposed to go under existing infrastructure so that it did not require the disturbance of any of the world heritage listed rainforest

But not everyone agreed, including a core group of locals called the Douglas Shire Sustainability Group (DSSG) which told local press it remained “deeply concerned” that the push for reticulated power north of the Daintree, would cause long term damage to the environment and tourism.

This same group has now welcomed the new findings of the KPMG report, with president Didge McDonald saying it gives all parties a much clearer picture of the practical issues and costs involved of the various power options for the Daintree.

McDonald also said that DSSG would be putting the case for further options, including separate microgrids for the region’s two main commercial centres.

“We will be meeting with the government and will be discussing with them assessment of the option of a small microgrid at Cape Tribulation, where there is a concentration of businesses in close proximity and where environmental and cultural values are not threatened, along with a small microgrid at the Cow Bay commercial centre,” he said.

“The outcomes of this study clearly demonstrate that the solutions to the issue of power for the Daintree put forward by DSSG and others, with the environment as a central issue, have been based on practical considerations,” he said.

“Fundamental to any solution is to justify a subsidy in return for a demonstrated environmental benefit, such as a conservation covenant.”

McDonald said he also hoped that the results of the KPMG report would help mend the rift that had divided the community over power solutions.

“Much of the public discussion around this issue in recent times has been marred by misinformation, personal attacks and divisiveness,” he said.

“Now that the community has solid data to consider, we expect that a more civilised debate will take place, and we can get on with achieving better power outcomes for the Daintree.”

As we noted here, many long-term residents of the rainforest, like one-time One Step Off The Grid contributor Dr Hugh Spencer, have argued passionately in favour of households staying power independent, using modern distributed solar and battery storage technology.

In his article, detailing his own experience of living off-grid in the Daintree, Spencer said that a large percentage of Daintree residents had put off-grid renewable energy power systems (RAPS) in the “too hard basket.”

This distrust of solar, he said, was partly a hangover from the mid-90’s Daintree Rescue Package, which installed subsidised solar and battery systems at a time when knowledge of solar – and especially of the local climatic and environmental impact on it – was in its infancy.

As Spencer pointed out, a lot has changed since then, and – he claims – a well designed solar RAPS in the Daintree can supply most households’ needs easily, even in the wet.

And the KPMG report complements this view, noting that relative to a microgrid, stand-alone power system based solutions “better preserve the existing natural and cultural heritage values of the Daintree,” as well as costing far less than the microgrid solutions – between $700-$6,000 a year per residential customer compared to current supply arrangements.

And while the report concedes that there are “limited short-term solutions to materially improve existing arrangements,” opportunities exist for incremental enhancements (e.g. battery upgrade program) while other potential longer-term solutions are investigated and potentially relevant technologies mature (e.g. hydrogen based SPS, displacing diesel).

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