Lismore pushes new business models in pursuit of 100% renewables

The Lismore City Council is looking to a range of innovative measures – including community funding for a large scale solar project, a type of consumer retailing model, and an ambitious energy efficiency program as part of its plan to go 100 per cent renewable by 2023.

As we reported last week, Lismore – in the northern rivers region of NSW – is looking to wean itself entirely off fossil fuel energy within a decade, and thinking differently about energy use is one of the keys to achieving that goal.

On top of that list, says major Jenny Dowell, is an aggressive approach to energy efficiency – the city’s consultants have suggested that the council could reduce its consumption by 30 per cent over the next 10 years.

This would reduce the amount of energy consumed each year from more than 8,000MWh to around 5,400MWh. (as the graph below shows)

“That means a lot less money that needs to be spent on new generation. That’s a bit of a no-brainer,” says Sharyn Hunnisett, the environmental strategies officer at Lismore.

The second big idea is community ownership. For the last 15 months, Lismore has been working on a project known as “Farming the Sun” with Starfish Initiatives and Embark, which has been working on a large, community-owned solar PV project with Lend Lease and the Darling Harbour redevelopment.

The size and structure of this community project could depend on the outcome of the review into the renewable energy target, and whether the RET is repealed, reduced, and what happens to the small scale component.

However, one innovation is that it will be a “debt-funded” model rather than based around a power purchase agreement. Capital is raised from the community, but rather than sell electricity to the council based on a power purchase agreement, the community will then “transfer” ownership to the council in the form of a loan, and then get money back via interest repayments.

Hunnisett says the advantage to the council is that it gets solar electricity for around the same cost as coal power, and the community gets better than bank interest return. And everyone benefits from clean energy.

The third innovative idea to be adopted by Lismore is that of a type of community retail model. This, perhaps, could be the most innovative.

The problem the council is seeking to address is net metering, and the fact that electricity exported back to the grid attracts a pittance of a payment. The challenge is to find a structure that enables more than one building to share the output of a solar array, and to share the credits.

This is important for improving the returns on solar – if the output is simply marked as “returned to grid” then the credit might not be greater than the current derisory offer of 6c from the utilities.

By “sharing” the output, the credit is the form of a more lucrative “avoided consumption”. So it is more effective in reducing bills, but it needs regulatory changes, as the City of Sydney Council has found as it seeks to build a network of co-generation that would help it meet its own renewable energy target by 2030.

One option being considered by the neighbouring Byron Bay council is that of “virtual net metering”, which aggregates and shares the output of a number of installations. Lismore is looking at another option, which its advisor, Sustainable Business Consulting, describes as the “community retailer approach” and may fit the needs of large scale solar rather than aggregating household installations.

Under this design, Lismore would effectively become a retailer, negotiating access fee with distributor Essential Energy and deliver renewable electricity to customers at a competitive price. But, nots SBC’s Barbara Albert, there are still major regulatory barriers to overcome.

Hunnisett says the council plans to move quickly on the community-funded solar installation, and hopes to become the first in Australia to host a large scale (more than 100kW) solar array that is community owned.

It may also prove to be a model that could serve as a capital raising exercise for other projects, including energy efficiency.

The community project could be around 250kW, or even as much as 400kW. Adam Blakester, from Starfish, says the city’s sewage facility and its aquatic centre could host an installation of up to 400kW, and consume the output.

The loan-funded model would likely deliver interest on the loan of around 7 per cent – slightly better than the average cost of capial, and a return of investment of better than 5 per cent. “Lismore could have the first community solar farm up and running in Australia, and  that would be fantastic,” he said>

There are a whole bunch of other options presented to council by Sustainable Business Consulting. The council will probably need a total of 4MW to 5MW of its own generation capacity to meet local demand. The other options include large ground-mounted solar PV farm, concentrated solar thermal, micro hydro, biogas, and landfill gas. All would be assessed in coming years,

Mayor Dowell said it was an ambitious target, but one that the community supported. The goal was developed as part of consultations for its Imagine Lismore program. “It’s a big, hairy, audacious goal,” Dowell said. But it would still form part of the performance assessment of the council’s general manager.

This article was originally published on RenewEconomy.