Is this a sign of the future? Of a new business model for utilities? Victorian network operator Powercor has signed a landmark agreement with a community group in the regional town of Newstead to support its transition to 100 per cent renewable, locally generated energy.
The Memorandum of Understanding is the first major step for Renewable Newstead towards realising its plan of making the 500-person town 100 per cent renewable by 2021 – and potentially being the first in the state to do so – via a purpose built community-scale grid.
It comes one year after the Andrews Labor government announced a $200,000 grant to kick-start the Newstead eco-power project, part of the its policy to encourage renewable energy development and storage in the state.
Interestingly, the funding was conditional to a series of milestones, including the creation of a partnership with the local network service provider – Powercor.
The resulting MOU, which was brokered by Energy for the People, was based on the potential for a mutually beneficial commercial model, which could align Powercor’s interests with the community of Newstead.
Energy for the People specialises in helping communities explore what their energy future might look like. Currently, it is working with the community of Tyalgum in NSW, which is looking to go off the grid; and a niche development of 80 homes and a commercial precinct in Bendigo, looking to be off-grid from day one.
As Energy for the People director Tosh Szatow wrote on RenewEconomy last year, more and more Australian communities are looking to the benefits of renewable mini-grids. Whether these are grid-connected or not, he says, is not the issue. “What matters most is how the network companies respond.”
As a electricity networks go, Powercor appears to be making a decent effort to stay in touch with consumers and abreast of the changing energy landscape.
It is experimenting with grid-connected battery storage, with the planned installation of one of Australia’s largest battery storage systems in Buninyong, south of Ballarat, set for the first half of this year.
The 2MWh lithium-ion battery – made by South Korean manufacturer Kokam – will be housed in 40 foot shipping container and, Powercor says, will be capable of providing approximately 3,000 customers with an hour of back-up power during an electricity outage.
For Powercor, the Buninyong project is primarily about assessing the role of batteries on its network and, in some cases, deferring the need for costly grid upgrades.
Powercor has also been working with RES, building the owner-operation connection asset for the 40MW Ararat wind farm – the final contracts for which were announced in 2015, within day of the reduced renewable energy target bill passing the Senate.
It also has between 200-300kW of solar panels on its depots.
The Newstead project, meanwhile, will provide the network operator an opportunity to conduct invaluable research into the future of the electricity grid.
“Renewable generation is now a reality of our energy generation mix, with solar, wind power and energy storage increasingly being integrated into electricity networks,” said Glen Thomson, Powercor’s general manager of energy solutions.
“This project is a good example of how distribution businesses can work alongside our customers, the community and the government to facilitate changing energy choices.
“We are committed to building a network for the future, one which incorporates technologies that enable more efficient capital investment, improved safety and reliability, and widespread integration of renewable energy sources,” he said.
According to the MOU with Newstead, Powercor will support the town by providing industry know-how on such matters as the energy load profile, grid stability and reliability, financial modelling, and other technical advice.
According to Energy for the People, the stated project goals – in broad terms – are to achieve lower prices for electricity without compromising grid reliability or safety; to achieve (other) tangible community benefits; and, of course, to develop a 100 per cent renewable energy supply to Newstead.
Energy for the People also emphasised the importance in this project of sharing data; of ensuring all regulatory and technical constraints were being managed; and engaging regulatory authorities as required.
The particular focus, it said, was on defining a commercial model for energy supply, in principle, which had the support of Powercor, Newstead and the regulators.
“Unfortunately, you can’t usefully assess the costs and benefits of transitioning to zero emissions, before having a partnership agreement with the local network company,” Energy for the People explains.
“The economics of energy absolutely depend on the cost of network services,” it says.
“As far as Energy for the People is aware,” the company said, “there is not a commercial model (either being trialled, or in existence) that could deliver the shared goals of Powercor and Newstead.”