How Local governments are taking the initiative with renewable energy projects and using Australian first technologies.
The Australian energy sector, especially on the east coast, is in a fragile state.
That’s according to the Productivity Commission’s 2017 Five Year Productivity Review. It found the sector has undergone radical change through the past decade, with technology altering its economics and structure, particularly when it comes to electricity.
A lack of stability and uncertainty in climate change policy is creating an uncertain environment for investment, according to the report. It adds that these factors have resulted in insufficient investment in new generating capacity to replace ageing generation assets.
To solve the issues facing the energy market, the report says Australian governments must work cooperatively and set a clear and considered long-term strategic vision for energy markets.
For some local governments, sustainability is key for their region’s strategic visions.
In 2012, Lismore City Council underwent one of its largest ever community consultation processes to inform its strategic 10-year plan. The council asked its community to imagine what they would like Lismore to be in the future.
One of the key points identified by the community was sustainability, which is why the council set a target to self-generate all its electricity from renewable sources by 2023.
Sharyn Hunnisett, Lismore City Council Environmental Strategies Officer, says it was an ambitious goal at the time, but they were dedicated to achieving it.
“We looked at research for what renewable technology the council should go with based on the geography of the Northern Rivers. Wind wasn’t considered appropriate, as the municipality doesn’t get enough wind, and our sewage treatment plant doesn’t generate enough gases to capture for biogas,” she explains.
“Solar power was considered the most cost-efficient renewable energy source and could be installed on the rooftops and landscapes of a number of council assets and sites.”
To fund two solar plants, the council developed a business model that was based on investors from the community. Effectively, the council would loan the money from community members that wanted to financially support the project who would then be repaid with interest for a rate of return.
The council was happy to pay a premium to ensure the local community would receive the financial benefits instead of a big bank.
However, federal political uncertainty at the time meant the council could not build plants at the scale it wanted and needed to reduce the size to fit into the small scale renewable energy scheme to ensure investment certainty.
Ms. Hunnisett says the smaller project reduced the investment value of the farms, with additional asset requirements limiting the council to only 20 shareholders per site.
“We had hoped to be able to have hundreds of people funding the sites through smaller investments, but the restriction meant that each share value was around $9000. This was a real risk, but we knew we had a lot of interest from a very engaged community,” she says.
“When we released the share offer we managed to fulfil it in just one week. The community really wanted to back sustainable energy options. I think the confidence in a community model and technology helped take away some of the uncertainty and helped people really get on board.”
The East Lismore Sewage Treatment Plant and the aquatic centre were chosen to be the sites of the new farms. The sewage plant is operated seven days a week and is close to a community education centre, but the council required an innovative solution to install the solar plants.
Nine locations had been scouted but no conventional location would have fit the solar plant.
That’s when the council noted the large body of water that was on the site that could be used to house the solar farm.
The technology for a floating solar farm hadn’t seen much use in Australia before, Ms. Hunnisett says, but it had been used extensively overseas in the agricultural industry.
“The council decided that it would bring this technology to Australia to help make Lismore a nationally and internationally recognised centre for sustainable living,” she says.
“We have the capacity to expand our solar farm across the overflow ponds and have the eventual goal to power the sewerage treatment plant entirely from solar energy.”
The solar farm now provides 12 per cent of the sewage treatment plant’s energy requirements and has reduced the electricity cost from $1.6 million in 2013 to around $1.1 million.
Lismore City Council’s renewable energy initiatives has helped it move closer to its 10-year goal, growing from one per cent of its target in 2014 to around 15 per cent in 2018.
Sunshine Coast Council’s vision is to become Australia’s most sustainable region. To do so, it built a $50 million solar farm to become the first council in Australia to entirely offset its electricity consumption throughout all its facilities and operations.
This is thanks to the energy generated from the 15-megawatt Sunshine Coast Solar Farm, which is estimated to provide the council $22 million in savings (after costs) over a 30-year period based on the current cost of electricity.
Located in Valdora, Queensland, the plant is connected to electricity distribution company Energex’s 33-kilovolt grid in South-East Queensland. It is currently the largest solar farm built in the region and has won multiple awards.
Simon Crock, Sunshine Coast Council Coordinator Commercial Analysis, says over the past decade a consistent rise in the price of electricity and heightened volatility in the wholesale electricity market placed an increasingly uncertain financial burden on the council.
“As part of its ongoing operations for the 2017 financial year – before the solar farm was generating – the council used 32 gigawatt hours of electricity at a total cost of approximately $9.528 million,” he explains.
“Under a business-as-usual scenario, the business case estimated that over the next 30 years council would spend over $319 million in electricity in today’s terms.
“As electricity is a necessity for council, the associated cost, irrespective of its source, cannot be avoided. Any scope to lower cost is naturally financially attractive to council and vicariously beneficial to our regional ratepayers.”
A global market oversupply of solar panels has also led to a reduction in price, which allowed the council to purchase them at historically low prices and drop the up-front capital investment requirements.
There was no guarantee that panel prices would remain at the current low levels, especially if supply adjusted, and the council was able to benefit from the first mover advantage bringing exposure to the region.
On top of this, the project also created the potential to provide a foundation for future investment into the domestic clean technology industry.
Mr. Crock says the solar farm has put the region in the spotlight for academic research, industry and other local governments.
“Since opening, there has been a substantial amount of interest from residents and businesses in addition to eight schools, five universities and 35 Australian local governments and other government agencies wanting to find out information about the project,” he says.
“One local government in New South Wales was granted access to tender and contract documentation which has accelerated their development of a five-megawatt facility.
“By taking a leadership role in the implementation of solar, the council has an opportunity to drive improved education and awareness regarding a more responsible attitude towards energy usage and generation.”