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Why is outback Australia ignoring off-grid wind and solar?

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Sometimes you feel bad about shooting the messenger. It’s not good form. But reading a recent report from the Bureau of Resource Economics and Energy underlines a major part of the problem with energy policy and energy action in this country. And it’s all in the deliver of the message.

The particular message that BREE was delivering was the appallingly (my adjective) low rate of renewables penetration in remote and regional Australia – the areas of our sun-burnt and wind-blown country that really should be making a virtue of alternative energy sources.

According to BREE, about 6 per cent of Australia’s total electricity output is produced in areas off the main grids in the eastern states (the National electricity market, or NEM) and the south west corner of WA (SWIS).

But get this. Of the 15,812GWh sent out in these “off-grid locations,” just 2 per cent comes from renewables. Most of this renewable output comes from hydro and solar accounts for less than 0.1 per cent of the output. The big red bits in the table below represents diesel generation.

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According to BREE, there is just 3.4MW of solar in the two-thirds of the continent not covered by the main grids (in grey in map below). There is just 13MW of wind energy. Just over three quarters of off grid generation is for commercial or industrial use, just under a quarter for the 404,000 people who need power for residential use.

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BREE concludes that this may create significant opportunities” for renewables “in the future”. It notes that “some” solar PV and wind technologies may become cost competitive with fossil fuels by 2030.

Oh, for goodness sake. Many of these communities trucking in diesel fuel are paying well over $400/MWh for their electricity. In some extremely remote areas are paying $1,000/MWh, some energy types tell me.

Solar is probably somewhere between $150/MWh and $250/MWh, although the best rule of thumb in outback areas – where transport, concrete and labor costs, and the availability of electricians are at a premium – should probably be around $300/MWh.

So, why isn’t it being taken up? The answer is for the same reasons exemplified by BREE – there is such a level of ignorance and conservatism that many consumers and users are simply unaware of the options, and/or they don’t trust it.

That’s a shame, because as Hydro Tasmania’s demonstration project on King Island has demonstrated, it is probably easier to reduce the amount of fossil fuel generation (and costs) on a diesel plant than it is on the main grid.

The BREE report uses data from 2011/12. But there has not been much progress since then. As we noted earlier this month, Ergon Energy’s annual report for 2012/13 revealed that less than 0.1 per cent of the generation supplied for remote and off-grid areas in its geographical area (97 per cent of Queensland) came from renewables.

Indeed, less than 1 per cent of its main-grid supply came from its own renewable sources. That is despite the management indicating that solar and storage would likely offer a cheaper solution than being connected to the main grid within 10 years. The Queensland subsidises the cost of that grid by $600 million a year.

Even cold, cloudy Tasmania has more than 13 times the penetration rate for solar in off-grid locations than the sunnier northern mainland states.

Off-grid solar and renewables (be it solar thermal and storage, or even wind and diesel) is now considered one of the most interesting markets in Australia, mainly because of what seems to be the no brainer economics of the proposal.

But as any project developer will tell you, there are considerable barriers to entry, and it’s not just a matter of ignorance and trust.

One is the level of subsidy for fossil fuels. Diesel generators get a massive rebate which accounts for one third of their costs, and it is not entirely clear whether those benefiting from the subsidy are the suppliers or those paying for electricity.

Other barriers include laws such as the Pastoral Act, which until recently made it illegal for owners to be involved in biomass crops on grazing land. Then there is the cost of supplying, the transportation and the labor costs.

Finally, there is the question of finance and rates of return. Mines often have shorter life spans than a renewables installation. And off-grid renewables might offer generous rates of return, but in an industry which can get even higher rates of return by building a new conveyor belt, getting the attention fo centralised accounting people is tough.

This is one of the reasons why the Australian Renewable Energy Agency has made a big commitment to break down some of those barriers through its off-grid and remote energy programs.

It also believes that the economics of the technology are something of a no-brainer, and if it can lead the horses to water and show how it can be done, then the take-up could be rapid. After all, the commodities market is no longer so buoyant that mining groups should be happy to ignore power costs or fuel price risk.

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  • Giles

    Here’s a comment from Nigel Morris, who conceded defeat after a valiant battle with DisQus.

    “I agree with BREE’s findings that the opportunity is massive for Off Grid renewables.

    “But seriously; 3.4MW of Off Grid Solar? We can accurately account for more than 20MW of Off Grid Solar already installed (cumulative) and quite likely 20-30% more through historical data, which is corroborated by various other sources too.”

  • Fred Hooper

    Unfortunately, offgrid solar systems often get vandalised in the outback. Things are harsh out there, in more ways than one

    • Bob_Wallace

      Panels on people’s roofs get vandalized? That’s the only part that would be accessible short of breaking into their house.

      You have people driving to remote ranches and shooting holes in the roofs?

      • Fred Hooper

        No, I’ve heard of ground-mount systems that are installed to supplement diesel generation systems in outback communities. When the kids get bored of sniffing petrol, they take to the PV with rocks and cricket bats.

  • Alex

    I have talked to some folks in outback road stations about the economic benefits of solar over diesel, and they simply think it sounds “too good to be true”- the level of mistrust is so high that they would rather spend a huge proportion of their income on diesel and generator maintenance that this new-fangled technology, When diesel generator maintenance is factored in (especially given that the generators are often running with little load so they can run fridges during quiet times) and a generator breakdown means flying someone out and replacing frozen stocks- yes, it baffles me as well.

  • http://www.trongdong.weebly.com/ Nhan

    There is nothing strange , because it’s expensive and inefficient , I have a new method, http://www.trongdong.weebly.com

  • Pedro

    I have worked in remote outback NT putting in off grid systems and one of the major problems is that there is a lack of people with the expertise to install/maintain an off grid system, where as a broken down genset is pretty easily swapped out. People with off grid accreditation that are competent are rare.

    Otherwise its a no brainer and the Aboriginal communities with a bushlight system are generally pretty happy with not having the economic burden of fuel for gensets. In my couple of years outback I didn’t come across a community system that was vandalized. But there were issues of theft of panels from unattended island off grid systems which I suspect were stolen by fishing tourists.

    • Bob_Wallace

      Anyone successfully living in a remote location should have the skills to hook up a solar system. This is not rocket science.

      And maintenance is nothing more than pushing the equalize button once a month and checking battery water level. Over 20 years off the grid and I’ve had to do one simple repair. Change out a blown shunt which took only a few minutes, about as difficult as changing a fuse.

      What do these people do if when their diesel generators need their oil changed or repaired?

      Sounds to me that an education program is needed. Someone who knows how to talk to these folks needs to start a little newsletter/whatever. Show them some systems that are working and lay out the math for them.

      • Pedro

        Thanks Bob for your comment and I agree that a basic system is pretty easy to maintain with a little training. We normally take our level of education for granted and the major problem I faced was the very low level of literacy and numeracy. Programming an inverter or charge controller is beyond any body who has problems with reading the manual for a start or lacking basic math skills. The ability to use and understand multimeter readings is key to fault finding and maintenance for an off grid system.

        On the other hand people that live in remote outback locations tend to be pretty handy around engines and pumps, so getting an engine fixed is just a matter of spare parts. Probably the big reason every 2nd 4WD is a landcruiser.

        • Bob_Wallace

          I guess I don’t understand who lives in your outback. I imagine people living on very large ranches. And folks who don’t like city life and have escaped to find some privacy. I can imagine that some of those folks might be illiterate, but living on ones own in a lifestyle that is much more than a tent and heating canned beans over a fire requires a certain amount of cleverness and problem solving skills.

          I do agree that the manuals can be difficult to read. I’ve got multiple graduate degrees and I have to work at understanding inverter instructions. Those pamphlets are not written in English, they’re written in Engineer-ese.

          Perhaps a way to get higher acceptance would be to create easier to access instruction manuals. Fewer words, step by step instructions. Separate manuals for different voltage systems. No math, pre-do the math.

          Put stuff on a DVD, I would imagine most of these folks have the ability to watch movies. Set up on line help forums (internet access out there? Back there?).

          Set up workshops in the local shopping towns. Set up demonstration projects where locals can show up and help install a basic system.

          Put a demonstration system on a trailer and drag it around the country. Show up with the parts disconnected and hook it up while people watch.

          The idea of living with a generator rumbling along all day long, well, that’s just wrong. Start people out with a battery system to store the power from their generator in order to cut down on the hours it runs per day. Clearly most of them understand engines, alternators and battery charging. That’s part of their present life. The only thing new would be the inverter. Then add the solar panels later once they’ve settled in to using a battery bank as opposed to an “always on” generator.

          • Pedro

            Hi Bob
            There has been some excellent work done in the Northern Territory Australia through bushlight to educate Aboriginal people on remote communities with the use of an RE system, using most of the methods you suggested. Those communities that were “Bushlighted” loved their solar power systems and are strong advocates. The systems that I was involved with installing were government funded.

            I am not sure if you are from Australia, but if you are not, there are quite a few remote aboriginal communities with some appalling social problems, grinding poverty, huge unemployment, poor health, poor education and very low levels of literacy. So there are a few challenges with putting in a system that is more complex than a genset.

          • Bob_Wallace

            Are you familiar with the micro-solar projects going on in several parts of the world? Bangladesh has been particularly successful with several hundred thousand systems installed.

            http://cleantechnica.com/2011/11/17/world-bank-bringing-solar-power-to-over-1-million-homes-shops-in-rural-bangladesh/

            Sounds like you need a larger version. Make everything fixed sizes, nothing to adjust. Supply a battery charger that they could plug into the genset if they run out of stored solar.

          • Pedro

            A little familiar. Rainbow Power Co when I worked for them developed a micro solar power system to run LED lights for under $200, that was 10 years ago. The product was intended for 3rd world customers. It was pretty simple and fool proof. The NT off grid systems are all designed to run normal household loads and protect the expensive battery bank.

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  • Crno Srce

    Just pointing out an inconsistency – you say the large red bits of the graph are diesel, but according to the legend they’re natural gas and they represent the vast majority of energy sources outside of “Other NT”. Surely the majority of energy in remote locations is going to industrial uses, mainly mining. I’m guessing they’ve picked the cheapest option for high levels of 24/7 energy.