Australia’s energy future could be network of renewable micro-grids

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micro-grids are an obvious solution to Australia’s soaring electricity costs, where the network has to cover huge areas, at the cost of massive cross-subsidies that support it. They will be used to take whole towns off grid, but most will be linked so that they can trade.

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Australia’s energy markets are on the cusp of rapid change, but it is not just the prospect of individuals quitting the grid that represents the biggest challenge to industry incumbents: it’s the possible defection of whole towns and communities.

The creation of micro-grids is seen by many leading players as an obvious solution to Australia’s soaring electricity costs, where the grid has to cover huge areas, at the cost of massive cross-subsidies that support it.

The major network operators in Queensland, NSWSouth Australia and Western Australia see micro-grids as an obvious solution to the challenge and cost of stringing networks out, sometimes more than 1,000km away from the source of generation.

In Western Australia and Queensland, these subsidies amount to more than $500 a household. The cost of service to regional consumers in Queensland is far above the cost of service to those in the south-east corner.

To address this, these states are proposing to take some small communities, and towns like Ravensthorpe in Western Australia off the grid. In New South Wales, some towns are taking the initiative themselves.

In northern rivers region, the township of Tyalgum revealed it is considering a micro-grid that would allow it to largely, or entirely, look after its own energy needs.

Indeed, the whole Byron shire is considering micro-grids as part of its efforts to become “zero net emissions” within the next decade, and to source 100 per cent of its electricity needs from renewables.

But micro-grids are not just about grid defection. While it will make sense for those towns and communities at the edge of the network to become self-sufficient and disconnect entirely, most  micro-grids will remain connected to the network, helping to reshape a centralised grid to one focused on more efficient decentralised renewable power generation sources and storage.

Warner Priest, the head of emerging technologies at the Australian offices of German energy giant Siemens, says  micro-grids are the innovative solution to our future smart grid needs.

In fact, he notes, they were the original model for shared generation, but like electric vehicles they were swept aside by the push to big, centralized, fossil fuel generation, transmission and distribution.

Now, through massive improvements in technology, it is becoming easier for remote and off-grid communities to look after their own energy needs without relying heavily on costly, imported energy derived from centralised fossil fuel sources.

New sub-divisions may find it more cost-effective to never connect to the grid, and  micro-grids could also be useful within major cities, addressing areas where the network is constrained by inadequate or end-of-life network assets.

And within five to seven years, Priest says, these  micro-grids could be completely renewable as new technologies such as on-site renewable hydrogen production become mainstream, replacing the non-renewable gas and diesel generation that is used as a micro-grid’s energy generation for when renewable energy sources are not available.

Siemens Australia is drawing up plans for one 50MW micro-grid in Australia that would – ultimately – include up to 10,000 homes.

It would comprise of some 40MW of rooftop solar (around ~4kW per home), an array of, centralised and decentralised battery storage, fossil fuelled gas generators, which could – within a few years – be replaced by renewable gas fuel such as hydrogen.

The attraction comes through cost, resilience, reliability and efficiency. Fossil fuels burned at the point of consumption are two to three times more efficient than those burned at centralised power stations. That means more energy is harnessed from the equivalent fossil fuel, with ~50 per cent of that energy being in the form of thermal energy that is used for both heating and/or cooling.

Priest says micro-grids are about integrating and balancing multiple loads and distributed generation resources within a smart micro distribution grid, using powerful software SCADA control systems (microgrid management systems), residential solar, wind energy, battery storage and other types of renewables and storage – such as hot water systems – ensuring that the use of fossil fuel gas and diesel is kept to a minimum.

siemens micrgrids

These  micro-grids micro-grids currently run with the support of fossil fuels, but they will move to renewable fuels with the introduction of new technologies such as on-site production of renewable hydrogen using PEM electrolyzer technology. And, of course, battery storage.

“Within the next five to seven years, these  micro-grids could be completely renewable,” Priest says. “That is not far away. The innovation and change is moving at a phenomenal pace. It is very exciting.”

Priest says the idea of  micro-grids is not about displacing traditional distribution and transmission networks; it’s about encompassing these new energy cells as distributed energy sources into the incumbent networks, with the ability to wheel power to remote energy consumers connected to the existing grid.

Some  micro-grids will remain islanded from the main utility grid, but most will retain some form of connection to allow bi-directional flows of energy – this for when the  micro-grids draw on cheap energy, or for when they provide support to the existing distribution grid.

“With DC coupled  micro-grids, they would look like large 50MW batteries to the utility distribution grid,” Priest says. That means they will have a dual role of being be able to participate in the wholesale energy market, selling energy to the networks when optimal, and within the microgrid, retail energy to its consumers, topping up their own requirements from the utility distribution grid when wholesale energy is cheap.

Priest says that new housing developments are one of the best opportunities for the viable deployment of self reliant innovative autonomous energy cells or smart grids of the 21st Century.

“The more solar and wind (arrays) that we put in, the more energy we produce. And with storage prices coming down, there will be more capacity to store it and use it to do time shifting to meet peak demand. And they will help the move completely away from fossil fuels.

“Australia has got some of the best renewable resources in the world,” Priest says, and with a small population of only 23 million people, and vast areas of space to deploy renewable generation resources, Australia is well positioned to take advantage of a carbon neutral future, or even export some of its renewable energy resources to other energy hungry countries.


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  1. Chris Fraser 3 years ago

    Network providers have seen the economy of not extending the central grid to remote areas consuming energy. This is an evolutionary step and well done.To be fair, urban people want access to the same market, though. If i use centralised energy generated 1000 km away, perhaps i should pay for more use of the grid during that consumption. However if i use PV energy from the nice family next door, then i pay nothing for use of the grid. Is that a deal ?

    • MaxG 3 years ago

      You wish 🙂
      Corporations want to milk the cow until its dead, and not change before that. If they change before, the new thing has to be more attractive (as in generating more profit). I bet my life on it, that whatever will happen in the future energy market, the consumer will not be better off, unless, and listen to this, the ‘system’ is publicised or democratised. Is this not what we had before? It was working. It was cheap. But only privatisation destroyed that model and ensured profits for the corporations.

      • Chris Fraser 3 years ago

        The privatisation of the system should have been the trigger for more democratisation. That is, the government earned its money from the lease, no longer took an interest in recovering a set income, and is now free to enact democratic legislation.But now we find it’s a network buyers market. Enter the cryers and rentseekers, who won’t settle until conditions are right for their ‘business model’.

        • MaxG 3 years ago

          The government is not done with it; it it a major revenue stream.

    • MaxG 3 years ago

      Also, you’re forgetting that the state forces prices to be unanimous, not disadvantaging the country — which is a good thing, and something I fully support.

      • Chris Fraser 3 years ago

        If you mean pricing should not disadvantage set groups of consumers then yes absolutely. Though we should apply a test to remote communities who go it alone. Their network costs could drop, their energy becomes cheaper. They could actually create a system of advantage. Us grid-connected folk should let them enjoy it.

  2. Ian 3 years ago

    The use of microgrids in rural and remote areas using solar plus battery storage is apparently cost effective at this present time. These should be subsidised and heavily promoted by all stakeholders. 1 it makes financial sense to the networks. 2. It provides energy security to remote settlements 3. It is the low hanging fruit in terms of battery adoption. For the more remote settlements the networks can have no excuse not to adopt this technology. In the past people concentrated in the urban areas would have been willing and content to cross subsidise rural electricity networks. Now there is no excuse for such cross subsidisation. Use cost-effective solar and storage. Is this not the sharp and pointy end of a very large spearhead driving a renewables wedge into the networks? No,no not at all it’s just makes good financial sense.

    • Reality Bites 3 years ago

      Yes it makes financial sense to the existing networks, but does it make financial sense to the communities? I think you will find that the micro networks will have lower standards and will save money on maintenance, which is probably all ok initially, as it will work, however longer term could be a sleeping problem. They will also lose energy security and who will actually maintain the network? If it fails at 1.00am, will the Micro-Grid service team drive out and fix it or will the town wait until working hours the next day? Will each micro-grid maintain crews or rely on a regional service provider? How much will that cost? All well and good to say this will work but where is the finer detail on the logistics? This is also new technology that will have risks. Towns might jump into this, however who advises them on what they need and who makes the decisions? The mayor? A committee? What if you don’t want to participate, is it like a socialist takeover and the majority rule? What about life support requirements and would hospitals and other essential services then require mandatory backup systems? If Micro-Grids they stay connected to the grid as backup, what will the cost of that be? How much demand should be catered for? The great opportunity here would be for consultants!

      • Ian 3 years ago

        You are quite right, the devil is in the details, and obviously careful due diligence is required but the concept is clear. Long supply lines are expensive and require maintenance. The design of these tenuous lines has to be for peak demand and far heavier duty than trickle feed with storage at the remote site or stand alone localised generation of power using solar and battery storage with FF back-up. Most remote communities are already connected to the grid so the localised generation and storage option would obviously be the choice if maintenance or energy security of the already existing and legacy poles and wires became less economically viable. Interestingly a town like Roma is as remote as one can get but a peaker gas turbine generator is located there, how ironic is that! The city is the remote area and the country town is the centre of large scale power generation. Ideally generation and storage of power should be close to consumption. The Wivenhoe pumped storage scheme is just outside Brisbane and has a (re)generation capacity of 500MW for 10 hours, that’s 5000MWH of storage, enough to provide 1 million homes with 5KWH of overnight storage. The crows nest header dam is only 105 hectares in area. This is the ideal asset for Brisbane to embark on solar plus storage type power generation.

        The original design of long distance power transmission to remote areas was born out of necessity because there was no adequate distributed generation technology, but times they are a-changing, solar plus batteries with generator back-up is very reliable and feasible. Most hospitals, rural or otherwise already have back-up generators for just such a network outage that you are so concerned about.

        Interesting the socio-political ramifications of mini grids, but I’ll leave that one to your superior knowledge. I would have thought more choice and input from people in the community would be better than dogmatic rule by a distant, disinterested and profit-driven organisation, but then again, maybe not.

  3. plainview2 3 years ago

    Until the consumer is fully vested in energy production; until the average consumer can realize the avoided costs of central production and T&D; until energy production benefits society rather than a small elite; we will not fully realize the technical advancement for the benefit of the majority.
    Micro grids are obviously a more efficient production and transmission methodology.
    The majority are the main investors in this entire net metering issue.
    Some one has to stand up and allow the average consumer to benefit rather than a wealthy minority.
    Solar and wind are a societal resource.

    • MaxG 3 years ago

      Very true, and I agree with your stance. The question though: how do we realise this dream?

  4. Marco 3 years ago

    Interesting piece.
    “In Western Australia and Queensland, these subsidies amount to more than $500 a household.” Quick question: Per year?

    • Mike Dill 3 years ago

      Yes. per household per year, primarily for pole and line maintenance and line losses.

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