Community energy retailer to take on Australia’s big three

Plans to create Australia’s first community-owned power retailer are underway, in what could be the first attempt to challenge the dominance of the incumbent retailers with a completely new concept in energy delivery.

The proposal, by a consortium of not-for profit and commercial organisations, would result in the creation of a new sort of entity that would buy, as well as generate, its own renewable energy and sell it back to the community.

“Setting up a community-owned retailer is an option for people to keep it local – to buy renewable energy and keep it local,” said project coordinator Mark Byrne, from Total Environment Centre, a member of the Northern Rivers consortium.

The consortium – which includes Total Environment Centre, Southern Cross University, Starfish Initiatives, Sustain Energy, NSW Trade and Investment, Office of Environment and Heritage and the North Coast Energy Forum – revealed on Friday that it had secured “modest” funding for preparation of the business plan, which would be accompanied by an application to the regulator for a retail licence, with the expectation that a community-owned retailer could be up and running within 12 months.

The group says successful examples of this are common overseas, but the model is not yet tested in Australia.

So will it work in Australia? According to Byrne, the timing is right to give it a go.

“We’re trying to connect what’s happening on an individual household level and the strong regional sense of environmental responsibility,” Byrne told RenewEcnonomy in an interview on Friday.

“There’s also a growing mistrust of the centralised energy model,” Byrne added, “so we’re trying to tap into that.”

Byrne, who has witnessed a growing regional interest in energy independence and sustainability through the North Coast Energy Forums he helps to coordinate every year – this year’s will be hosted by Bogangar in October – says it is not lost on the local population that 90 per cent of their energy supplies come from outside the region, and 85 per cent from fossil fuels.

“This is a problematic area in that it’s not really suitable for large-scale wind or solar,” Byrne said. Instead, the focus has been on small-scale distributed sources, such as rooftop solar – the region has one of Australia’s highest penetration rates for PV – and bioenergy, Northern Rivers being a rich farming district.

The project’s timing coincides with a growing push towards community energy ownership and independence, particularly in regional Australia, such as the Northern Rivers affiliated Lismore City Council’s plan to go 100 per cent renewable by 2023; and the development of Australia’s largest community-owned commercial solar system in Shoalhaven, announced this week.

And it’s a push that is not altogether unexpected. Network operators in South Australia, Western Australia and Queensland have all acknowledged that it could be inevitable that all forms of centralised generation and transmission would be made redundant over time. While Ron Stobbe, the head of SA Power Networks, went one step further, predicting in April that rural communities – including major towns – could soon look after their own generation needs.

In NSW, the state government is actively promoting the search for the first town in that state that could become the first zero net energy town, generating its electricity locally from renewable sources, and storing and distributing it on a localised mini grid.

This ambitious effort, focused in the state’s New England region, is a sister project to the community-owned retailer project.

And as ZNET project director, Adam Blakester from Starfish Initiatives, noted last week, “the potential value of this model for Australia is quite significant, particularly given how abundant its renewable energy resources are and how distributed our energy needs are.”

For the community-owned retailer part of the plan to work, however, the consortium says it would need to provide a fair price for renewable generation matched to local demand, create local enterprise and provide energy security for NSW’s Northern Rivers. The business plan would also address how a community could help overcome structural and economic barriers to regional renewable energy.

And the advantages would be many, including renewable energy supply at competitive rates; support of locals wanting to self generate; preparation for future energy market reforms; access to innovative energy products; and supporting local community organisations and employment.

Blakester, who also spoke to RenewEconomy on Friday, agrees that “a convergence of factors up in the Northern Rivers” – including the high residential and business uptake of PV (“we don’t have Australia’s best solar resource,” said Blakester, “but it still performs well enough to outperform the grid!”) – suggest the timing is right to give the retailer project a go.

“Starfish and numerous others have been around the edges of the retailing side of energy for years and years,” he said in an phone interview. “The upside of ultimately having a ‘community’ retailer has long been at the top of the list” for the Northern Rivers group.

“The feeling is, if we can make this work anywhere, surely the Northern Rivers is that place.”