Could a 500-house community go off-grid? | RenewEconomy

Could a 500-house community go off-grid?

The short answer: yes. And advocates say it would be a much cheaper exercise than updating existing NEM infrastructure.


In the era of ever rising electricity prices, not to mention that thing called global warming, the idea of Australian households choosing to generate their own renewable energy – and not rely on the main grid – is looking less and less off-beat.

Last year, a CSIRO study suggested one-third of consumers could go off-grid by 2050, based on the prospect that it would be economic for households and businesses to do so from around 2030 onwards.

But what about taking whole communities off-grid?

According to a study published recently by Energy for the People and the Alternative Technology Association, the shift away from a centralised NEM to stand-alone community power solutions could be “quick and dramatic”, with most Australian regional towns and new housing estates expected to be able to function viably and economically off the electricity grid by as early as 2020.

Published in January, the report, called What happens when we unplug?, explores the consumer and market implications of taking community groups of 500 houses off-grid, using three Victoria-based scenarios modelled on the inner-Melbourne suburb of Preston; a new-build housing estate in Werribee; and a rural housing estate in Bendigo.

In a talk expanding on the report this week, the ATA‘s energy market specialist and consumer advocate Craig Memery said that the economics were constantly tipping the scale in favour of individual houses going off grid, but in terms of building economically viable, “none-of-your-business-Mr-Distributor” mini-grids for entire communities, the scales had already tipped.

“You don’t have to be Einstein to work out that, the more electricity prices go up, and the prices of solar and storage come down, the more incentive there is to go off-grid,” Memery said on Wednesday night in a talk at Swinburne University.

In fact, he added, “(the ATA Energy for the People study’s) analysis showed that, all costs added together, including buying back the asset value from the distributor, it was more cost effective for those communities to go off grid – both existing and new.”

Indeed, for new-build communities, said Memery, “it would be an absolute no-brainer”, when compared with the other option of paying, potentially, hundreds of thousands of dollars to upgrade the local network.

Memery noted that while our consumption of electricity used to be billed mainly on a volume basis, the main offender of today’s ever rising electricity bills was the fixed service charge – the flat rate charged to households and businesses for the cost of building more poles and wires.

“Australia’s NEM is the biggest national grid in the world, geographically speaking, and also the most sparse,” said Memery. “The cost of maintaining it and expanding it is driving up the price of power every year.”

On the other hand, the study found, shifting a community to a mini-grid using 95 per cent renewable energy and currently available battery storage technology would provide clean, sustainable electricity via a more reliable system, for the same price or cheaper, and with better service.

So what would be involved in taking a 500-home community off-grid?

Quite a lot, obviously. But the key ingredient of the ATA plan, says Memery, is solar PV; with an estimated 450 of the 500 homes sporting rooftop PV systems of between 4-8kW, leased through an (as yet non-existent) independent, fully integrated energy services company. This allows for around 10 per cent of households to continue being passive energy users, and paying bills, presuming some might not want to participate, while others might not be suitable for rooftop solar.

The next key ingredient would be energy storage – “you need a lot of it,” says Memery. To this end, the ATA chose lithium-ion phosphate batteries for their modelling – the same as are used in most EVs – as the cheapest and most efficient market-ready option.

The plan assumes that one in every five of the houses in the off-grid community would house a 120kWh battery bank, roughly the size of the average modern kitchen island bench. For extended periods of little-to-no sun, there would also be back-up generation, supplied by two or three bio-diesel ready diesel generators.

Memery said the system would use some smart technology, too, but noted that most of these “smarts” would be in the storage component of the system, because the off-grid community model doesn’t need a lot of peak shifting.

“Mini-grids are not as vulnerable to shifts in peak demand,” Memery said. The only real issue would be the capacity of the inverters. So we use big (and smart) inverters from the start.”

The next question, and the perhaps the thorniest, is who – as in, which energy company – would undertake a project like this.

For a community-scale project like this to work, Memery said, you would need a vertically integrated energy services company (ESCO) – the only key innovation the ATA plan is still waiting on.

As Memery noted on Wednsesday night, Australia’s retailers are “a very long way” from having the right mentality – or even the right business case – to undertake this kind of project any time soon.

“Retailers hate it when people use less energy, and use energy from decentralised sources,” Memery said. “This ESCO won’t be a large energy retailer and it won’t be an incumbent retailer.”

Besides which, he added, “if you work (a project like this) the way the energy market is working now, where there are four different entities you pay profit margins to, it will not add up.”

“This model only works if you are not paying your distributor for the cost of the poles and wires,” Memery said. “Energy companies’ business is owning and financing poles and wires, so they have a strong interest in replacing existing infrastructure.”

Which leads to another potential road block: provision for buying a chunk of the network from distributor, who would probably charge an inflated price.

As one audience member noted, “distributors love the return of investment” they are currently getting. So how do we break that love affair?

Memery’s answer: “Some things can be changed with the rules. What can’t be changed is the business imperative.”

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  1. Craig Allen 7 years ago

    Diamond energy specialise in both residential and utility scale pv, and also bio generation. Perhaps they would be interested in being the ESCO.

  2. Chris Fraser 7 years ago

    The spare generators are an upside if you are completely off grid. But the downside is you might need a community association from 500 homes to buy, keep and maintain them. Another potential choice is maintaining a connection with the local distributor on favourable terms to them, such as not having a peak demand VA above a certain threshold that would trigger more local demand-carrying grid investment. If the batteries are working well the load needed to charge batteries for 500 homes would be spread over the whole day and would not be noticed as much, keeping the local distributor happy.

    • Craig Memery 7 years ago

      Thanks Chris. While the community owned and operated model is one option for mini grids, and has many benefits and challenges, it’s by no means the only option. As noted in this article, our analysis is based on all that being done by an energy services company, as we found this was the most efficacious approach .
      Retaining a connection with the grid for partial or occasional use alongside a minigrid probably doesn’t stack up though in most cases due to the cost of maintaining that connection – maintaining grid infrastructure for occasional use costs a similar amount to maintaining it for constant use. We found just having backup diesel generators that get used 1 or 2% of the time to be cheaper, more reliable (with built in redundancy) and cleaner (they can be run on biodiesel) than maintaining a backup grid connection.
      Cheers, Craig.

      • Chris Fraser 7 years ago

        That may well be more economical, I have not analysed it, and under a deregulated system I respect the right of those that may, to go “off”.
        I wonder how artificially high connection charges can be maintained. This work shakes the notion that fixed connection even at low VA, will be whatever the distributor lobbies the government price-setting authority to charge.
        However, mass defection creates issues. The grid transmits centralised energy and that’s already in surplus. CEFC and ARENA invest in centralised projects and is a success to the degree that long lived clean assets replace dirty. Somebody needs to use the new energy otherwise we give certain polities more reason to get rid of clean energy agencies.

        • Craig Memery 7 years ago

          Thanks for your comments Chris, couldn’t agree more.
          It’s worth noting that, while this article and discussion is focused on the nature and merits of the modelling, our report is not actually an advocacy document for going of grid – it’s purpose is to understand when and how it will happen, and start the conversation about future impacts, on all consumers and businesses. Rather than being a call to go offgrid, it’s a wake up call to businesses, regulators and policy makers that this will happen whether they plan for it or not.
          Another of the many issues that needs to be addressed is how the consumer protections for consumers buying energy and energy services would work in the context of a stand alone microgrid – the current provisions in the NEM really don’t extend to that situation, and Australian Consumer Law is inadequate. Cheers, Craig

  3. Peter Davies 7 years ago

    The key ingredient in a hybrid solar/wind supply is a load following back up renewable/regenerative power option which can be provided by biomass gasification plants. Modern distributed power versions are maturing rapidly and now can come with low maintenance (150rpm) multi fuel engines in capacities of 50, 250 and 500kWe modules with similar efficiencies to high end gas turbines, and just as flexible. Wouldn’t it be nice if your local power supply also handled all the organic fraction of your domestic waste and sewerage management. This is the beginning of the circular economy.

    • Craig Memery 7 years ago

      Thanks Peter, interesting comments. When you have ample storage, as in this case, load following generation is not actually needed most of the time (only when the rest of the system breaks down). We found biomass for electricity production at this scale is a long way from being cost competitive, but agreed, it would be nice to close that loop between our waste and our energy production, and as noted by Rob and others above, we may one day have no choice but to do this in the context of growing population and restricted resources, regardless of the crude economics I’m applying here! Cheers, Craig.

      • Peter Davies 7 years ago

        Hi Craig, congratulations on your study. Cost competitive biomass systems at this scale is where we are. I would expect our systems to be directly competitive with your battery storage, and don’t degrade the same way over time or have the end of life disposal issues. Could either co-fire the diesel gensets or have stand alone gas gensets as well as enable options like district heating/cooling. Much depends though on the availability and volumes of community acceptable biomass, although the gasifiers are capable of cleanly disposing of most waste plastics and paper. There are some neat tricks that can pulled resulting in lower cost and effective waste water treatment though through incorporation of a gasifier. In the future we expect such plants to have downstream alternate uses for the H2 & CO gases produced, including plastics manufacture, throw in 3D printing and you just got the ultimate recyclers, creating virgin material from waste.

        • Craig Memery 7 years ago

          Thanks Peter, sounds Interesting, and I’d be grateful to hear your thoughts on our report.
          On biomass, could you provide some detail of the actual costs of supplying 500 home stand alone communities with biomass powered energy today, including balance of plant and the full cost of heat reticulation if it incorporates district heating or cooling, and the cost of obtaining and processing fuel?
          To be honest, I’m very sceptical about the idea that biomass comes close to solar and batteries with diesel generator back up to in terms of cost to supply a 500 home Australian community, unless there has been a very recent development I’m not aware of.
          Don’t get me wrong, there’s nothing I’d love more than to see biomass and waste powered cogen being cost effective, but my understanding is it’s currently more expensive and reliant on future developments such as those you have noted.
          Cheers, Craig.

          • Peter Davies 7 years ago

            Hi Craig, sorry for the tardy response, things are moving forward apace now, and I just can’t get a clear run to answer properly. So briefly cost of 2MWe biomass power plant including gasifiers and gensets is in the order of $6000/lot for 500 lot estate, operating costs depend on availability and price of feed stock supplies with offsets from better waste water treatment options and organic solid waste conversion and avoided costs of landfills, however 8-15c/kWh is the range. You would need to look at cost of district heating and cooling on a case by case basis. Where the estate includes a commercial centre this can make a lot more sense. We have also developed smaller systems that could be applied to serve four typical urban lots with hot/chilled water for indoor climate control and power, using wood chips or pellets delivered using pneumatic systems from purpose designed delivery trucks as for pellets industry in Austria.

          • Craig Memery 7 years ago

            Thanks Peter,
            That’s helpful information. Your capex is lower for the biomass for an equivalent battery/solar system, as would be expected.
            But looking at your opex figures, and considering the other costs, I really don’t see how you’ve come to the view that biomass is competitive with batteries and solar for a 500 home community.
            If you haven’t yet looked at it, you might find our report of interest, particularly to understand the capex and opex of microgrids with distributed generation and storage.
            The smaller trigen units sound interesting, can you share specs on those?
            Cheers, Craig

          • Peter Davies 7 years ago

            Thanks Craig, I found your “As expected…lower CAPEX” comment interesting since we are the only ones we know in our industry who could provide the technology in a reliable form at these costs.

            I have come to the view that biomass is competitive for two reasons, firstly the OPEX numbers are very conservative and weighted in the higher end direction, in practice for many situations you will find sufficient low or negative cost feed stocks such that the average is well below what was stated. We were though talking about a hypothetical 500 lot development so current high end export wood chip prices were used, the difference being transport costs.

            The second reason is that I am a practitioner, not just a theorist, so know first hand the reaction of people when introduced to the system. It is not just “this is great I can see the numbers and how this will reduce my power bills’, it is a calculation on how they could extend their own business through being part of the supportive services and opportunities. Biomass power via gasification should in fact be viewed as a co-product, rather than the only purpose. The future will see units like these forming the hubs around the circular economy, creating a range of cascading product outcomes where energy is the lowest value commodity, and waste and purpose grown biomass is recycled into new virgin materials used by the emerging sustainable consumer community. We already have projects being developed where the power side can be exported for just 6c/kWh because of the other services being delivered by the system.

            However do not get me wrong, I do not see advanced technology batteries as necessarily competitors to simple biomass “batteries”, rather I would expect them to be complimentary, allowing greater flexibility in overall system design.

            The smaller trigen units are still under development, there are not technical barriers but rather ones of time and development funds to complete. The core is available already though in terms of say a 15 or 40kWe genset gasifier combination using modified well known brand gas engines from the UK and suitable gasifier from ourselves (which would readily supply 5-20 houses). The gasifier is built and we are currently in talks on the genset for completion of a reference plant. Both the engine and gasifier cooling systems providing hot water @70oC. Still looking for suitable supplier of absorption cooler at these scales for chilled water supply. The complete unit would fit within the footprint of a standard 20′ shipping container.

  4. Rob Campbell 7 years ago

    We have recently completed a feasibility study on a 650 lot broad-acre development adjacent to Amberly airbase near Ipswich, Queensland. As part of this study, we have included water and sewerage treatment, storm water retention and other aspects to detach this community from the outside world. There are two 500KVA generators included in the design, these cover N-1 requirements completely. The main focus of this study is small or “incremental” storage storage devices installed into every lot, rated at 10KWh. Together with individual rooftop systems, the Northern boundary of the community uses a large solar array as a noise barrier and to power an AS3000 reticulation system, This large array of 1MW runs the community and infrastructure and the household loads during the day. As the area is in Queensland and the most significant load is Air-Conditioning this system is more than adequate and very reliable. The key is diversification, not everyone will be doing the same thing at the same time. Our modern lifestyle has the demographic doing work and play at odd times these days The cost per household for the electricity system only is estimated at $14400.00 per lot in capital costs. Annual maintenance costs would be met by the import charges from each resident which would require less than $550 per lot annually. Given developers are charged upwards of $5000 per lot for Energex requirements, this makes economic sense in so many ways.

    • Motorshack 7 years ago

      As long as you are building a sewage treatment plant, why not build a biogas digester to harvest methane? The gas can be stored, and used as needed to power backup generators, or at least to defray the energy costs of the plant itself. This also reduces the greenhouse impact of the methane, which will otherwise escape into the atmosphere. Nor is this a new idea, as I believe it is already being done successfully in a number of jurisdictions.

      • Rob Campbell 7 years ago

        Right you are, ten years ago it would have thought of as just a hippy indulgence, but thanks to Carbon, diminishing fossil fuels but more significantly, governments gouging consumers, all of these options are now viable.

        • Motorshack 7 years ago

          I appreciate the sympathetic response, but how exactly is it a “hippy indulgence” if we all decided to stop taking a crap right in our own drinking water supplies? It strikes me as the very height of modern scientific thinking.

          Or are you just referring to the biogas idea?

          • Rob Campbell 7 years ago

            Specifically biogas but you can apply it to most of the new regimine of sustainable technologies, with 7 billion odd people we are all getting a big wake up call as to what is fast becoming not only our kids, but our future. Thankfully it is gaining momentum, even with the economic speed humps, in the old days innovation and sustainability objectives took a lot longer to stand up each time they were pushed over by economic rationalism,

          • Alen 7 years ago

            This produces an excellent fertiliser too

    • Craig Memery 7 years ago

      Thanks Rob, great work. Would welcome the chance to compare notes – if you’re happy to get in touch, would you mind dropping me a line at [email protected]? Cheers, Craig.

  5. Alen 7 years ago

    Sounds similar to what the German town of Feldheim did. Exciting to see that some are considering doing this over here too.

  6. johnnewton 7 years ago

    What about community sized solar thermal plants?

  7. coomadoug 7 years ago

    Rob and Sopohie
    This is a wonderful trail of comments and Rob, I appreciate all you have said.
    I am thinking that there are some great possibilities when the electric car comes into the picture. The electric car can be considerred the home energy system for the customer where ever it is located at any time. If you are 20 kms away at work and the car is plugged into a charger on the city grid, the car is again connected effectively to the owners home. It is a parrallel connection on the same grid. These charging stations could also allow exchange of energy in either direction, import or export, at any time.
    In fact there is no need for the car to be connected as long as the smarts are counting the give and take from the system.

    The car owners have their travel plan on the car computer. The required energy to achieve this will be scheduled using the travel plan, time on charger and the energy sold and purchased when connected. Perhaps a price signal also varying the process.
    The grid stability management could use the cars to maintain system stability throughout the day. The entire energy production of the city solar could be allocated in a cost effective and stability management process. Wind generation could be intergrated and utilised the same way.
    Actually we can think of the entire nation is still the one grid. There may not be a physical connection of hard wires. But cars importing 100 KWH from another county and plugging into the local grid is as good as a 40 kw solar generator from another region being connected.

    The smarts in the car computer would have a cost trail of the energy used, imported and exported. The energy imported could be recognised in this process and utilised at best ecconomic result.

    I can imagine a town in this situation, that is a key transit location on the nations transport system. Such a town for example in the dessert between major cities, could have extensive green energy generation and export it in the vehicles that charge there on the stop over.

    There are endless ideas here.

    Just think of the day that the google people sat down the first time to talk about internet search engines and tools. This is where we are with solar and all manner of green energy and of course the cloud.

  8. juxx0r 7 years ago

    What we’ve modelled here is 20kWh a day of solar and 24kWh of storage per house. Surely some intelligent design and we could halve that consumption. Further, the storage is the expensive part, solar is cheap. Diversity of production through wind or biogas is essential to reduce the storage costs, but also oversizing the solar can reduce the storage required as can facing some of the solar east and west and increasing the inclination to extend the hours of solar capture.

    • Craig Memery 7 years ago

      Thanks juxx0r. We have in fact reduced the consumption with intelligent design (and retrofitting where relevant) as you suggest, and it is around half of your estimated 20kWh/day. Maybe you’re getting average daily PV output mixed up with average consumption?
      You’re right that traditional wisdom says that a diversity of generation sources can be cheaper, but as solar and batteries have dropped in price so much this has all changed now; wind and biogas don’t even come close to stacking up for this scale of project when compared to the other tools at our disposal (like solar, batts, EE and smart control).
      Facing panels east and west doesnt really help when we have storage, as it reduces the daily output for little gain. NW through to N is about optimal.
      And as you suggest, we have the panels on quite a tilt to capture as much winter sun as possible.
      Cheers, Craig.

      • juxx0r 7 years ago

        I wasn’t confused, there just wasn’t sufficient information in the article.

        I know micro-wind isn’t that cheap, but it’s still gotta be cheaper than batteries. What are you talking about in $/kWh for the modelled figure for wind? That information is really hard to find.

        My comments were based on a payback time for storage of 14 years and solar at just over 4 years. So on that basis solar is three times cheaper than storage. For Perth for instance you could orient some panels at 28Deg North of East at about 45 degrees and you’d pick up a couple of hours of extra sun and only forfeit about 30% of their peak. Do the same on the West and for each kW installed east and west you’d be able to forgo 1kWh of storage, whilst picking up 2.5-3kWh of production. So you sacrifice 1/3rd of your additional solar but are able to trim 2kWh of storage. Furthermore you reduce the depth of discharge on the battery.

        I lived in Northern Sweden and we rental a house off a couple whose house had no heating or cooling. The heat from the appliances and the occupants provided all the heating needed. I might add that up there the Delta T between inside and out was up to 60 Deg C for 24 hours a day. Our houses are so bad in Australia that we need monster AC units to handle a Delta T of max 26 Degrees C that only occurs for 8 hours a day. And on top of this, 90% of the year in 90% of the population centres the diurnal temperature swing swings through a comfortable temperature inside and we still use heating and cooling. The Swedes think we’re mad and they’re right.

        • Craig Memery 7 years ago

          Thanks Juxx0r.
          To start with your last point, I couldn’t agree more, Australia is in the dark ages when it comes to building performance and EE.
          To your first point (and others in order):
          I’d suggest reading the report linked to in the article if you have questions or issues about the design, as naturally an article can’t really convey all the details (although I think Sophie has done a great job).
          Microwind starts at an LCoE of (around) $1/kWh, ballpark.
          One can’t directly compare the cost of generation (wind) with the cost of storage (batteries) as that’s like comparing the cost of taps with the cost of buckets. I’d suggest reading up on discounted cash flows and payback period to understand how payback works, it’s more complicated than just dividing one thing by another.
          You’re exactly right about how facing panels east and west can extend performance of batteries, but it’s not a kW for kWh tradeoff. We have optimised the panel orietation in this case according to actual performance, loads and cost, and because the system design is mostly constrained by availability of solar in winter, facing panels east or west would reduce daily output too much and drive up the overall cost. N and NW was where we landed, although with a more rigourous analysis there would prob be benefit facing a few to the NE. Cheers, Craig.

          • juxx0r 7 years ago

            I’m out bush so i’ll have to read it when i return to civilisation.
            Thanks for the Wind costing.
            My costings are complete, i have a IRR for Solar at 27% and Batteries at 5% with a negative NPV for the batteries compared to the capital cost. So my modelling shows that minimising the batteries is essential. My batteries are only $177 positive after 15 years. I don’t hold out much hope for 15 year old batteries either and i’ve not depreciated my battery capacity, which i know i should. If i did the cost would be 25% more and would be net negative with IRR of -2%. It should be noted i’m using retail pricing and your project should be able to deliver better pricing.

            I’m quite familiar with solar insolation angles and a day by day optimisation needs to be done taking into account insolation Vs angle, i’ve not done it, but i can if you like, you’d need to give me a few weeks. I’ll integrate wind into my model.

            Thanks for your help.

  9. jarryd 7 years ago

    So they’re saying installing heaps of batteries, large solar systems, associated equipment and underground cables as well as back up generators is cheaper than just running cables and installing a few transformers in a new estate? I highly doubt it
    I mean take Victoria for example, due to it’s high density there are HV lines everywhere, you’ll rarely find a place where there aren’t lines within 2km especially around Melbourne.
    A new estate near my place called “Taylors hill west” comprises of around 1500 lots. They ran a 22kv line from a nearby feeder, installed around 8 kiosk transformers and done. Just set strict efficiency standards and barely if any upgrades would be needed to existing infrastructure such as the case with Taylors hill west.

    • Craig Memery 7 years ago

      Thanks Jarryd. Yep, the capital cost alone of the solar battery system is higher than the grid connection costs, but that’s only part of the equation. You need to take into account the ongoing operational and generation costs (for the minigrid these are tiny compared to the grid) and all the upstream costs in the case of connecting to the NEM (none of which apply to the minigrid) as well. Have a look at the report and feel free to let us know if you feel the numbers don’t stack up. Cheers, Craig.

      • jarryd 7 years ago

        Oh yeah I understand, interesting. What if a new estate remained on the grid, but took all these strong efficiency standards into consideration when building each dwelling, then installed solar PV onto the roofs of many of the homes so demand from the estate would be pretty low. Surely the costs in that scenario wouldn’t be much more expensive than the operational costs of the off grid scenario (also factoring in the replacement costs every 15yr and diesel fuel costs of the off grid cluster)

        I just think having massive diesel generators in our suburbs isn’t really a great idea, so use of current energy infrastructure would be better. Business models need to change though!

        • Craig Memery 7 years ago

          Thanks Jarryd. Agreed that diesel generators and suburbs aren’t a match made in heaven, however we’ve addressed this in our design by assuming they are in silenced enclosures, are biodiesel ready, are collocated away from homes (a challenge for the inner suburb scenario), and only run 1 to 2% of the time (most of which is cold cloudy winter days when people are inside with doors closed). I guess in terms of impact it would be akin to the nearest homes living near a busy main road for only a few days per year, so we’re not subjecting communities to greater impact than is normal today.
          On the first point about being connected to the grid, see my response to Chris.
          On the point about replacement costs and diesel costs, naturally we have factored all of this in to the analysis… maybe have a look at the report and let us know if you think we’ve missed anything.
          Cheers, Craig.

          • jarryd 7 years ago

            Thanks for the reply, Ive had a look though I find it a little bit confusing to understand all the different scenarios/figures given.
            What was the price per kwh for the off grid scenario?
            Currently we pay 0.27 cents per kwh flat rate which seems pretty affordable at the moment.
            And will the removal of the carbon tax, and decline in peak demand affect the viable outcome of such projects?

          • Craig Memery 7 years ago

            Thanks Jarryd.
            When comparing the on grid and offgrid scenarios, using the cost per kWh is not an accurate measure, because we use a combination of measures to achieve the same end use energy so the metered electricity volume is lower to deliver the same outcome. For eg, it would be more cost effective to pursue the offgrid option if the levellised cost of energy (including EE and all the other external costs as we have in our study) amounted to 45c/kWh LCoE for 10kWh ($4.50/day) for the offgrid option compared to a baseline of 25c/kWh LCoE for 20kWh ($5.00/day) from the grid to supply the same amount of end use energy (these numbers are just illustrative BTW). So the appropriate measure for comparison is the Net Present Value of supplying all energy and services with either option. As detailed in the report, the NPV is different for different scenarios. So if you use an average-ish amount of energy at your home, you can compare your NPV to the scenarios in the report by dividing the overall NPV from a scenario by 500, but comparing c/kWh isn’t meaningful.
            The removal of the carbon tax will have little impact because it won’t have much effect on electricity price, but the decline in demand will tip the scales more in favour of the offgrid solution, as the unit cost of energy from the grid will continue to rise to recover network revenue across a smaller base while the offgrid system capex will be lower due to lower demand.
            Cheers, Craig

          • jarryd 7 years ago

            Ohhh so what you’re saying is this cheaper scenario isn’t just based off electricity but substituting other types of energy to fulfil the needs of the consumer which would result in a lower electricity consumption for that household? Makes sense why the report speaks of energy stars, gas and wood heating.
            In that case, wouldn’t it be cheaper to retrofit homes in a estate on the grid with the cheaper LCoE?
            Sorry for all these questions but I’m just trying to make sense of this all. thanks

          • Craig Memery 7 years ago

            Thanks Jarryd, and yep, you’ve got it. Not sure what your second question means though, could you elaborate? Cheers, Craig.

          • jarryd 7 years ago

            Sorry for being vague. What I meant was, what if a green field development built all homes to the highest efficiency standards and substituted other fuels to fulfil their energy needs (heating, cooling, cooking) whilst sourcing from the grid instead of SAPS?

          • Craig Memery 7 years ago

            Thanks Jarryd, absolutely, in many instances at that is the case now (and we should be building smarter homes anyway… our current building standards allow for idiotically inefficient buildings, and people pay more in the long term as a result) but – it’s just way too case-specific to generalise one way or the other to answer your question, as it depends on the full, long term cost to connect and supply the new development via the grid.
            – It’s made more complicated by the fact that energy efficiency measure usually have a bigger impact than the cost of SAPS than on the mains grid. For example, reducing energy use by say 50% on a stand alone minigrid will reduce the SAPS cost by 40% through only needing half the number of batts and solar and fewer and smaller inverters, but might only reduce the cost of a network extension by 5% through, say, a smaller new transformer. But if it means avoiding a $10M 66kV augmentation, it might be the difference between offgrid being preferable and staying on the grid. There are many factors, hence the complexity of our analysis. On that topic, thanks for the feedback that the scenarios are hard to understand in the report, we’ll have a look at how we can clarify those – suggestions welcome. Cheers, Craig

          • Rob Campbell 7 years ago

            Hi Craig, sorry for the delay in responding to your comments. Just looking at the conversation, the consensus still seems to be that battery storage is uneconomic compared to the grid. When we started developing SunSink, in 2010, we were looking at access to the grid issues, not revenue ones, this is because all of the FIT’s were still in place.Even from the outset however we had a price model of $600/KWh. This still remains our upfront costs, the difference with our offer is the annual service fee, by paying this fee the customer gets the low upfront cost, zero warranty issues and effectively infinite lifespan of the unit as the storage core is replaced in 6-7th year at no costs. We have chosen this model because we know full well that in six years storage will be cheaper and better, so have assumed redundancy in the 6-7th year. The serviced model gets around the issue of our storage technique ie: 540VDC storage. The benefits to distributors are that they can see the deployment and performance of potentially thousands of storage installations via one point of contact, and potentially have control of each device if required. Additionally, issues such as recycling and service are centralized, ticking many boxes. We can only a reduction from this already low entry price once we ramp up large scale manufacture of the SunSink units.
            Our units work financially at an 18cents arbitrage, I think this puts a lot of neigh-sayers arguments to rest.

          • Craig Memery 7 years ago

            Thanks Rob, that’s really interesting, and I agree that grid connected battery storage (except for DB side storage at fringe of grid locations) doesn’t yet stack up yet in the application you’re talking about. You might be interested in articles we’ve published on that in Renew Economy and elsewhere.
            But grid connected batteries is a different application to that examined in our report, and you can’t directly compare the two. I’d be interested to hear your views on the storage in an independent (not connected to the distribution network) community scale microgrid – we found that in some cases, the economics do stack up today.
            Our modelling is based on all of the costs to supply, rather that being reliant on revenue streams such as FiTs which, as you would know, can swing dramatically. Would welcome your feedback on the report.
            Thanks for the link to Sunsink, I’ll get in touch
            Cheers, Craig

          • Virgin Pacific.Inc 5 years ago

            If you are paying 0.27 per KWH you are being Screwed in the worst way.

          • Peter Davies 7 years ago

            We looked at providing a gasifier/genset combo for a Council swimming pool. The tender required a noise rating not exceeding 32dB, which is the equivalent of being in a small country library and opening a book. It can be done though, the acoustic enclosure added $80,000 to the cost, but you cold have revved a motorbike without a muffler inside and not disturbed the neighbors 30 metres away…

          • timo 7 years ago

            why a diesel generator? why aren’t you using a natural gas turbine? They are very efficient, low emmisions and gas is usually plumbed into new housing projects.

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