Australian Prime Minister Proposes $36M Microgrid Program

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Australian Prime Minister Scott Morrison has proposed a $36 million microgrid program to determine the feasibility of using microgrids for poorly served and remote communities across the country. An initial slate of prospective projects is emerging.

Photo by Watchara Ritjan/Shutterstock.com

The Regional and Remote Communities Reliability Fund would help fund as many as 50 feasibility studies, designed to test the ability of microgrids to improve electric reliability and resilience, save money and reduce emissions. Many of the targeted communities rely in whole or part on diesel-fueled generators.

Energy Minister Angus Taylor said that as the cost of off-grid electricity continues to fall, it will be cheaper at times to provide off-grid supply rather than build transmission. The energy minister cited the Daintree microgrid, the feasibility fund’s first proposed project, as an example of the public-private partnerships the government program would fund. If all goes well, Daintree will be the first 100% renewable energy microgrid in Australia.

Daintree will include a solar power-to-hydrogen microgrid within a rain forest listed as a U.N. World Heritage site. Participants with rooftop solar PV systems would receive credits for electricity they feed into the microgrid. The electricity would then be used to produce hydrogen gas that would be stored and used as needed to fuel large-scale generators.

“Australia is a very large country and we are rapidly approaching a tipping point where it’s cheaper to install solar-storage and or microgrids in regional areas than it is to maintain network infrastructure over large distances,” said Dave Martin, managing director of Power Ledger, an Australian company that specializes in energy blockchain trading software. “However, there are still elements of the regulatory governance framework that incentivize network providers to maintain under-utilized and expensive networks. I think once these incentives begin to be wound back and the model for the alternative becomes clear, we will see an uptake in off-grid solutions, particularly in regional Australia.”

For its part, Power Ledger sees opportunity should the microgrid program be launched and carried out.

“Distributed renewables will provide a cheaper, safer, cleaner alternative to the current high-cost system. The challenge will be how to implement this transition. Who owns these assets? How do they integrate with the existing market? Who is best placed to operate them? Feasibility isn’t the question anymore,” Martin said.

He added that it is encouraging to see the government exploring options to address the structural issues driving the cost of regional energy supplies.

“I think in the longer term, we will begin to see more regional Australian towns disconnecting from the main grid and establishing smaller microgrids which are a mix of distributed solar and battery storage,” he said in an interview. “To think we can continue with the same model of energy supply and get materially different outcomes in terms of cost, safety, reliability and carbon intensity is a folly — we need to be adopting a fundamentally different approach if we’re going to get a fundamentally different outcome”

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