Largest Renewable Energy Microgrid in Australia Offers Businesses Lower Cost Energy

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Victoria’s coal power hub, the Latrobe Valley, is set to host Australia’s “largest” renewable energy microgrid, after a $15 million solar and battery storage project proposed by a consortium of local companies was announced as the winner of a $3 million state government grant.

The Labor Andrews government said on Monday that a project led by SGSP Assets (Jemena) subsidiary, Ovida, had won the grant for the Latrobe Valley Microgrid Program, designed to cut energy bills for 750 small to medium sized businesses in the region.

The project — Solar Partnering Around Regional Communities (SPARC) — will deliver 7.5 MW of solar PV and 1.5 MWh of battery storage across potentially 75 sites (an estimated 10 businesses per microgrid), in partnership with shared solar tech start-up Allume Energy, the Moreland Energy Foundation and RMIT.

Perhaps most importantly, however, the SPARC project will target businesses that either cannot afford the upfront costs of solar, or are tenants, and so don’t own their own rooftops — allowing them to cut their electricity bills by up to $10,000 per year.

The push to extend the benefits of rooftop solar to business and residential tenants traditionally locked out of rooftop PV comes from what is essentially the same team behind a cutting edge shared solar project that was switched on in Melbourne in May this year.

That project installed a 7.2kW solar system on a mixed residential and retail building in the bay-side suburb of Highett, to deliver — using Allume Energy’s technology — cheap renewable power to five apartments, a baker, a hair salon, and an occupational therapist.

As we reported at the time, the mix of software and hardware that made this possible was basically contained within a small box called Solshare, designed by Allume to allow the solar to be distributed and billed to individual apartments.

And in August, the same group won a separate state government grant of nearly $1 million for the Ovida Community Energy Hub project – to install solar PV and battery systems in three as-yet unnamed multi-tenanted commercial and residential buildings.

That project aims to help cut energy costs for around 650 customers — all up it is expected to generate 5000 kWh of renewable energy and support 11,000 kWh of energy storage.

The Latrobe Valley project takes Allume’s homegrown technology a major step further, to deliver a solution that Ovida says will make it the largest concentration of microgrids in Australia.

Largest renewable energy microgrid moves the needle

As Allume CEO Cameron Knox explains, the scale of the Latrobe Valley project means it is probably more accurately described as a microgrid turned inside-out — where instead of having one connection point back to the grid, each microgrid will have a single connection point that goes back to the solar.

And because it is such a big project, it can leverage at much lower rates, offering the businesses that take part up to 50 percent reduction on their usual power costs, in an area that has been hit hard by rising electricity prices.

“A key motivator (for our company and these projects) has been to dispel this fabricated trade-off between clean energy and high cost of electricity,” Knox told One Step Off The Grid on Tuesday. “This project really allows us to move the needle in terms of energy savings.”

The businesses that will take part in the project have yet to be selected, but the opportunity will be announced, and information and selection processes will take place, largely coordinated by the Moreland Energy Foundation.

As with the Hampton and Community Hub projects, Ovida will install, own and operate the rooftop solar and battery storage systems, using Allume’s Solshare technology to connect the estimated 75 sites.

Ovida’s key role in the equation is to provide the financial backing to allow the solar and storage systems to be installed at no upfront cost through a licence agreement with the landlord or the owners corporation.

Ovida has also obtained a electricity retail exemption from the Australian Energy Regulator for all states and territories except Western Australia and the Northern Territory.

50 percent lower cost energy

Through a power purchase agreement with the tenants, those who opt in are charged only for the solar electricity they use, at a locked-in rate of around 50 percent less than the retail electricity price.

Tenants are not locked in to the PPA, however, allowing them to terminate the agreement if they move out of the property.

On the battery storage front, Knox says the plan at this stage is for a small amount of (most likely lithium-ion) battery technology to be installed at each microgrid cluster, to increase solar consumption and better manage weekend generation.

Meanwhile, the data generated by the project will be shared for analysis by government, industry and communities to address other barriers to solar, such as regulatory and governance issues.

“So far property owners have been the main beneficiaries of solar technology,” said Ovida’s Shaun Reardon in comments on Tuesday. “By paying for the equipment and installation, Ovida is enabling regional businesses, and people who aren’t homeowners, to benefit from solar.

“This (Latrobe Valley) microgrid… will considerably drive down operating costs, making businesses more cost-effective, enabling them to reinvest and employ more staff,” he said. “By building a strong and robust local energy system, it will bring commercial benefits, social prosperity and be a catalyst for future innovation in the region.”

Center of coal-fired generation

And the significance of the region the project is targeting is not lost on anyone. As noted above, the Latrobe Valley — as the state’s center for coal mining and coal-fired power generation — is facing major change.

Since the Hazelwood coal plant was shuttered early last year, only the 1,480 MW Yallourn power station remains — and that is slated to close in 2026, when it will be more than 50 years old.

For these reasons, the Valley has been a major focus of the Labor Andrews government, as it works to deliver its legislated target 40 percent renewable energy by 2025.

Clean energy doesn’t mean more expensive electricity

It is the home base for the new government body, Solar Victoria, where a team of 15 will soon begin processing rebate applications for the state’s $1.2 billion rooftop solar subsidy scheme from an office in Morwell.

A further three government grants have also be extended to the Latrobe Valley New Energy Jobs Fund, including $8,000 to Federation Training, to halve the cost of their solar PV installers course for October participants.

EnviroMicroBio will receive $50,000 for new laboratory and analytical equipment to support local businesses wishing to explore anaerobic digestion for energy production and waste management.

And Latrobe Valley Engineering Services and Sundermann Water Power will receive $48,400 for development of the Sundermann Water Turbine.

“We’re bringing more jobs to the Latrobe Valley and supporting local businesses — all while driving down energy bills and boosting the reliability of the local energy supply,” said state energy minister Lily D’Ambrosio in comments in Tuesday. “This microgrid program will ensure the Latrobe Valley is at the centre of the shift to renewable energy and lower emissions.”

As Allume’s Knox puts it, the project will stand as “a great symbol that the clean energy transition doesn’t mean more expensive electricity.”