ARENA’s Regional Australia Microgrid Pilots Program can improve the resilience and reliability of electricity supply in faraway places, says CEO Darren Miller.

Something nice about the evolution of renewable energy in the national grid is that solutions that were once the obsession of backwoods DIY engineers are being adopted at gigawatt scale. Rigged up systems of solar panels and truck batteries have been supplying juice to rat-race escapees for decades. Those who follow the news must be chuckling into their morning coffee when they read the rest of the world has finally twigged.

In Australia, the problem of supplying power to communities that live beyond the grid is a perfect match for “new” technologies. The falling price of PV modules, escalating abilities of batteries and articulate software can provide energy security to people in remote areas who otherwise have to put up with noisy, smelly diesel generators, expensive fuel and patchy delivery.

In the cities, outages hardly ever happen. Far off the track, it isn’t funny when the fridge stops.

The Australian Renewable Energy Agency understands only a blanket approach to the energy transition makes sense. To improve the resilience and reliability of electricity supply in faraway places the agency has launched the Regional Australia Microgrid Pilots Program, a $50 million pillar to support microgrids in remote communities that may experience reliability issues or rely on fossil fuels. Robust autonomous systems will also put them in better shape to face bushfires, floods or storms.

Something up your sleeve

Darren Miller says hydrogen is on the table as a technology that will be considered for funding.

“We’re aiming to help regional and remote communities prepare for, ride through and recover from natural disasters by maintaining a continuous supply of electricity, such as what occurred with the recent Victorian storm damage to the AusNet network,” says ARENA chief executive Darren Miller. “Microgrids could also have the ability to provide energy and grid support services back to the main grid.”

Storage is an essential complement to microgrids powered by solar, but solutions must provide very high levels of reliability. True to its mandate to operate at the vanguard, ARENA has supported battery technology that was relatively new to the market at the time it got involved. “These projects have proven to be reliable, facilitating extended periods of operation with the diesel generators turned off,” Miller says, citing results from systems installed at Lord Howe Island, Flinders Island and Daly River in the Northern Territory.

Those three projects rely on backup generators that can provide power when an inverter-based supply is unavailable, Miller says, but ARENA is now giving consideration to the use of alternative sources of fuel, such as hydrogen, to replace diesel gensets. Examples include the hydrogen hub-and-spoke models being investigated by Ergon Energy and Horizon Power under feasibility studies related to the federal government’s Regional and Remote Communities Reliability Fund, he says, including the Denham remote hydrogen microgrid demonstration in Western Australia. “Projects could include investigating the use of hydrogen in a range of applications, such as transport, energy storage and generation,” he says. It’s safe to say the market has moved away from the use of lead-acid storage for stationary power.

The unexpected

Extreme weather events can influence the assessment of a solution in a number of ways, he says. “The capacity of the storage solution would need to be sized for how long the system needs to operate on storage alone. And the physical design of the system would need to take into consideration extreme weather conditions. Additionally, the local geography could favour particular types of storage such as pumped hydro.”

The agency expects applications will come from a mixture of residential, commercial and agricultural loads with daily, weekly or seasonal usage patterns. ARENA is anticipating grant requests between $1 and $5 million, with a minimum grant amount of $250,000.

Grants above $5 million would need to be deemed high-merit with very broad industry benefit, Miller says. “While ARENA could fund up to a maximum of 50% of total project capital costs, we expect the percentage grant contribution to be significantly less than 50% given the goal of projects is to demonstrate a path to a commercial solution.”

The high cost of powering the country’s outskirts is obscured by the fact that states and territories make up the difference between the tariff revenue and the cost of supply.

For example, the Queensland government provides a subsidy to Ergon Energy called the Community Service Obligation to meet this cost. To support its Uniform Tariff Policy, the West Australian government subsidises the price of electricity to regional and remote customers. In 2020-21, the subsidy will total $185 million for regional electricity in the state.

Microgrids may deliver reliable power to only a few, but everyone is better off for them.