In South Australia’s Riverland region, one local renewables company recently completed its first small-scale solar farm – but its plans for solar power in the region go way beyond a single rooftop.
Imagine you’re an ambitious solar installer looking to build a large, commercial-scale PV system, but you live in a regional town in South Australia where commercial projects are thin on the ground. What do you do? The answer is to go right ahead and build the system anyway. Set it up for 100 per cent export, make a deal to sell the power to your friendly local energy retailer, and all of a sudden what you’ve got is not a commercial PV system but a small-scale solar farm.
At least, that’s the answer reached by Mark Yates, director of burgeoning clean energy company Yates Electrical Services (YES). His company recently finished installing a 180 kW system on the rooftop of an aircraft hangar-turned-self-storage facility in Renmark, in South Australia’s rural Riverland area. YES has set the plant up for pure export to the electricity network, and is working with energy trading company Reposit Power to maximise the value from the energy generated – storing it when the wholesale market is low and selling it to the retailer when the market is high.
Mr Yates says the idea of building a PV system specifically to trade energy on the NEM evolved from a simple desire to build bigger solar systems. “We have always wanted to install a system over 100 kW,” he says. “We wanted to gain a better understanding of the SA Power Networks approval process, and also the business of LGC creation and trading.”
He also had an interest in the idea of energy arbitrage – trading electricity to take advantage of the volatility of the wholesale energy market – sparked by an encounter with Reposit Power during a visit to Canberra in 2014.
“I was intrigued by the model they were using for their domestic customers, and after a second encounter in 2015 I developed a great relationship with them.” Reposit’s business is aimed primarily at households – providing a software and monitoring service that allows solar customers to buy and sell electricity on the market. But Mr Yates took these systems and used them as a foundation for trading on a much larger scale. “Working in conjunction with our retailer, we were able to include Reposit’s energy storage/trading arbitrage system, enabling us to store generated energy when the spot market was low, and offload that stored energy through the Reposit Controller when the spot market was more favourable.”
And as the Reposit trading model allows you to sell power to the NEM at peak wholesale prices rather than relying on feed-in tariffs (netting you, say, 60c/kWh instead of 6c/kWh), this had a huge impact on the project’s ROI.
While this is all very enterprising, it’s also part of a much grander vision. The Renmark installation is a test site for an innovative community solar project called Red Mud Green Energy, which involves building a slew of small-scale solar farms on vacant agricultural land. The project was inspired by the plight of food producers in the Renmark area, many of whom were forced to abandon their land and livelihood after the prolonged drought of the 2000s. Given the ample solar resources in the area, Mark Yates saw a way to help these farmers and boost the Riverland economy.
“We wanted to offer land owners the opportunity to take advantage of South Australia’s volatile wholesale energy market,” says Mr Yates. “A project like this will not only introduce an entirely new industry and commodity to our regional centre, but the scale of the individual projects also means that we are able to source and employ technicians and supplies locally, which creates local jobs, and strengthens our local economy.”
YES built the pilot facility primarily as a proof of concept for the Red Mud project, but also to learn about the various approvals processes required to run a solar farm. This included negotiating with SA Power Networks, learning about the National Electricity Market spot pricing structure, and applying for funding from the Clean Energy Finance Corporation (CEFC) – which was granted in late 2015.
The company now plans to collect 12 months of data from the Renmark facility to prove the viability of the concept, before rolling it out on empty farms across the Riverland.
And, says Mr Yates, he hopes it will prove the benefit of commercial-scale solar to businesses in the region too.
“The Renmark test facility is proof of our ability to undertake and complete projects of this magnitude,” he says. “We have a solid grasp of the processes involved, and, now that we have an Individual Retailer Exemption, we are able to offer large commercial clients the option to either purchase a system outright, or establish a Power Purchase Agreement with us, allowing us to retail our generated power at competitive prices and ultimately saving our customers money.”