Locally-owned renewables are shaking up the energy market. Will government and industry join the party or try to shut it down?
CHEWTON Primary School – student population 40 – perches on a hill above the houses of the small Central Victorian town, which borders on Castlemaine.
Before the year is out, its red tin roof will be home to solar panels facing east and west, positioned to best offset its demand. The school is crowdfunding for a renewable energy system, by way of a new scheme called The People’s Solar.
“Our savings won’t go back into the big bucket,” says principal Julie Holden. “They won’t be used for staffing and books.” She’s promising to fund environmental initiatives by students around the town instead, as well as more energy efficiency improvements for the buildings.
Modest though its goal sounds, Chewton Primary is one front in a revolution.
In a speech in mid-October, Michelle Groves, CEO of the Australian Energy Regulator, described the coming change in the electricity industry that way: “a revolution”.
“Revolutions can seem threatening at first, but they also present opportunities,” she said.
In her speech, delivered to the Energy Users Association of Australia conference, she was discussing the rise of “prosumers” – consumers of electricity who are now also producers. Over a million households have installed solar panels in the last few years, she said, and that’s a good thing: along with smart appliances and batteries, this wave of solar generation is increasing both customer choice and the resilience of the electricity network.
But she warned that if existing networks resist these new, competing technologies, “there is a risk that a significant number of consumers will ‘walk away’ from the network”.
That is, they’ll leave the grid altogether, in favour of their own generation and storage, leaving its fixed costs to be defrayed among fewer users. “This would have major consequences for many consumers and for the efficient operation of energy markets,” Groves said.
Solar photovoltaic panels are booming for good reason. They’re a consumer item of malleable meaning, alluring for stubborn individualists and climate change activists alike.
But for a growing number of people, renewable energy promises something even more: an opportunity to rejuvenate communities and create local jobs. All around the country, volunteers are planning energy systems that will be owned by their community, covering a scale from single rooftops to entire towns.
“The buzz phrase is that solar power is democratising the energy market,” says Tosh Szatow, the founder of the People’s Solar, as well as a consultancy called Energy for the People. “But the democracy we’ve got isn’t serving our interests. This is something more – it’s energy owned by people, serving interests defined by those communities themselves.”
Around Castlemaine and districts, in particular, the solar citizens are rallying.
It’s a cloudless Sunday morning at Chewton Primary. Szatow explains the People’s Solar to his audience: “If the community gives the solar panels once, those panels will give back to the community for 25 years. So we turn $8000 of donations into $25,000, or more, of reinvestment in the town.”
Szatow is wearing a blue t-shirt bearing the slogan: “Stick it where the sun shines”. The event is called “Going off the grid” and it’s doubling as a fundraiser for the primary school’s panels. The People’s Solar has already overseen the installation of community-funded panels at Taradale Primary and Castlemaine Childcare Co-operative.
The region is becoming a hotspot for grid-connected solar households. In August, over 300 residents signed up for new rooftop systems by way of a not-for-profit, bulk-buying scheme called Mount Alexander Solar Homes.
Beforehand, Castlemaine already boasted nearly double the statewide proportion of solar houses, says the scheme’s coordinator, Neil Barrett. Because the new systems are much larger than most pre-existing ones, in total they’ll lift the shire’s solar generation capacity by up to a quarter. “It’s been a ripper,” he says. “It’s employed a lot of people for four or five months. We’re taking expressions of interest for a possible second stage.”
Volunteers with another organisation, the Mount Alexander Sustainability Group, are investigating renewable generation on an even larger scale. They’re scoping a range of options, including a solar farm, small-scale hydro and biofuels generation, which would account for a quarter of the shire’s total electricity consumption. They are planning to establish their project as a co-operative, majority-owned by locals.
The group has adopted the same model used by Hepburn Wind, a community wind farm that has been generating power since 2011. Its two turbines feed enough electricity into the grid to more than match the needs of nearby towns Daylesford and Hepburn.
Taryn Lane is the community officer for Hepburn Wind. She also works for its spinoff, Embark, which was founded to help similar projects start up. Right now, she says, the best option for community groups is solar, because there are several viable models, from bulk buys and donations, to investing in powering the local pub. There are at least ten community groups across the state working on it, from the Surf Coast to East Gippsland, and fifty around the country.
The outlook for wind, however, is grim. The federal government’s decisions to scrap the carbon tax, and review and reduce the Renewable Energy Target have slashed the co-operative’s earnings.
The Victorian government hasn’t helped. Its sudden blanket ban on wind power in the Macedon Ranges (among other locations), imposed in 2011, scuppered locals’ plans for three turbines in a nearby pine plantation. Previously, the community group had received a government grant for a wind monitoring mast.
“It’s a bit of a mess isn’t it?” says Lane. “It shouldn’t be this hard.”
She argues that the state government should exempt community-owned projects from the wind “no-go zones”. It should also introduce a state-based renewable energy target and establish a feed-in-tariff for community-owned solar – policy measures that have already been adopted in South Australia and the ACT.
But as the state election approaches, there’s no sign of change. In mid-October, the Napthine government released its energy policy. Renewable energy wasn’t listed among its seven priorities. The state Labor party has promised to review the wind no-go zones and other planning restrictions, and also, to expand renewable energy, but hasn’t announced how it’ll do so.
North of the Murray, the signs are more encouraging. The New South Wales government, also Liberal, has emerged as an unlikely champion of community-owned energy.
Last Thursday, Rob Stokes, the NSW environment minister, will launch the “Repower One” project, a 99 kW solar array on the roof of the Shoalhaven Bowling and Recreation Club.
He also announced a new round of grants worth $700,000 for community energy projects. Last year, the NSW government awarded $411,000 to nine different community-owned wind and solar farms.
The solar panels on the bowls club are an initiative of volunteer group Repower Shoalhaven. On the strength of countless volunteer hours, they managed to locate a profitable oasis in the regulatory morass, explains Chris Cooper, the group’s founder.
They raised $120,000 in ten days. More than half the investors are locals and Cooper says it’ll deliver them a good commercial return. The bowls club, too, stands to come out several hundred thousand dollars ahead over the life of the system.
Repower Shoalhaven is planning on doing it again and again – cuts to the RET notwithstanding. Already, they’re in discussions about rooftops on local universities, high schools, ambulance buildings and water authorities. “We hope to get another one up by Christmas,” Cooper says. “Every three months we aim to get another project out to our members and investors.”
Elsewhere in NSW, the government is sponsoring a project to establish Australia’s first “Zero Net Energy Town”. The winning town, somewhere in the northern inland region, will be announced in mid-November. It’ll be funded to develop a blueprint and business case to switch to 100 per cent, locally generated renewable energy.
The scheme’s coordinator, Adam Blakester, from Starfish Initiatives, a charity that works on regional sustainability, says the public shouldn’t underestimate the scale of projects, and the ambitions of those involved.
“Most people think community and they think cute and little,” he says. “People haven’t yet understood that this is about serious projects with serious engineering, money, law, governance and marketing. And it’s got to be one of the most professionally overqualified sectors I’ve ever worked in – it’s a long way from the lamington drive part of the community sector.”
All that knowhow goes only so far, however, because the challenge isn’t only technical; it’s also regulatory. Now, over half our electricity bills are consumed by distribution, he says, and the regulated charges are the same no matter how far the electricity travels. Local energy systems, especially in the regions, have the potential to cut those costs – if they’re allowed to.
“Until now, regulation has been about ensuring the generators and network operators don’t go bankrupt and we always have electricity,” Blakester says. “When you want to fiddle with it, you find out it’s very complex – and you bump into some of the most powerful vested interests in the world.”
Earlier this year, Blakester helped found a peak body, the Coalition for Community Energy, to help lobby for regulatory change. In June, it held a conference in Canberra. One of the speakers was Arno Zengle, the mayor of a village in Bavaria called Wildspoldsried. Last year, the village produced more than four-and-a-half times the electricity it consumed.
“In Germany there are more than 300 towns that have achieved zero net energy status,” Blakester says. “It’s like another planet compared to the centralised energy oligarchy we live in.
“Can we do it in Australia? It’s too soon to be confident the answer is yes. Technically it’s doable, but whether it’s culturally and systemically possible, well, that’s up to us.”
THE chasm in thinking about our energy future can be traversed in just 12 kilometres in Central Victoria, between the towns of Maldon and Newstead.
Late last month, the state government announced that Maldon, a village of 1500 residents only a short drive from Castlemaine, is going to get gas – by the end of 2017, approximately.
It’s part of the “Energy for the Regions” program, first announced in 2011. The state government’s latest tender, worth $85 million, will fund gas connection for 11 towns across Victoria by way of “virtual pipelines”. Compressed gas will be trucked to a station on the outskirts of each town. From there it’ll be distributed throughout the streets via a brand new pipe network.
The successful contractor, TasGas, a subsidiary of Brookfield Infrastructure Group, says the rollout will cover 12,500 homes and businesses.
In the middle of next year, the company will go on a “roadshow” of the towns, says CEO Roger Ingram, to explain its offer and pitch residents to connect. TasGas is still finalising its numbers, but Ingram estimates that the virtual pipeline will deliver gas 40 per cent cheaper than LPG.
Tony Wood, the energy program director at the Grattan Institute, thinks it will be a hard sell. The institute’s latest report, Gas at the crossroads, speculates that households will, if anything, begin switching away from gas. In the last 5 years, retail gas prices have risen by more than one-third, and they’re expected to rise significantly more. The wholesale price is tipped to double in the next two years.
“If gas prices go up as much as they might, a lot of customers aren’t going to connect after all. Or if they do connect, they’re going to be really pissed off. How would you feel if you connected and gas prices went up by 50 or 100 per cent in a very short space of time?” Wood says.
He describes the government’s spending on Energy for the Regions as “mindboggling”.
The $85 million amounts to a subsidy of $6800 for each house and business that could connect. But in reality, it’s much more. At the take-up rate estimated by TasGas – between 15 and 30 percent over the next decade – the government is shelling out somewhere between $22,667 and $45,333 a pop.
“I’m sure governments must have made worse investments, but I can’t think of them off the top of my head,” Wood says.
The residents of Newstead, 12 kilometres south of Maldon, want something different. For four years, the volunteers comprising “Renewable Newstead” have been working on a plan to become completely powered by renewable energy.
The group began by offering energy audits, which were taken up by 8 out of every ten residents. Then they began looking into creating a local micro-grid, fed by banks of solar panels.
“Our main interest is community building,” explains Geoff Park, from Renewable Newstead. “We’ve got the complete spectrum of views about climate change and sustainability. The number one priority for us is that whatever we do needs to add to the social capital of our community.”
Park anticipates that the scheme would offer electricity to locals at a slight discount from current prices, while also generating cash for to spend elsewhere in the community. And unlike gas, they don’t need the government to pay. A small grant would help scope a plan, but otherwise, it would be a commercial proposition.
Two years ago, when Park contacted the Liberal state government about the idea, he didn’t even get a reply. The group has had similar trouble dealing with the network distributor, Powercor.
Tosh Stzatow is advising Renewable Newstead on its plan to go 100 per cent renewable. He notes that if the money being poured into “Energy for the Regions” – $6800 per house – was spent on solar instead, it would cut an average household’s electricity bills close to zero for over 20 years.
“We really are at a crossroads,” Szatow says. “Every dollar we spend in centralised gas and electricity infrastructure takes us down a road to rising energy prices, non-renewable fuels and extractive business models.
“The other road is locally-owned and managed renewables, with stable or declining energy prices. That’s the one we want to walk down.”