For those of you with reasonable memories, you’ll know the Australian government ran a program for around a decade called the Remote Renewable Power Generation Program or RRPGP. The idea behind the program was that remote off-grid regions or regions with only small grids tended to rely on very expensive diesel fuel for their power needs, and so renewable energy is closer to being a cost-effective option. To illustrate, the cost per megawatt-hour (MWh) for diesel generation is close to $250 to $400, a price that solar with battery storage can match and even beat.
In this respect the mini-grid or off-grid market could act like a beach-head niche for renewables to build-up capability and reduce costs. However, in the end, this niche was a bit too small to really build-up genuine scale. And the world passed us by, deciding to do renewables on a much grander scale in major grids. With PV and wind being rolled out in the tens of gigawatts each year and larger than coal and nuclear installations combined, it made the RRPGP all look a bit quaint.
Well in spite of the government cutting that program back in 2009, the Australian Renewable Energy Agency has decided to have another go, announcing it will run a ‘Regional Australia’s Renewables program’. However its sights are set higher than just reducing the use of diesel.
It has decided that these mini electricity grids could act as ideal test beds to see how far we could push the limits of reliance on renewable energy. Because these remote electricity demand loads are relatively small, you don’t have to install much renewable energy capacity, nor spend much money, before renewables become a very large proportion of total generation.
The hope is that with a relatively modest amount of money (and in the electricity sector $2.2 billion is actually quite modest), we’ll manage to test and learn a great deal about the technologies, tools and practices required for renewables to supply the majority of our power needs on a reliable basis.
Yet we’ve already mastered the technology required for households to go completely off the grid. And as analysis from the Alternative Technology Association demonstrates, this should already make financial sense. In addition there are a number of sites around WA: Coral Bay, Bremer Bay, Denham, Hopetoun and Esperance where wind supplies between 20 to 45 per cent of these towns’ electricity needs, coupled with low-load diesel generators or gas in the case of Esperance.
The projects that ARENA funds will need to push the envelope even further. They’ll also need to employ a mixture of technologies beyond these already understood options. Diesel has been shown to be a remarkably flexible complement to renewables, but it’s just too expensive for large-scale grid applications unless only used for emergencies. It will also be interesting to see whether bioenergy could play a role as the balancing/back-up fuel.
The other nut they’ll want to crack is large mining operations.
So far the mining sector has been focussed on speed to implement and reliability; this has meant diesel generators and gas where they can get it. With boom commodity prices on offer, management attention has been focussed on production as the first, second and third priority. Solar might not look too bad economically, but it’s seen as a distraction or even a risk to the main game of maximising production.