A talk given by Alison Crook, Chair of Enova Community Energy on ABC Radio National Science Show. Part two.

With Robyn Williams on The Science Show

Part one can be found here: "Distributed local renewable energy that’s clean, is the way of the very near future."

The transcript of the talk is below.

Robyn Williams: Now, did you hear AM on Radio National on Monday?

Sabra Lane: Liability and stability of Australia's power grid is now at a critical status, according to a report out this morning from the Energy Security Board. In its annual health check of the grid, the board says extreme weather over the summer and strain on ageing coal-fired power stations have stretched the capacity of the system. On the upside, the rapid growth in wind and solar generation could see renewable energy account for 40% of consumption by 2040, but that is also posing a threat to keeping the lights on.

Robyn Williams: Sabra Lane. So, how will those community energy systems we've been telling you about on The Science Show affect the grid? Well, they will help it, not least by adding what Enova calls solar gardens. And if you don't have a roof of your own or can't afford a full commitment, you can still take part, rather like sharing a community garden and having your own plot. Here's Enova Energy chair Alison Crook.

Alison Crook: Last time I talked about how Enova Community Energy's vision is healthier for us and the environment and contributes to reducing the impacts of climate change. This time I want to talk more about what it might look like and how everyone can participate.

Solar gardens are one important element in our assembly of distributed renewable resources. Overseas, for example in Germany, Denmark and the United States where there is considerably more progress in terms of community-owned mid-sized generation projects, the term 'solar gardens' is usually used to refer to a sizeable collection of solar PV panels which are owned by many community members in the same way that people can own plots in a community garden.

We first started modelling the costs and benefits of such gardens in 2016, with a particular focus on making it possible for people who rent to share in the savings of solar and participate in the renewable energy transition. However, we swiftly found that simply establishing the garden in a friendly field and selling the energy into the existing market and distribution system would be of limited value to participants.

Energy exported to the grid would earn only the market wholesale price at the time of export, and distribution costs (still over 40% of total costs) would be incurred. The savings to be made would be far less than the savings made by having solar on one's own roof.

So, we had to find a new approach. We are doing rooftop solar gardening. The panels go on the roof of an organisation that would like to make savings through using solar PV and has an interest in supporting the community but does not presently want to outlay the funds itself for solar. It also needs to be an organisation that can use most of the solar-generated during sunlight hours. The organisation pays Enova for the solar used at a discount for making their roof available, and all the money received for that energy, plus any excess that has been sold into the grid, is then paid out as credits on their bills to the households associated with the panels, the solar gardens. Enova has obtained a tax ruling to ensure that the bill credits will not be treated as income for the credit recipients. This arrangement continues for a minimum of 10 years, at which time the business or organisation may opt to buy the solar panels, or it can continue for up to 20 years since the panels that will be used have a minimum 20-year lifespan. During this time, any participating gardener may move multiple times but continue to receive benefits, so long as they wish to remain an Enova customer. It is also possible for people to gift a membership to their children or parents.

In this basic solar garden model, householders will pay a membership fee for the number of panels for which they receive the solar credits, and our modelling shows the payback time for each householder is much the same as if the panels were on the households' own rooftops.

Unfortunately, while we have cleared the tax hurdle, we are now trying to clear another regulatory barrier to our model. Even though each garden will be operated through a not-for-profit Enova subsidiary, if we wish to do it more than once or for more than 20 people, it is deemed by ASIC to be a managed investment scheme. This means that for Enova to roll it out, we must engage the provider of a specific purpose Australian financial services licence, or obtain an exemption, so we will launch this model later in 2020.

While we overcome these hurdles, we have been really pleased to launch a social benefit version of the model, and it demonstrates that exciting things really can happen when many elements of the community come together. In this version, the funds are provided by charitable organisations to purchase the panels, so that the solar gardeners who receive the credits on their bills do not in fact have to pay for their panels in the garden. We see that we can roll out this social benefit solar garden model wherever we can find an organisation with a focus on making their rooftops available to assist people, and can find other charitable organisations to make funds available. Right now, we would be interested to work with charitable organisations to use this approach to assist those who have lost their houses in the recent fires. It would be possible to provide both low-cost energy while people were renting and waiting for houses to be rebuilt, and for some years after they moved in.

Microgrids, embedded networks and virtual powerplants are other means that can be used on a community scale to reduce costs and build local resilience, by using and potentially sharing renewable energy. These, again, can be used with or without battery storage, which is gradually becoming more cost-effective. As an aside, if we were to see government subsidy of the kind provided to the fossil fuel industry, we would rapidly see battery storage costs decline.

As I mentioned, Enova has its first pilot microgrid underway in the Byron Arts and Industry Estate. The ultimate aim is to reduce costs through sharing renewable energy that is locally generated, stored and distributed. This project looks to reduce carbon emissions through increased use of renewables, lower power bills, and keep money local. It initially involves us modelling the use patterns of a number of businesses in the estate as they generate energy from rooftop solar panels to power their own buildings and supply excess electricity to do others in the microgrid who may not have the roof space or capital to buy panels.

Participants in the pilot have had individual smart metering devices installed to measure power inputs and outputs. This data will help work out a new pricing structure based on sharing locally generated power. When supply exceeds demand, access will be stored in a centralised battery for reuse by the businesses, or sold externally. The pilot microgrid will remain connected to the main electricity grid in this pilot, which will take place over approximately two years. When finalised, it is hoped that it leads to the formation of a wider, self-sufficient microgrid for the entire estate. There can be lower network and transmission costs and less reliance on transmission altogether.

Such microgrids make sense for industrial estates throughout country regions or within city suburbs, and the concept of sharing batteries at street or substation level, with power available to be drawn on by retailers or distributors, is one whose time has come. We are hearing a great deal about the need to strengthen the grid and build significant new interconnectors. But compared to large-scale generation projects, distributed energy resources reduce the load at any one point of transmission, lessening the need for highly expensive transmission infrastructure.

As cost structures shift, there is room for midscale solar, bioenergy farms using bionutrients, or pumped hydro, owned by communities to service either small, whole towns or larger scale industry. Solar Share in the ACT has raised funds from some 400 local Canberra investors for the Mount Majura solar farm and is in the process of building its first community-owned solar farm for commissioning this year. This does rely on the somewhat different pricing and regulatory structures of the ACT, so until now it has not been replicable in other parts of Australia. But it shows what is possible, and changing cost structures mean community aspirations can be met sooner rather than later.

All these taken together mean that distributed energy resources can change the face of our energy system rapidly, help drive the critically necessary reduction in emissions and strengthen our economies by keeping money in the hands of householders and businesses. We need more effort by governments and regulators to examine the real cost benefits of distributed energy, rather than assuming the answers must be large-scale. Enova Community Energy is playing its part in showing what communities working together can do. So many people today are asking; what can I do to help the environment? One clear answer is that you can share in building a self-sustaining energy future.

Robyn Williams: Alison Crook, who chairs Enova and is a former Australian Businesswoman of the Year, based in northern New South Wales. A scheme that stabilises grids and stops them wobbling.

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