RepoRt - Legislative Assembly · developing a green energy industry, reducing greenhouse gas...

Roadmap to Renewable and low emission eneRgy in Remote Communities

by the gReen eneRgy taskfoRCe

RepoRt

PAGE i


CovEr Photos (lEft to riGht):Solar dishes at the Lajamanu Solar Power StationFlat Plate PV panels at Jilkminggan Solar Power Station Solar dishes at the Ntaria (Hermannsburg) Solar Power StationPhotos courtesy of Power and Water.


ContEnts

1. MEssAGE froM thE ChAir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2. ExECutivE suMMAry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

3. introduCtion And objECtivEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

3.2 terms Of reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

4. bACkGround . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144.1 target cOmmunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

4.2 available resOurces and renewable energy technOlOgies fOr remOte cOmmunity electricity generatiOn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

5. intEGrAtinG rEnEwAblE EnErGy into rEMotE diEsEl PowEr stAtions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

6. CoMPonEnt 1: roll-out of 10Mw of PhotovoltAiC CAPACity to northErn tErritory rEMotE CoMMunitiEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246.1 backgrOund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

6.2 actiOns required tO rOll Out 10 mw Pv (and technical PrOPOsal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

6.3 indigenOus ecOnOmic develOPment and caPacity building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

6.4 nt caPacity building and industry develOPment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

6.5 funding and financial mOdels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

6.6 OutcOmes including ecOnOmic benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

7. CoMPonEnt 2: towArd 100% rEPlACEMEnt of diEsEl As A rEMotE CoMMunity PowEr sourCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367.1 backgrOund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

7.2 OutcOmes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

7.3 technical PrOPOsal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38

7.4 i ndigenOus ecOnOmic develOPment and caPacity building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

8. ConClusions And rECoMMEndAtions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

9. biblioGrAPhy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44


10. APPEndiCEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4510.1 10 mw PhOtOvOltaic rOll-Out: selected cOmmunities and estimated caPacity required . . . . . . . . . . . .45

10.2 10 mw PhOtOvOltaic rOll-Out: caPacity calculatiOn and mOdelling assumPtiOns . . . . . . . . . . . . . . . . . . . .47

10.3 backgrOund and nt caPacity and caPability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

10.4 building nt caPacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

10.5 POwer and water cOrPOratiOn’s energy sOurce strategy grOwth tOwns and indigenOus cOmmunities: executive summary 2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

10.6 renewable energy funding OPtiOns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

10.7 descriPtiOn Of selected terms used in the rOadmaP rePOrt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62

10.8 maximising the effectiveness and POtential Of renewable energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

10.9 schematic Of cOnventiOnal POwer statiOn vs stabilised renewable energy POwer statiOn . . . . . .65

tAblEstable 1: glOssary Of terms and acrOnyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

table 2: designated grOwth tOwns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

table 3: cOmParisOn Of different OwnershiP mOdels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

table 4: summary Of the elements Of stage 1: 10mw Pv rOll-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

table 5: bOundary cOnditiOns assuming a benchmark Of arOund 10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

table 6: estimated budget fOr the PrOPOsed first stage Of the secOnd cOmPOnent tOwards 100% renewable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

table 7: PrOPOsed Pv size fOr each cOmmunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

table 8: designated nOrthern territOry grOwth tOwns with electricity cOnsumPtiOn and energy sOurces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

table 9: mOdelling assumPtiOns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

table 10: PrOjects funded by the rrPgP frOm 2001 tO 2009 in the nt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

table 11: number Of PrOjects funded by the rrPgP frOm 2001 tO 2009 in the nt . . . . . . . . . . . . . . . . . . . . . . . . . . . .53

fiGurEs figure 1: visual rePresentatiOn Of the rOadmaP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10a

figure 2: energy sOurces used by ies ltd Pty tO PrOvide essential services tO indigenOus cOmmunities in the nt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

figure 3: indigenOus cOmmunities currently nOt serviced by Pwc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

figure 4: tyPical lOad PrOfile (24h) fOr the ngukurr cOmmunity, 30% PenetratiOn . . . . . . . . . . . . . . . . . . . . . . . .20

figure 5: tyPical lOad PrOfile (24h) fOr the ngukurr cOmmunity, 100% PenetratiOn . . . . . . . . . . . . . . . . . . . . . . .21

figure 6: detailed timeline Of the 10mw sOlar Pv rOll-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

figure 7: Pwc/ies caPital asset develOPment OPtiOn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

figure 8: Pwc/ies energy Purchase PrOgram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

figure 9: darwin terminal diesel gate Price (excl excise & gst). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

figure 10: installed cOst vs. diesel Price escalatiOn imPact On irr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

figure 11: detailed timeline Of the strategy tOward 100% diesel rePlacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65


tErMs And ACronyMsThe report adopts many of the terms and acronyms commonly used in the renewable energy sector. The terms with an asterisk (*) are more fully described Appendix 10.8.

TAble 1: Terms and acronyms

AbbreviATion explAnATionACre Centre for Renewable EnergyAnU Australia’s National University, CanberraArC Australian Research CouncilASi Australian Solar Institutebp Basis point, the interest rate that is equal to 1/100th of a percentage point

per annumbscf Billion standard cubic feetCAT Centre for Appropriate TechnologyCCS Carbon Capture and StorageCDU Charles Darwin UniversityCei Clean Energy InitiativeCnG Compressed natural gasCo2-eq Carbon-dioxide equivalents: measure of greenhouse gas emissionsCprS Carbon Pollution Reduction SchemeCpv Concentrating PhotovoltaicCrC Cooperative Research CentresCSG Crystalline Silicon on GlassCSiro Australia’s Commonwealth Scientific and Industrial Research OrganisationCSp Concentrating Solar PowerCST Concentrating Solar Thermalct Cents of dollarsDCM Department of the Chief MinisterDKA Desert Knowledge AustraliaDor Department of ResourcesDSC dye solar cellee-oz ElectroComms and Energy Utilities Industry Skills Council Ltd trading as EE-Oz

Training Standards is ‘a not-for-profit’ industry training and skills standards and advisory organisation.

eGS Enhanced Geothermal SystemseiF Education Investment FundeSo Essential Services OperatorGHG Greenhouse gases include water vapour, carbon dioxide, methane, nitrous

oxide, hydrochloroflourocarbons, ozone, hydroflourocarbons, perfluorocarbons and sulphur hexafluoride

GW Gigawatt = 10 to the power of nine wattsGWh Giga Watt hour, 10 to the power of nine watt hoursha Hectare


HSA Hot Sedimentary AquiferieD Indigenous Economic Developmentiep Indigenous Employment ProgramieS Indigenous Essential Servicesirr Internal rate of returnkW Kilowatt = 10 to the power of three wattskWp Kilowatt under full solar radiation (peak power)kWh Kilowatt hours = 10 to the power of three watt hourslnG Liquefied natural gaslpG Liquefied petroleum gasmmbbl Million BarrelsMW Megawatt = 10 to the power of six wattsMWh Megawatt hours = 10 to the power of six watt hoursMJ/m2 Megajoules = 10 to the power of six joules per square metrenbn National Broadband NetworknG Natural gasnreTAS Department of Natural Resources, Environment, the Arts and SportsnT Northern TerritorynTG Northern Territory GovernmentnTU Northern Territory UniversityppA Power Purchase Agreementppp Public-Private Partnershippv Photovoltaic cells that convert sunlight directly into electricitypWC Power and Water Corporation Pty Ltdr&D Research and Developmentre Renewable energyreT* Renewable Energy TargetreC* Renewable Energy CertificatesrrpGp Renewable Remote Power Generation Programt Tonnet/ha Tonne per hectareUnSW University of New South Wales, Sydney


1. MEssAGE froM thE ChAir

In late 2009, the Chief Minister of the Northern Territory formed the Green Energy Taskforce and charged us with developing a Roadmap for the development of the renewable and low emission energy sector and products in the Territory.

This report addresses the Taskforce’s first Term of Reference: to develop a proposal for substituting a large component of diesel generation with renewable and low emissions energy in remote communities. In undertaking this work, the Taskforce was also asked to consider how to facilitate the development of a Territory renewable energy industry, and also maximise Indigenous engagement.

In this report, the Green Energy Taskforce encourages the Northern Territory Government to adopt a two-pronged strategy to accelerate the penetration of renewable energy into remote communities.

Firstly the Taskforce recommends the integration of solar PV capacity into 46 diesel power stations, up to a level that produces significant savings in diesel but does not require expensive modifications to generators or installation of energy storage equipment or infrastructure.

The aim of the second strategy is to develop a clear plan to move the Territory toward 100% diesel substitution by optimising across all renewable sources and low-emission technologies as well as applying latest technology to manage demand. This will involve the development of a knowledge base to inform the design, construction, operation, monitoring and evaluation of the performance of a pilot power station.

We recognise that the Territory does have considerable experience and expertise, in both the private and public sectors, in gas and renewable energy in power generation. There is a strong history of renewable energy technology development and production in urban and remote areas and excellent capability to expand the number of renewable energy systems deployed.

The approach being recommended builds on existing capability and knowledge to take immediate steps forward, while concurrently developing the plan to achieve more ambitious gains. To achieve maximum benefit for the Territory, it is vital that the implementation of these strategies build on and strengthen existing local capability – for individuals, communities and companies.

I would like to thank the members of the Taskforce for their active and valuable contributions through the work of meetings and the development of this report.

In addition, I would like to recognise the significant support provided by members of the Department of the Chief Minister.

Christine CharlesChair, Green Energy Taskforce


2. ExECutivE suMMAry

whErE ArE wE now?

In 2009, over 31 million litres of diesel fuel was used to generate electricity for the major remote communities in the Northern Territory, and demand for electricity across these locations is expected to increase by a further 25% over the next three (3) years.

The NT has a strong history of renewable and low emissions energy production in urban and remote areas and the capability to expand the number of renewable and low emission energy systems deployed. Northern Territory organisations with experience and expertise in researching and implementing renewable energy include public sector entities, private sector companies, not-for-profit organisations and academic institutions.

Up to this point, a total of 669 renewable energy generating systems have been funded in the Northern Territory through the Renewable Remote Power Generation Program (RRPGP), an Australian Government program that closed in 2009. Many of the systems are small in scale but large-scale renewable energy systems have also been deployed across Yuendumu, Hermannsburg, Lajamanu, Kings Canyon, Bulman and Jilkminggan.

Three new photovoltaic (PV) systems to be deployed under the RRPGP at Ti Tree, Kalkarindgi and Alpurrurulam in 2011 will be more advanced in terms of the diesel-PV hybrid configuration and high level of PV penetration (i.e. replacement of diesel-power with renewable solar-power). Lessons can be learned from this project to support future PV deployment and broader expansion of the initiatives proposed in this report.

The renewable energy technologies currently available/deployable in the Northern Territory are PV, wind and solar thermal systems. While PV systems are technically proven and becoming more economic (with falling PV panel prices), the primary issue for solar thermal is that the economic scale is beyond what is being considered for remote communities. The wind resource in the Territory is limited, and although other resources such as geothermal and tidal energy are abundant, the applicable technologies have not yet been commercialised. Bio-fuels have been commercialised to a limited extent.

whErE ArE wE GoinG?

The Northern Territory Government, through its Climate Change Policy, has committed to replacing diesel as a primary source of power generation to remote towns and communities, developing a green energy industry, reducing greenhouse gas contributions and assist Power and Water Corporation (PWC) to meet its Renewable Energy Target (RET) obligations through local sources of renewable energy.

To identify how this can occur, the Green Energy Taskforce was established by the Chief Minister to provide expert advice (including through this Roadmap Report) on strategies, incentives, and pathways to develop renewable and low emission energy and products in the Northern Territory. The first major task identified in the Terms of Reference for the Taskforce has been to develop a proposal for substituting a large component of diesel generation with low emissions and renewable energy in remote communities by 2020.

The Roadmap is however broader than just electricity generation, as it will also identify opportunities for skills transfer, training and management in communities, Indigenous economic development, ‘Closing the Gap of Indigenous Disadvantage’ and remote service delivery reform under the ‘Working Futures’ policy, through the development of a low emissions and renewable energy industry in the Northern Territory.


how will this hAPPEn?

The Taskforce encourages the Northern Territory Government to adopt a two-pronged strategy to accelerate the penetration of renewable energy into remote communities.

The Taskforce acknowledges that the Power and Water Corporation’s Energy Source Strategy - Growth Towns and Indigenous Communities is an important contributor to a large part of the diesel replacement objective, aiming to achieve a savings of 5 million litres of diesel per year, through substitution with LPG, pipeline gas, photovoltaic installations and grid extensions.

To expedite achieving the challenging goal of 100% diesel substitution, concurrent strategies will need to be pursued.

The first component of the Roadmap, installing 10 MW of solar power generation in remote communities, is a proposal to rapidly substitute a significant proportion of diesel generation across 46 Northern Territory remote communities with renewable energy, which will save 4.5 million litres of diesel each year without requiring costly conversions of equipment and infrastructure.

Secondly, a much broader approach needs to be taken which includes low-emission fuels, demand-management and other options, to achieve substantially more diesel replacement. These are described in the second component of the Roadmap: “Toward 100% diesel replacement.”

thE first CoMPonEnt is to roll-out 10Mw of Pv to 46 rEMotE CoMMunitiEs

This first step involves the integration of solar PV capacity into 46 diesel power stations, up to a level that produces significant savings in diesel but does not require expensive modifications to generators or installation of energy storage equipment or infrastructure (e.g. batteries, fly wheels, etc.). These communities do not have, nor are there immediate plans to install, significant renewable energy systems.

A roll-out of 10MW of PV is proposed which will reduce diesel use by 17%, supply approximately 30% of peak demand across the selected communities and also meet 7% of PWC’s cumulative RET obligation to 2030.

This level of renewable energy penetration is recommended as it does not require expensive storage or modifications to existing power plants and as such represents the least-cost renewable energy option for significant diesel fuel savings. Variability in renewable energy output at this level is within performance thresholds of the existing diesel generation plants.

(Note: The potential for a complementary energy efficiency program will be explored later this year by the Taskforce, to further reduce diesel use and maximise benefits from diesel substitution in light of increasing demand over time.)

It is anticipated that this first component would take 3-4 years to implement, with a total cost of $60 million.

The technical and economic viability of other energy sources including pipeline natural gas, liquefied petroleum gas (LPG), bio-diesel, compressed natural gas, liquefied natural gas and very high penetration PV will continue to be monitored by existing internal processes.

However, to be successful in achieving 100% diesel substitution, and to achieve this target both efficiently and effectively, will require the integration of a range of fuel sources and technologies.


thE sECond CoMPonEnt is About MovinG towArd 100% substitution of diEsEl GEnErAtion in nt rEMotE CoMMunitiEs

The second component of the Roadmap proposes defining options for a more ambitious target of moving toward 100% substitution of diesel generation with renewable energy and low emissions fuel in remote communities and would be pursued concurrently with the first component (roll-out of 10MW of renewable energy in 46 remote communities).

Maximisation of the effectiveness and potential of renewable energy in off-grid power stations will involve optimisation to suit the characteristics of the renewable resource whilst ensuring security of supply. Understanding how to plan and achieve 100% renewable and low emission energy generation is a prerequisite to building sustainable remote communities in the Northern Territory.

Understanding how to address immediate targets such as diesel substitution as well as our longer-term ability to secure the Territory’s energy future is the basis for this component of the Roadmap.

stAGE 1 The initial stage of this component is a research-based feasibility program. This feasibility program would run over 2.5 years, and would collect the extensive data set (through trials and monitoring) that is needed to design and build systems that can maximise the use of renewable energy in remote communities.

To do this, the development and use of a sophisticated modelling tool, appropriate for the Territory context, will be required to analyse the specific generation and consumption characteristics of each community. This tool would provide optimal settings for management and integration of all energy production system components to achieve least-cost 100% renewable energy and low emission integration.

Establishing an energy flow modelling tool, appropriate to the Territory context, is important for identifying and implementing the right mix of systems that will contribute to securing the Northern Territory’s energy future. Many examples around the world can be cited for the roll-out of renewable energy projects; however, large scale systems with near 100% renewable energy contribution are rarely achieved. Those that have been completed have been done by Territory based organisations and it is this experience that the Task Force hopes to build on to achieve world leading know-how and intellectual property (IP).

As the contribution level of renewable energy in the grid is increased, the likelihood of the system becoming unstable increases. This is because the renewable energy source varies dramatically with climatic influences, such as cloud cover in the case of PV solar. The modelling tool will enable the examination of both energy flow and dynamic stability aspects of the proposed systems. The tool will be available for widespread use across the Territory and for future export opportunities. This approach is similar to that of the National Energy Management Company’s simulation of the national grid. Community ‘mini grids’ require the same consideration when significant renewable energy contribution is contemplated.

The modelling tool will also identify and integrate demand management (including energy efficiency) approaches, without which 100% diesel substitution may not be achievable. By matching renewable energy supply to demand, it is possible to maximise the effectiveness of the diesel fuel substitution by renewable energy. This real time control system actually adjusts the operation of all components connected to the grid thus producing a “Smart Grid” solution, which is one option for managing demand. This is not to be confused with smart meters which can be a small element of such a system. The final outcome of an optimised system utilising “Smart Grid” control is a least cost solution toward 100% diesel fuel replacement as it minimises the requirement for energy storage.


stAGE 2 The second stage of moving toward the roll-out of 100% diesel substitution is to use the modelling tool to design, construct, operate, monitor and evaluate performance of a pilot power station (the implementation and evaluation stage). This will road-test the modelling tool and will allow detailing of the specific requirements (and costs) of each subsequent roll-out location in site-specific project plans.

ConClusions And rECoMMEndAtions

This Roadmap builds on the Northern Territory’s strong history of renewable and low emission energy production. The proposal takes a two-pronged approach, with the first component aiming to significantly reduce reliance on diesel as an energy source for remote communities, as well as complementing current and planned activities of the Power and Water Corporation by supplementing existing generation with the rollout of an additional 10 MW of solar photovoltaic (PV) power. The second component of the Roadmap is intended to design, construct and evaluate an advanced pilot renewable energy power station tailored to environmental, social, demand/supply and other variables characterising the community at the chosen site. This power station will be built using a Territory-developed methodology and modelling tool that can identify the best combination of renewable energy and low emissions options for application at any other sites in the Territory.

The Taskforce recognises that Power and Water Corporation will continue the implementation of the Energy Source Strategy for Growth Towns and Indigenous Communities involving

»» diesel substitution with liquid petroleum gas;

»» diesel substitution with pipeline gas;

»» diesel substitution with high penetration PV; and

»» efficiency improvements via establishment of regional grids. [Section 6.1]

The specific Recommendations comprising the Roadmap are listed below:

1. recommendation 1 (Component 1): Roll-out 10MW of renewable photovoltaic power (PV) across 46 remote communities and achieving 17% replacement of diesel [Section 6.1]; and

2. recommendation 2 (Component 2): Pursue 100% diesel replacement as a power source in remote communities, through development of a modelling tool to design optimal low emission and renewable energy power stations in remote communities, including building and evaluating a pilot station to develop plans for roll-out to other communities [Section 7.1].

The recommendations for Component 1 include the following elements:

y recommendation 1a. Develop a procurement plan, incorporating bulk equipment purchase to minimise costs [Section 6.2];

y recommendation 1b. Develop an implementation plan to deploy PV hardware across three regions (Southern, Barkly-Katherine, and Northern) in 3-5MW packages over three years to maximise and incorporate local industry involvement and capacity-building to secure the longevity of an expanded local renewable energy industry [Section 6.2]; and

y recommendation 1c. Develop a five-year plan in conjunction with relevant industries and the Indigenous Economic Development (IED)Taskforce to cover

»» development of a school to job continuum of training and education;

»» fostering of business skills;


»» business mentoring plan;

»» tailored local economic development plans; and

»» Identify appropriate development partnerships [Section 6.3].

The recommendations for Component 2 include:

y recommendation 2a. Develop a Procurement Plan;

y recommendation 2b. Provide tools, instruments and meters appropriate for essential data collection (for development of the modelling tool);

y recommendation 2c. Build a multi-dimensional modelling tool to analyse site data and provide an optimal solution (e.g. smart grid technology); and

y recommendation 2d. Implement the optimal solution as a pilot [all Section 7.3].

In addition the following recommendations will support both Components:

y recommendation 3. Determine a transitional strategy to maintain the continued delivery of electricity services to Indigenous communities, outstations and homelands in advance of cessation of federal funding in June 2012. The strategy should consider establishing service delivery standards, developing a policy framework on renewable energy, coordination between Bushlight and the Northern Territory Government’s essential services program and ongoing funding requirements. [Section 4.1]

y recommendation 4. The Green Energy Taskforce proposes that the IED Taskforce work with its members to further develop a robust program addressing both employment and business development, in the proposed 10 MW roll-out. [Section 6.3]

y recommendation 5. It is also proposed that the Green Energy Taskforce participate in the upcoming IED Future Forums to provide information and receive feedback on the proposed 10MW roll-out and on the development of the broader Territory Energy Roadmap. [Section 6.3]

y recommendation 6. The NT Government to prepare a funding strategy to support the development of renewable energy projects in the NT, including initiatives in this Roadmap Report. This funding strategy will also investigate options for federal grants through existing programs such as the Renewable Energy Future Fund. [Section 6.5]

y recommendation 7. The IED Taskforce to work with its members to further develop a robust program addressing both employment and business development, in the proposed roll-out of feasibility, modelling, planning and other stages of deployment of advanced energy generation systems in remote NT communities. [Section 7.4]

y recommendation 8. The Green Energy Taskforce to develop terms of reference for a separate report on the potential for energy efficiency measures to extend the levels of diesel replacement anticipated through initiatives of this Roadmap. [Section 5]


page 10a

$? million

Integrate solar PV capacity into 46 diesel stations, up to a level that produces significant savings in diesel but does notrequire expensive modifications to generators or installationof costly energy storage equipment or infrastructure.

Cabinet Submission Approvalfor Component 1 andComponent 2 ( Stage 1 )

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Figure 1: Visual representation of the roadmap

roAdMAP to rEnEwAblE And low EMission EnErGy in rEMotE CoMMunitiEs

PAGE 11

ChAPtEr 3 ProvidEs bACkGround on EstAblishMEnt And objECtivEs of thE ChiEf MinistEr’s GrEEn EnErGy tAskforCE, inCludinG its PrioritiEs for 2010: PrEPArAtion of rEPorts on (i) AChiEvinG A siGnifiCAnt lEvEl of substitution of diEsEl-bAsEd PowEr GEnErAtion in rEMotE CoMMunitiEs with rEnEwAblE And low EMission EnErGy sourCEs And (ii) EvAluAtion of thE rElAtivE MErits, fEAsibility And Costs of rollinG-out A rAnGE of rEnEwAblE tEChnoloGiEs ACross thE northErn tErritory.


3. introduCtion And objECtivEs

This report has been prepared by the Green Energy Taskforce with support from Charles Darwin University. The information contained in this report will be provided to the Chief Minister to guide planning for future programs of work, including the development of a renewable and low emissions energy plan for remote communities, and a strategy for renewable technologies in the NT.

3.1 objECtivEs The major objective of this report is to develop a Roadmap for substituting a large component of diesel generation with renewable energy and low emissions technology in remote communities by 2020, including financing options.

The Roadmap identifies opportunities for skills transfer, training and management in communities to progress Government’s broader objectives of Indigenous economic development, ‘Closing the Gap of Indigenous Disadvantage’ and remote service delivery reform under ‘Working Futures’ policy.

3.2 tErMs of rEfErEnCE The Northern Territory Government has committed to the expanded national Renewable Energy Target (RET). The RET is a transitional measure to assist Australia’s transformation to a low emissions economy. The RET scheme will end in 2030.

Pursuant to the RET, wholesale electricity retailers generating over 100 MWh of electricity per annum will incur liabilities under the RET. The Power and Water Corporation’s generation in Darwin will be the Territory’s only entity to incur a liability under the RET, estimated to total 4.5 million Renewable Energy Certificates by 2030.

The Green Energy Taskforce was established by the Chief Minister to provide expert advice on the development of the renewable and low emission energy sector and products in the Territory. In particular the main outcome of the work of the Taskforce is to facilitate the construction and successful operation of large, medium and small renewable energy generation in the NT by 2015, capable of producing around 300 GWh per annum by 2020.

Specific initial tasks for the Green Energy Taskforce are to

y Develop by 30 June 2010 a detailed proposal for substituting a large component of diesel generation with renewable and low emissions energy in remote communities, including financing and funding options; and

y Prepare by 31 December 2010 an evaluation of the relative merits, feasibility and likely costs of the potentially available renewable technologies to be used in the NT, including geothermal, solar, bio-fuel and tidal.

sCoPE

This report delivers on the first “Specific Initial Task” in the Taskforce’s Terms of Reference.

Charles Darwin University was engaged to prepare a consolidated report from submissions from multiple contributors on the Taskforce and elsewhere, according to an agreed structure developed by the Taskforce.


ChAPtEr 4 dEsCribEs whiCh of thE northErn tErritory’s MAny rEMotE CoMMunitiEs, outstAtions And hoMElAnds ArE bEinG ConsidErEd for inClusion in initiAl ProGrAMs rECoMMEndEd by thE GrEEn EnErGy tAskforCE to rEPlACE diEsEl-bAsEd PowEr with rEnEwAblE And low-EMission EnErGy sourCEs And inCludEs disCussion on A vAriEty of AvAilAblE oPtions.

PAGE 13


4. bACkGround

4.1 tArGEt CoMMunitiEs The Municipal and Essential Services (MUNS) Program, administered by the Northern Territory Department of Housing, Local Government and Regional Services (DHLGRS), has identified 555 Indigenous communities and outstations in the Territory. Of these, 72 communities and 82 outstations are serviced by the Power and Water Corporation or its not-for-profit subsidiary: Indigenous Essential Services P/L (IES)(Figure 2).

Twenty of the 72 communities have been identified by the Northern Territory and Australian Governments as “Territory Growth Towns,” which are being targeted for investment to enhance services, buildings and facilities, based on coordinated planning and design (Table 2). Two of these (Borroloola and Elliot) are serviced by PWC; the remainder, by IES. More information on Growth Towns can be found at the following website: http://workingfuture.nt.gov.au/growth_towns.html

The 401 outstations and homelands not serviced by PWC or IES (555 – 154) are delivered electricity services through the MUNS Program and a range of other service providers, with financial assistance through grants from DHLGRS. These sites are not being addressed by the Roadmap proposals which focus on the pool of 72 communities and their 20 Growth Town subset. Future Government initiatives (described below) will address these outstations and homelands.

Fifty-three diesel power stations provide electricity to the Growth Towns and other communities serviced by PWC or IES. Seven of these already have significant solar capacity installed or planned (Ti Tree, Kalkarindgi, Alpurrurulam, Lajamanu and Yuendumu) or will be converted from diesel to gas (Hermannsburg and Wadeye). This leaves 46 diesel power stations for which renewable power alternatives have not been addressed. (Note, however, that PWC’s Energy Source Strategy includes replacement of 30% of diesel power with LPG over the next five years.) it is these 46 communities that are being targeted in this Roadmap to diesel replacement.

TAble 2: Designated Northern Territory Growth Towns

CoMMUniTy reGion ServiCeD by

1 Ali Curung Tennant Creek IES2 Angurugu/Umbakumba Groote Eylandt IES3 borroloola Gulf / Barkly PWC4 Daguragu/Kalkarindji Katherine IES5 elliott Tennant Creek PWC6 Galiwin’ku East Arnhem / Elcho Island IES7 Gapuwiyak Arnhem Land IES8 Gunbalanya Arnhem Land IES9 Hermannsburg Alice Springs IES10 Lajamanu Katherine IES11 Maningrida Arnhem Land IES12 Milingimbi Arnhem Land IES13 Nguiu Tiwi Island IES14 Ngukurr Arnhem Land IES15 Numbulwar Arnhem Land IES16 Papunya Alice Springs IES17 Ramingining Arnhem Land IES18 Wadeye Katherine IES19 yirrkala Arnhem Land IES20 Yuendumu Alice Springs IES


FiGUre 2: Energy sources used by IES Pty Ltd to provide essential services to Indigenous communities in the NT


The Commonwealth has signalled that it would prefer to transfer responsibility and funding for provision of municipal and essential services to all Indigenous communities (including outstations and homelands) to all jurisdictions by June 2012. A national audit of municipal and essential services which will guide negotiations about any new funding arrangements will be finalised in the near future. The Northern Territory Government intends to use the national process to argue for on-going and additional funding to support provision of municipal and essential services to Indigenous communities. New national arrangements need to be in place by the end of the 2011-12 financial year.

A planned transition strategy should be developed in the NT, taking into consideration

y Service delivery standards in small remote communities (currently non-existent);

y Policy framework concerning renewable energy in small remote communities;

y Coordination between Bushlight and Northern Territory government essential services program;

y Coordination between Bushlight and PWC; and

y Ongoing funding requirements (determined via resolution of the above). [recommendation 3]

rEMotE CoMMunity PowEr suPPly

The Northern Territory’s electricity network is not linked to that of any other State, nor is there a Territory-wide network. Instead, the NT electricity market consists of three separate networks, namely the Darwin-Katherine grid, the Alice Springs network, and Tennant Creek grid. IES purchases electricity from the PWC power grids for 12 communities.

The combined capacity of all natural gas powered stations in the three separate networks in the NT equals 453.7 MW, with 1,739GWh of electricity generated in 2009. The associated greenhouse gas emissions total 1,102,894t CO2-eq or 70% of all GHG emissions from electricity generation in the NT.

The majority of remote communities are supplied by isolated diesel power stations. IES owns the 53 diesel power stations identified above. The total installed generation capacity at the Growth Towns is approximately 46MW, and 25MW at other IES communities. IES also purchases electricity from the Nhulunbuy power grid for two communities and from the GEMCO power grid on Groote Eylandt for one community.

There are over six hundred small scale renewable energy systems deployed throughout the Northern Territory, with many of these servicing outstations. There is also approximately 1MW of photovoltaic system capacity deployed across Yuendumu, Hermannsburg, Lajamanu, Kings Canyon, Bulman and Jilkminggan.

New PV systems are to be deployed at Ti Tree, Kalkarindgi and Alpurrurulam in 2011. This is a world-first project in terms of the diesel-PV hybrid configuration and high level of PV penetration (i.e. replacement of diesel with renewable solar power). Invaluable experience and understanding will be gleaned through this project to support future PV deployment and system expansion.

Further detail is provided at Appendix 10.4.


4.2 AvAilAblE rEsourCEs And rEnEwAblE EnErGy tEChnoloGiEs for rEMotE CoMMunity ElECtriCity GEnErAtion

The whole of the NT experiences high intensities of solar irradiation throughout the year. PV and solar thermal systems are therefore well-suited to the Territory. While existing PV systems are technically proven and becoming more economic in light of to falling PV panel prices, large scale solar thermal systems are still in the early deployment stage, with high establishment costs.

The wind resources of the Territory are limited but small scale wind-based electricity generation might be possible in areas like the Barkly Tableland. Wind technologies are mature and commercially proven. However, the economic and technical advantages of implementing wind systems, compared with other options, for remote community electricity generation requires further investigation.

Biomass is plant matter commonly grown to use as fuel to generate electricity or produce heat. The areas of high-quality agricultural soil within the NT are limited but there is potential for electricity generation from existing biomass; however, biomass infrastructure geared toward remote community electricity supply is not currently in place.

Biofuel can be produced in the Territory using imported feedstock and existing processing infrastructure, and is also available for purchase from interstate. Biofuels are a wide range of fuels which are in some way derived from biomass. The term covers solid biomass, liquid fuels and various biogases. Biogas typically refers to a gas produced by the biological breakdown of organic matter in the absence of oxygen. Biodiesel could feasibly be used for diesel displacement and the cost of doing so will continue to be monitored through the Power and Water Energy Source Strategy annual review process. The technical viability of other biofuel options has not yet been demonstrated in the Northern Territory. (Details on this PWC Strategy are in Appendix 10.6.)

The Territory has resources for geothermal generation systems. Geothermal power is power extracted from heat stored in the earth. This geothermal energy originates from radioactive decay of minerals or solar energy absorbed at the surface. The high tidal velocity along its northern coast lines may also be suitable for electricity generation. But both tidal and geothermal energy technologies are still immature and high in cost.

The renewable energy technology considered in this report for the purpose of substituting electricity generation from diesel in small communities is PV. Other technologies are either not yet commercially proven or a lack of resources limits the potential in a wide-scale roll-out in NT communities.


FiGUre 3: Indigenous communities currently not serviced by PWC

roAdMAP to rEnEwAblE And low EMission EnErGy in rEMotE CoMMunitiEs

PAGE 19

ChAPtEr 5 ExPlAins thE ChAllEnGEs AssoCiAtEd with MAxiMisinG thE substitution of diEsEl As A PowEr sourCE with rEnEwAblE EnErGy sourCEs And dEsCribEs how this MiGht bE AChiEvEd in rEMotE CoMMunitiEs of thE northErn tErritory in thE futurE. it ProvidEs thE bACkGround And bAsis for thE two initiAtivEs ProPosEd in this rEPort: (i) iMMEdiAtE roll-out of 10Mw of solAr PhotovoltAiC (Pv) CAPACity to rEMotE CoMMunitiEs (CoMPonEnt 1) And (ii) dEvEloPMEnt of othEr oPtions to AChiEvE 100% rEPlACEMEnt of diEsEl bAsEd PowEr (CoMPonEnt 2).


5. intEGrAtinG rEnEwAblE EnErGy into rEMotE diEsEl PowEr stAtions

30% PEnEtrAtion by rEnEwAblE EnErGy systEMs

While there are many examples of 100% renewable power systems, and, in particular, photovoltaic (PV), including many in the NT, these types of systems generally rely on significant battery storage which proves to be unsustainable and uneconomic as system sizes increase. Consequently most current research centres on trying to maximise the PV penetration (i.e. contribution relative to other power sources) at certain times of day, with a view to reaching 100% at the most opportune times, for example, at times of peak PV output.

However, as the proportion of renewable energy increases as a percentage of the overall supply, the power system requires additional support and management to accommodate the inherent renewable energy source variability coupled with the varying community load profile.

Operational experience has confirmed that by adding solar capacity equivalent to approximately 30% of load, substantial reduction in peak load and diesel consumption can be achieved, without requiring significant changes to the diesel power station (equipment, infrastructure, etc.).

The figure below indicates the relative contribution of the PV system to a typical community demand profile, in this case, Ngukurr.

FiGUre 4: Typical load profile (24h) for the Ngukurr community, with 30% penetration by PV


Advantages of this level of penetration configuration include

y There is no requirement for short-term (bridging power) storage because variability in PV output will not substantially affect grid stability (system frequency and voltage) at or below this level of penetration.

y There is no requirement for long term (energy) storage because the diesel/ gas generation will continue to meet community base load. The configuration will not displace any diesel generation capacity -- only amount of fuel consumed. Diesel generation capacity will meet the full load during periods of intermittent solar system output and overnight.

y As a consequence of there being no requirement for storage or controlled output smoothing, system costs are minimised.

y There is minimal requirement for modification to the generator operation.

y The system capacity can be increased over time at a later stage when the cost of storage and control equipment may have reduced and demand management opportunities have been identified.

MAxiMisinG rEnEwAblE EnErGy PEnEtrAtion

For renewable energy technologies to be most economically effective, the construction of renewable energy installations should, to the greatest extent possible, minimise controls and storage (balance-of-system) infrastructure to support the particular generation characteristics of renewable energy technologies relative the typical load profiles expected within remote communities.

The graph below shows the typical summer and winter load profiles for Ngukurr. The total daily load from Ngukurr in its peak month, November, is approximately 14.4 MWh per day.

As can be seen, there is a significant disparity between the load curve of the community and the generation curve of the PV system. Typically, the disparity would be managed by the use of diesel generators, or other forms of energy storage, for periods of low renewable resource with a view to maximising the use of renewable energy at the peak output period. However, this has not yet been achieved anywhere in the world at the scale of the remote communities considered in this Report.

FiGUre 5: Typical load profile (24h) for the Ngukurr community, with 100% penetration PV, with fixed and tracking PV systems


Maximising the effectiveness and potential of renewable energy, in general, and PV, in particular, in off-grid power stations, requires demand-supply optimisation to suit particular characteristics of the renewable resource whilst ensuring security of supply as illustrated in the diagram below:

The key barriers to this optimisation can be broken into the following four areas:

1. Behavioural influences on consumption

2. Technical influences on consumption

3. Power system stability

4. Environmental variability

To achieve the full potential of any renewable energy generation solution, these demand-management and energy efficiency barriers need to be addressed.

Demand-management and energy efficiency initiatives are therefore integral to achieving the full potential of any renewable energy generation solution, and the Taskforce will be addressing these issues in its continuing work as advisors to the Government on strategies, incentives, and pathways to make the Territory a world leading provider of green energy in remote areas.

It is therefore recommended that the Green Energy Taskforce develop Terms of Reference for a separate report on the potential for energy efficiency measures to extend the levels of diesel replacement anticipated through initiatives of this Roadmap. [recommendation 8]

A more detailed discussion of these barriers and related issues can be found in Appendix 10.8.


PAGE 23

ChAPtEr 6 dEsCribEs thE rEquirEMEnts And rECoMMEndEd APProACh for rEPlACinG diEsEl PowEr with rEnEwAblE EnErGy ACross 46 rEMotE CoMMunitiEs in thE northErn tErritory, inCludinG CAPACity-buildinG AMonGst indiGEnous And non-indiGEnous tErritoriAns. it Also dEsCribEs A rAnGE of fundinG oPtions And finAnCiAl ModEls to MiniMisE Costs And MAxiMisE AttrACtivEnEss for PotEntiAl invEstors.


6. CoMPonEnt 1: roll-out of 10Mw of PhotovoltAiC CAPACity to northErn tErritory rEMotE CoMMunitiEs

6.1 bACkGround This section of the Report defines the actions that may be commenced immediately as a first stage of the pathway toward the substitution of a large component of diesel generation with renewable and low emissions sources in the remote communities. The following initiative is proposed:

y Roll-out 10MW of photovoltaic (PV) systems across 46 remote communities to achieve an initial 17% replacement of diesel power with renewable energy. [Recommendation 1]

A roll-out of approximately 10MW of flat plate PV systems is proposed to achieve significant diesel savings without requiring substantial change to diesel power station configuration. This is a technically manageable initiative that may be implemented at a relatively low cost since expensive controls and energy storage systems will not be required.

Modelling undertaken by the Taskforce indicates a positive business case for the initiative, with an internal rate of return of 10.37% before financing. The initiative will cost $60M over a 4-year roll-out, during which time the annual cost of running a PV installation is likely to exceed the cost from diesel generation. After six years, however, the gap is expected to reduce to zero, as the price of diesel continues to increase at a significantly higher rate than the cost of PV power generation. Beyond this point, the cost savings from running PV installations compared to diesel installations will continue to increase, making PV a much more attractive option, on the basis of economics. The PV installations will save 4.5 million litres of diesel per annum. At the conservative price of $1 per litre, the PV roll-out will save $90M in diesel fuel costs over 20 years. (Twenty years is the typical warranty period for PV panels.)

This initiative is complementary to the Power and Water Corporation’s Energy Source Strategy for Growth Towns and Indigenous Communities.

The Energy for Growth Towns and Indigenous Communities identifies viable energy source options based upon a financial evaluation. Underlying the screening process is a comprehensive discounted cash flow analysis that evaluates energy source options and identifies the most cost-effective energy source option for each community.

The objectives of the Energy Source Strategy are to

y Minimise long-term service delivery costs;

y Meet community demand growth in an economic and environmentally sustainable manner;

y Make efficient use of emerging technologies and the availability of gaseous fuels; and

y Prepare for the financial impacts of climate change.

Continued implementation of the Strategy will assist in meeting the wider objectives of the Green Energy Taskforce through the substitution of diesel with LPG, natural pipeline gas and solar energy sources and through efficiency improvements via regional community grid connections. Refer to Appendix 10.6 for the Executive Summary of the Power and Water Energy Source Strategy for Growth Towns and Indigenous Communities.


The outcome of this component of the roadmap is a rapid and cost-effective reduction in diesel consumption across a large number of remote communities through the installation by PV systems and implementation of energy efficiency measures, all conducted using existing or newly-trained local workforce, including indigenous workers.

It is estimated that 30% of peak load across 46 selected communities is equivalent to approximately 10 MW. Appendix 10.3 describes the calculation underlying this estimate. Appendix 10.2 includes a table of the PV system capacity recommended for installation at each community (power station site)(Table 7).

The capital cost of deploying 10MW of PV is estimated to be approximately $60 million. Modelling assumptions underlying this initiative are included in Table 9 of Appendix 10.3.

6.2 ACtions rEquirEd to roll out 10 Mw Pv (And tEChniCAl ProPosAl)

1. Demand analysis. Examine the demand profile for each community in the ‘trial’ to determine the approximate minimum load during winter and summer. Determine the size of the solar PV systems that would be equivalent to no more than 30% of peak load. (The total recommended installed capacity for all selected locations (cumulative total) is approximately 10 MW).

2. Financial/ownership model. Identification of the preferred project financing / ownership model to deliver the $60 million project. Further details in Section 6.5.

3. Land planning. Commence land planning to secure land for the renewable energy systems. Sufficient land should be identified to enable the renewable energy systems to be expanded in the future as peak demand grows. Government agencies should work with the Traditional Owners to determine how this might be achieved, noting the roll-out would not require extinguishing native title.

4. Develop system design. Develop a tailored system design for all sites that have similar diesel generation configuration. This standardisation of design could assist in minimising project costs by enabling project implementation and construction methods to be standardised across the sites.

5. Procurement plan. Develop a plan for bulk procurement of equipment (to minimise cost and project implementation) while land acquisition is in process. System design standardisation presents opportunities for the bulk purchase of equipment to reduce program costs and procurement lead times. Deployment of a significant amount of PV, in minimum 3 to 5 MW blocks across each of the three regions, Southern, Katherine-Barkly and Northern, will enable the bulk purchase of solar modules and other equipment at lowest cost. [recommendations 1a, 1b]

6. Assess local industry capacity. Evaluate the capacity of local industry to roll-out PV systems to all Growth Towns and other Indigenous communities. This will affect the extent to which project construction can be undertaken across a number of sites simultaneously or the extent to which this would need to occur sequentially.

7. Capacity building. Conduct capacity building programs, in consultation with the communities involved, to enable capacity to be maximised prior to the commencement of implementation. Further details in Section 6.3.

8. Implementation. Develop an implementation schedule that minimises capacity constraints (such as availability of skilled workers), but provides economies through increased purchasing power. The Ti Tree, Kalkarindgi, Alpurrurulam Solar Project demonstrates that a package of around 1MW of solar capacity is sufficient to achieve a reasonable level of market competition. Additional economies of scale may be achieved in including a larger number of communities in each package of work; however, diminishing returns may be experienced as the package increases in size due to the distance between locations and availability of resources.


risk MAnAGEMEnt

risk MitigationThe rapid growth in energy demand in selected communities. As base and peak load is growing rapidly across the Growth Towns and Indigenous communities, a system installed today equivalent to 30% generation capacity will be equivalent to much less than 30% capacity in ten years time.

Install solutions that enable performance upgrades as technology improves.

Install expandable systems.

Unable to acquire sufficient land for all proposed PV systems

Expand systems where land is available to ensure that 10MW target is achieved.

Unable to source human capability to deliver project

Implement capacity building and training program at start of project.

Schedule implementation to maximise attraction and retention of core staff.

6.3 indiGEnous EConoMiC dEvEloPMEnt And CAPACity buildinG The Taskforce is keenly aware that the expansion of the low emissions and renewable energy sector in the Northern Territory is an opportunity for Indigenous people to share in the economic benefits that become available. This covers both potential jobs that may exist or be created in remote Australia, as well as the potential for the development of small and medium enterprises. The benefits that accrue from explicitly addressing the capacity for Indigenous people to take up opportunities are well known and can be described as

y Job creation and sustainable employment;

y Establishing an economic base;

y Encouraging investment from the non-government sector;

y Reducing dependence on government funding;

y Increasing self esteem for both individuals and the community; and

y Providing hope and opportunity for future generations.

FiGUre 6. Detailed timeline for roll-out of Component 1: 10 MW solar PV across 46 remote NT communities


Key messages in the Northern Territory Government’s Indigenous Economic Development Strategy are:

y The use of a place-based approach to Indigenous economic development, focusing on assets and strengths of each location – rather than a “one-size-fits-all”;

y There is a role for the private sector in IED in the Northern Territory;

y Access to Indigenous land is a key priority for Indigenous economic development “on country”; and

y There are commercial opportunities in Indigenous communities; partnerships and joint ventures are needed.

Consistent with this approach, Indigenous participation in the Green Energy strategies falls into four broad areas:

y Entry level and ongoing jobs, including trades;

y Consequent business opportunities at the small to medium level;

y Developing pathways to management and business leadership roles;

y Building communities capacity to manage energy demands; and

y Consideration of the role of community ownership of assets.

Developing local business activity is a clear start to creating a path for other economic activity, including

y Trades services such as maintenance and repair; and

y Construction and Installation

Implementing this, calls for a deliberate plan to increase capacity in local businesses and mentor/foster businesses to a stage where they can operate viably using the standing contracts to advance commercial opportunity.

A partnership approach is critical for success. The roles of existing organisations are

y Commercial entities – to create business opportunity, to foster entry level jobs and to incubate business through alliance and/or joint venture; and

y IED Task Force – in undertaking its wider role, provide programmed government support to local economic development opportunity, to provide a strategic overview for development and to provide leadership commitment to the overall development plan.

The aim of this stream of activity is to ensure that there is a mix of viable local businesses that both work towards a renewable energy generating platform in communities and create economic opportunity in the communities. This will

y Create a culture of commerce in communities ensuring that capable local businesses are in a position to respond to any local contracting/tendering opportunity; and

y Create a mobility of skills that can easily migrate in and out of areas of opportunity in the whole range of businesses in the community; mining, construction, civil works and maintenance.

Cross sectoral partnerships will be crucial to creating step change in economic opportunity in communities. This is most evident in those industries that have similar employment profiles to the energy sector in trades, management and employment profiles. In particular there are extensive opportunities in partnering with the mining sector where there is mining activity.


In order to maintain a consistent approach, and in conjunction with the IED Task Force, participating businesses should develop a five year plan in conjunction with relevant industries to include

y Developing a school to job continuum of training and education;

y Fostering development of business skills;

y Business mentoring plan;

y Tailored local economic development plans; and

y Identification of appropriate development partnerships. [recommendation 1c]

In considering targets for local economic activity, training and the transition to jobs are the two key result areas.

A significant number of VET renewable energy graduates will be required over five years for a targeted program to replace diesel in Territory Growth Towns and Indigenous communities and meet the needs of other programs in the Northern Territory such as Green Energy for Outstations and Homelands (including Bushlight) and essential services in remote communities. In comparison, approximately 200 people have been trained at Certificate II level in remote power systems, of which 50% have jobs in the sector.

The Green Energy Taskforce proposes that the Indigenous Economic Development Taskforce work with its members to further develop a robust program addressing both employment and business development, in the proposed 10 MW roll-out. [recommendation 4]

It is also proposed that the Green Energy Taskforce participate in the upcoming Future Forums to provide information and receive feedback on the proposed 10MW Rollout and on the development of the broader Territory Energy Roadmap. [recommendation 5]

6.4 nt CAPACity buildinG And industry dEvEloPMEnt The roll out of 10 MW of solar PV to remote communities presents an opportunity to integrate local economic development initiatives. Conceptually this can be done in alignment with roll-out zones integrating communities and other industry sectors to be prioritised in the operational phases. Support for local economic development and jobs will be most effective based in regional centres and Territory Growth Towns, based on leadership, support and opportunity. Pilot training and local enterprise development schemes are encouraged in:

y Alice Springs including the Desert Peoples Centre, Desert Knowledge Australia Solar Centre, Centre for Appropriate Technology and Charles Darwin University campuses. Considerable capacity to partner with existing research, community, industry and other bodies to extend training and development into the workforce. The Alice Springs Solar City initiative has demonstrated effective strategies to use energy more efficiently and embrace renewable energy technologies which can be translated into other regional centres and Territory Growth Towns.

y Tennant Creek. Proximity to two growth towns (Ali Curung and Elliot), Indigenous communities and many out-stations, and under-utilised local infrastructure combined with extensive mining activity offers considerable opportunity for partnerships.

y Groote Eylandt as an extension of the Regional Partnership;

y Selected Territory Growth Towns such as Nguiu, Maningrida, Gunbalanya, Yirrkala, Galiwinku, Ngukurr, Numbulwar, Lajamanu, Kalkarindji, Yuendumu, Ntaria which currently support solar power systems in the Growth Towns or Outstations and Homelands in their service area, and significant opportunity can be created for increased uptake of solar power.


The pre-installation phase; finishing, pre-installation fabrication and site engineering offer the opportunity for metal and electrical trades and the development of businesses. Installation itself will create business opportunity and integration into existing grids provides further trade training and business opportunity.

An Energy Efficiency Programme (education and household capacity building) can generate a moderate level of employment. As a community activity it can offer:

y Jobs as energy efficiency trainers, in itself a result of a training programme

y Minor technology installation

y Ongoing audit and education programmes

Procurement policies should reflect high levels of Indigenous participation, including non-economic costs as appropriate. These policies may also include:

y Preferences for local contractors

y Partnering options for under capacity local businesses

Further details are in Appendix 10.5.

6.5 fundinG And finAnCiAl ModElsThis section explores commercial approaches that seek to reduce the overall cost of electricity delivered by the proposed systems, ensure that system ownership is appropriate and provide sources of funding. The principle is that whilst a uniform tariff arrangement applies in the NT, there is still an incentive to provide the least cost sources of generation in remote communities, and, under a plausible set of assumptions on future costs, PV generation could be a least-cost source of energy. PV generation may also provide other benefits that need to be captured in any funding or financing proposal.

Cost MiniMisAtion

Assuming that the technical aspects of the systems have been optimised, aggregation of the systems for remote communities should be considered so that a commercial tender process can then deliver the lowest cost outcome. Such a tender should aim to provide an investment pipeline for technology providers that will be attractive and should also provide for bidding future cost reductions as technology costs continue to reduce over the life of the tender.

Assessment of lowest cost outcomes usually involves the use of discounted cash flow analysis to determine the least cost outcome based on mean values for key assumptions. Often the robustness of the assessment is tested by testing the sensitivity of the results to changes in key assumptions. A discounted cash flow analysis undertaken by PWC as part of the Energy Source Strategy, based on mean diesel prices and conservative assumptions on the capital cost of PV systems, indicated that the cost of PV generation would be more expensive than diesel based generation. However, when recent decreases in the capital cost of PV systems, the prospect for reducing these costs further through bulk purchases, price volatility of alternatives such as LPG and long term diesel fuel savings are taken into account, large scale deployment of PV is cost effective.

This approach, however, can bias the decision away from options with high up-front costs and benefits streaming into the future – key characteristics of PV and other solar technologies. Thus, in assessing funding or financing strategies for alternatives to the lowest cost outcomes, consideration would need to be given to other benefits, including the following:

y The benefit of reducing the risk of future adverse movements in diesel fuel prices. Recent experience has illustrated the inherent volatility in world oil prices and an upward underlying trend. Sudden increases in oil prices can increase the cost of diesel fuel generation above what was initially initiated. PV generation can provide a “hedge” against this risk.


y Future carbon liabilities. PV generation could reduce future carbon liabilities.

y The option of expanding the PV contribution at some future date as ancillary technologies (such as battery storage) are improved and their costs reduced.

The delivered cost of electricity from renewable energy systems is overwhelmingly dominated by the capital cost. This means that reducing the cost of capital, i.e. the required return on the investment, could deliver significant reductions in cost of electricity. The cost of capital is directly connected with the ownership model.

There are two levers that can be used to reduce the cost of capital. The first is to lower the risk exposure associated with future returns. For example, REC revenue is exposed to price risk, particularly as the RET market structure has been impacted by several policy changes by the Federal Government over its life, all of which give rise to increased price risk. The NT Government could consider providing some form of price support against the volatility of REC prices. In addition, or alternatively, feed-in tariffs provide a more secure revenue stream, similar to a firm off-take or power purchase agreement with PWC or the Government as the counter-party. There are variations on the same theme that could be explored with the Government.

Second, if a private sector model for ownership is adopted, then a commercial bidding process in which proponents bid for an off-take price could be usefully applied.

These approaches can act to both reduce the equity return requirements and increase the level of debt, particularly if a project finance model can be adopted. The issue of level of debt relates to project finance. It would be usual that the cost of debt would be lower than the cost of equity. Therefore, increasing the % of debt in the project finance package would lower the project’s financing cost. Debt providers would do this if the project risk was able to be reduced. This does not necessarily mean “government debt”.

ownErshiP ModEls

There are a number of alternative models that could be used to provide the finance and ownership structures to implement the proposed 10MW roll out, however these can be broadly categorised into two primary groups:

1. PWC/IES Capital Asset Program – Whereby PWC/IES resources the development of additional capital assets, with a view to owning the assets throughout their useful life. Capital funds could be provided through cash reserves, NTG grants/loans or third party financing. This model is illustrated in Figure 7 below.

FiGUre 7: PWC/IES capital asset development option


2. PWC/IES Energy Purchase Program – Whereby PWC/IES utilises a procurement process to purchase energy via a Power Purchase Agreement from a third party entity and which is delivered within a specified technical framework. This often involves the creation of a Special Purpose Company. In Australia and elsewhere, listed and unlisted companies have been created to hold infrastructure assets in the electricity and gas sectors, primarily in the areas of transmission and distribution subject to economic regulation of returns. Such companies have the capacity to carry relatively high levels of debt (these days even up to 90%) and can attract the support of large superannuation funds etc. With the appropriate commercial structures as described above, this model could make ownership of these systems attractive to an existing entity. The Government might also consider the creation of a special purpose vehicle which could be funded through the issuing of “solar bonds” 1 etc. This model is illustrated in Figure 8 below.

FiGUre 8: PWC/IES energy purchase program

The following table (Table 3) compares different ownership models.

TAble 3: Comparison of different ownership models

bUSineSS MoDel eqUiTy DebTGovernment owned asset

Government/PWC raises capital for plant. Potential to outsource construction and operation. No volume or price risk

Government/PWC raises capital for plant. Potential to outsource construction and operation. No volume or price risk

Special Purpose Company

Developer raises capital for and constructs and operates plant for which it receives prescribed payments from government counterparty based on meeting certain operating parameters. No volume or price risk

Combination of strategic and financial investors.

Financial investors include pension and infrastructure funds.

Required rate of return ~13-16%

Project finance lending banks.

Risk premium 200-250bp.

Gearing up to 75%. Government loans/debt guarantees applicable

1 “Solarbonds”couldbeafinancialinstrumentbackedbythegovernmentthatprovideanopportunityforprivatesectorinvestorstobuyintotheasset.Thismightincludesourcesofinvestmentsuchassuperannuationfundsetc.


indiGEnous ownErshiP

Either of the options proposed would allow for the possibility of Indigenous investment in renewable energy infrastructure assets, either through provision of finance as part of a capital raising exercise by Government, or as a equity partner in a special purpose company. This would also allow for the potential of indigenous investment organizations to actively engage in ownership of assets in Indigenous communities.

fundinG

State and Federal Governments in Australia have used capital grant schemes to encourage investment in low emission technologies. Such schemes include the Victorian Energy Technology Innovation Strategy2 and the Federal Government’s Low Emissions Technology Demonstration Fund3, Renewable Energy Demonstration Program4 and Solar Flagship Program5. Such programs can reduce the ongoing cost of electricity through reducing the upfront capital funding requirements. Given that the proposed systems incorporate both renewable energy and indigenous community aspirations, the potential for such a grant would seem worth exploring.

In particular, the Federal Government announced in its recent budget the establishment of a Renewable Energy Future Fund. According to details released by the Government, the fund “will commit a further $652.5 million over four years. The Fund will provide support for the development and deployment of large and small scale renewable energy projects. The Fund will include partnerships between the Government and the private sector to make critical early stage investments to leverage private funds to support the commercialisation of renewable technologies”. A major goal for the NT Government should be to access this funding and the Taskforce recommends the Government actively prepares a strategy to obtain money from this Fund to finance the rollout of PV generation in remote communities. [recommendation 6] Details on Australian and Northern Territory funding programs are in Appendix 10.7.

If the financing structure with associated commercial arrangements as described above is developed, then securing funds from the private sector (debt and equity) should be achievable.

6.6 outCoMEs inCludinG EConoMiC bEnEfitsTable 4: summarises the elements and outcomes of the first component, the 10MW PV roll-out.

TAble 4: Summary of the elements of Component 1: 10MW PV roll-out

10 MW oF SolAr pv roll-oUT in reMoTe CoMMUniTieS

Total capacity of 46 targeted communities power stations 56 MW

Total capacity of new PV 10 MW

Instantaneous PV output (as % of peaks demand) 30%

Total energy generation of 46 targeted communities (2008-09) 86,200 MWh

Estimated average annual renewable energy generation* 18,000 MWh

Annual diesel consumption of 46 targeted communities (2008-09) 23 ML

Estimated annual diesel fuel savings* 4.5 ML

Annual fuel savings assuming $1 per litre delivered $4.5 million

Cumulative Renewable Energy Certificates (RECs) required 2010 to 2030 4,500,000

Cumulative RECs generated 2011 to 2030 300,000

Cumulative greenhouse gas emissions savings (tonnes CO2-e) 270,000

Total estimated project capital cost $60 million

*assuming 1750kWh/pa/kW and decreasing at 0.5% per annum due to PV degradation

2 http://new.dpi.vic.gov.au/energy/projects-research-and-development/energy-technology-innovation-strategy3 http://www.ret.gov.au/energy/energy%20programs/low_emissions_technology_demonstration_fund/Pages/LowEmissionsTechnologyDemonstrationFund.aspx4 http://www.ret.gov.au/energy/energy%20programs/cei/acre/redp/Pages/default.aspx5 http://www.ret.gov.au/energy/energy%20programs/cei/sfp/Pages/default.aspx


There are two fundamental assumptions underpinning the analyses for this project:

1. The continued decline of PV system prices, coupled with rapid development of industry capacity within Australia and NT in particular, through programs such as Alice Solar City, it is now realistic to assume that, with bulk purchasing of PV systems, installed system prices averaging $5.50/Wp installed are achievable.

2. Concurrently with changes to PV system prices, there are strong indications that the long term outlook for diesel pricing is generally upward, notwithstanding that there may be periods where prices stabilise or decline. The graph below (Figure 9) shows the historic pricing for diesel pricing for PWC.

FiGUre 9: Darwin terminal diesel gate price (excluding excise & GST)

Given the aforementioned assumptions, an economic analysis was done to determine the indicative Internal Rate of Return (IRR) that could be achieved through such a roll-out of PV and a further sensitivity analysis to measure the relative impact of the roll out to variations in the baseline installation cost and/or diesel pricing assumptions.

Appendix 10.3 includes a list of all the economic assumptions used within the model.

Given the assumptions provided, it is reasonable to conclude that an average IRR for the project, after debt financing would in the order of 10%, assuming diesel escalation scenario of 4.5%.

The graph below (Figure 10) shows a surface analysis of the sensitivity of the expected rate of return relative to average diesel price escalation over 20 years versus capital cost assumptions. (Note: figures do not include freight although this is included in the economic assumptions described in this section).


FiGUre 10: Installed cost vs. diesel price escalation impact on IRR (excluding freight)

The graph gives a clear indication of the boundary parameters that would be required for the program to generate an overall IRR of greater than 10% (as noted by red line on the graph). The conditions laid out in Table 5 provide these boundaries.

TAble 5: Boundary conditions assuming a benchmark of around 10%

DieSel eSCAlATion CAPEX ($/WP) irrbase Case 4.5% $5.50 9.87%Low Boundary 0.0% $4.00 10.2%High Boundary 9.5% $7.75 10.0%


ChAPtEr 7 dEsCribEs A rECoMMEndEd APProACh to rEPlACE 100% of diEsEl As A PowEr sourCE in rEMotE northErn tErritory CoMMunitiEs by dEvEloPinG A PlAnninG tool to indiCAtE oPtiMAl dEsiGns for PowEr GEnErAtion for CoMMunitiEs with PArtiCulAr ChArACtEristiCs in tErMs of AvAilAblE rEnEwAblE EnErGy sourCEs, rEMotEnEss, PoPulAtion sizE, And othEr fEAturEs. it Also dEsCribEs oPPortunitiEs for indiGEnous EConoMiC dEvEloPMEnt And CAPACity buildinG.

PAGE 35


7. CoMPonEnt 2: towArd 100% rEPlACEMEnt of diEsEl As A rEMotE CoMMunity PowEr sourCE

7.1 bACkGround This section of the Report defines the second component of the pathway toward the substitution of diesel generation with renewable and low emissions sources in the remote communities.

The Terms of Reference for this Report have indicated that it should include

a proposal for substituting a large component of diesel generation with renewable and low emissions energy, in remote communities, including financing and funding options.

Although the Terms do not specify the size of this component, the 2009 Northern Territory Climate Change Policy’s Target 11 indicates that

By 2020, the Territory will have replaced diesel as the primary source of power generation in remote towns and communities, using renewable and low emissions energy sources instead.

The following initiative is proposed to achieve and move toward 100% diesel substitution:

1. A comprehensive feasibility assessment leading to the substitution of 100% of diesel-based generation with low emission and renewable energy. The feasibility study will include

»» Data collection (community demand patterns, environmental conditions, etc.)

»» Development of a modelling (simulation) tool that will be applicable to all communities and provide a model for transitioning remote communities to a strong low-emission and renewable energy future. The work will develop a unique local industry capacity with strong export potential and incorporate the potential to use low emission fuels, biofuels and other alternatives to fill any short-falls in relation to the aspirational goal of 100% diesel replacement.

»» Provision of a report and costed implementation plan.

2. With the engineering design completed for a 100% replacement of diesel fuel in Growth Towns, it is proposed that a pilot plant be constructed to ‘ground truth’ the modelling tool and allow refinements before roll-out to other communities

The Northern Territory is obligated under the National Renewable Energy Target to surrender an estimated 300,000 Renewable Energy Certificates (RECs) in 2020.

The Northern Territory Government Climate Change Policy 2009, states an intention to source these Renewable Energy Certificates from local renewable energy generation. The challenge of achieving this significant renewable energy contribution necessarily includes consideration of complete conversion of the major diesel stations currently powering the NT remote communities to renewable energy generation.

The 10MW solar PV roll-out component of this roadmap proposed in the previous chapter is anticipated to deliver 300,000 RECs from the time the first PV generators come on line until 2030, which is approximately 7% of the NT RET obligation to 2030. Importantly this 10 MW program will feed directly into the proposed second component (‘Toward 100% diesel replacement) described in this chapter.

Component 2 will commence with a feasibility assessment, including engineering design, costing and the development of a comprehensive real time computer model (‘Modelling Tool’)


of typical 100% renewable energy power stations at selected candidate remote communities. The project will involve several NT agencies and private industry to build core intellectual property (IP) in this important leading-edge initiative. The IP will be embodied in a model for power generation and use in remote communities and be capable of roll-out to all communities across the NT and for export initiatives.

This is a task not yet achieved anywhere in the world at the scale and locations proposed and as such presents a unique and challenging opportunity. By understanding the difficulties and possibilities of achieving 100% diesel fuel replacement in large remote communities, a roadmap may be drawn to maximise the deployment of renewable and low emission energy. This proposal will examine both solar PV and solar thermal energy options for reducing or eliminating the use of fossil diesel, as well as using bio-diesel to substitute for fossil diesel because some level of liquid fuel-based generation will need to remain to meet short-falls in situations where renewable energy cannot meet demand.

It is important to note that whereas this second component will model options for achieving 100% diesel replacement, the final report from the pilot study might recommend that a target somewhat lower than this (e.g. 80-90%) might comprise the most cost-effective option for the Northern Territory to meet its obligations (in terms of reducing greenhouse emissions and converting to renewable energy power generation).

An additional aim of this second component (‘Toward 100% diesel replacement) is to expand on the scope of the energy efficiency work forming part of the 10 MW roll-out initiative and determine the demand management measures that can be implemented, including energy conservation, load shifting and demand peak lopping, to optimise the ability to use renewable and low emission energy.

The value of the project will be maximised through a partnership with industry, Charles Darwin University, Government and the local communities. It will provide significant research opportunities for students, and engineering design opportunity for local businesses.

The NT already has significant specialist background in the intellectual property associated with this endeavour, held in both the private and public sector, to achieve such a goal. The challenge of lifting diesel substitution toward 100% offers the NT a unique chance to build valuable capacity in this important emerging field. The development of a local industry that can export knowledge and systems to similar communities around the world is an exciting possibility.

7.2 outCoMEs The primary outcome of the “Toward 100% diesel replacement” project is an optimised design and energy blueprint for construction of some of the most advanced sustainable energy generation systems for remote communities anywhere in the world. A computer model using validated engineering component models, real field data, real-time analysis and demand side (e.g. Smart Grid) strategies will be developed. The model will embody the intellectual property (IP) and capability to roll-out design alternatives for all NT communities.

Key to the economic benefit of a 100% renewable energy solution (including Smart Grid strategies and energy conservation) is resolving the problem of energy supply when the renewable plant is not able to deliver energy. Such times occur with solar at night and with wind power during lull periods, for example. Energy storage is required but the current high cost of large-scale energy storage technology is prohibitive. The model will provide the best available method to minimise the need and size of such storage

Once the engineering design is completed for 100% renewable and low emission fuel at selected communities, it is planned that the first such pilot plant will be constructed.

Construction of the first of these advanced power stations will place the NT at the forefront of renewable and low emission energy deployment. This has the potential to give Territory companies and agencies a competitive edge for exporting key know-how and technology.

To achieve this it is imperative that the appropriate planning and capacity-building within this field be stimulated and supported by this project.


7.3 tEChniCAl ProPosAl This component of the roadmap will examine alternative renewable and low emission energy resources for reducing or eliminating the use of fossil fuel (diesel), as well as energy storage options and bio-diesel substitutes to meet overnight demand. It will also consider demand-side energy management, energy efficiency and “smart grid” options to reduce the overnight demand. It is proposed that Component 2 of this Roadmap, “Toward 100% replacement of diesel” as a remote community power source, pursue the following actions, which are further detailed in Appendix 10.1.

ACtions

stAGE 1: Collection and analysis of adequate data to build a modelling tool to identify optimal designs for green energy generation in remote communities

1. Select sites for the study. A cross-section of sites is needed to determine the different characteristics affecting the demand management and renewable/low emission energy requirements. It is proposed that at up to four sites be selected, for example from Territory Growth Towns, mining towns, and smaller communities, with at least one northern region and one southern region community.

2. Collect detailed energy demand information at a building and network level for each site. Audits will include commercial and industrial sites, Government buildings and housing, water and wastewater and other energy loads within the community. Meters and data monitoring equipment will be used in the collection of data. Renewable energy source data including solar radiation and, if applicable, wind data will be collected.

3. Build a multi-dimensional computer model to analyse the site data. There are two distinct elements to the simulation tool:

a. The dynamic stability modelling using network tools such as Power Factory

b. The modelling of energy flow using tools such as the HOMER6/POWERCORP software designed to fully integrate Smart Grid energy demand options with renewable energy supply.

4. The model will analyse energy flows between loads and storage, renewable and low emission energy generation options, options for load control (of air-conditioning, water pumping, hot water systems, commercial compressors and cool rooms), energy and bridging power storage options (including solar hot water storage, batteries and flywheels), network dynamic performance including transient analysis of network voltage and frequency to ensure quality of supply. The model will provide an economic analysis of the options to optimise efficiency. By developing the optimal Smart Grid real time control system the design will minimise the need for energy storage and aim to achieve the lowest cost solution with the maximum fuel substitution. This approach is similar to the National Energy Market Company’s7 simulation of large networks where dynamic stability and energy flow constraint are modelled prior to deployment of any change in the network. (See Appendix 10.9 for a schematic of a conventional vs renewable energy power station, with stabilisation.) Community ‘mini grids’ are no different in their vulnerability when significant renewable energy contribution is contemplated.

6 HOMERisasoftwaredesigntooldevelopedbythenationalRenewableEnergyLaboratoryinColorado,USA,thatcanbeusedtoexplorerenewableenergymixesandtrade-offsconsideredindesigningpowerstations.

7 TheNationalEnergyMarketCompany(Victoria)sellselectricitytodistributors,whichisthentransferredacrossconnectionswiththenationalgrid.


stAGE 2: Implementation plans, construction, monitoring and evaluation of performance of pilot power station

1. Develop a plan for implementation, giving consideration to land acquisition, opportunities for local employment and capacity-building as well as Indigenous engagement, followed by the technical roll-out, i.e. construction of a pilot power station to specifications identified by the model.

2. Evaluate the performance of the pilot power station with a view to further improving and optimising the design, focusing on the construction, commissioning, technical performance (supply and demand management), capacity development, social aspects of implementation and economic analysis.

Actions 1-4 would will comprise a feasibility assessment for Component 2, and this might cost on the order of $5 million. The report produced will outline the program and budget for the second stage: development of an Implementation Plan, Roll-out (construction and operation) and Evaluation, comprising actions 5 and 6, which will proceed when funding is secured. The final report from this component will also identify barriers to further penetration of renewable energy options in the Northern Territory.

budGEt

It is anticipated that the first stage of the second component will have an estimated cost of $5.5 million as per the budget below.

TAble 6: Estimated budget for the proposed first stage of the second component toward 100% diesel replacement

yeAr 1 yeAr 2yeAr 3(six months) ToTAl

personnel Project manager 120,000 120,000 60,000 300,000

Project officer 90,000 90,000 45,000 225,000

2 x Data collection officers 180,000 90,000 270,000

Electricians (casual) 100,000 100,000 50,000 250,000

Engineering consultants 100,000 100,00 200,000

PhD Scholarships x2 240,000

Software

Database development 100,000

Hardware

Data Logging 500,000

Demand Side (pumps, SHW, etc) 2,000,000

Supply Side (controls, storage) 1,000,000

Remote Travel/ Admin 50,000 50,000 50,000 150,000

Engagement and communication 100,000 100,000 50,000 250,000

Total 5,485,000


FiGUre 11: Detailed timeline of the strategy towards 100% renewable energy

risk MAnAGEMEnt

risk MitigationCapacity not available in NT to undertake data collection, modelling and evaluation phases.

Form a reference group to define requirements for data, modelling and evaluation for tender (procurement) specifications; determine capacity required to deliver project; determine if local capacity exists, and, if not, appropriate method for attracting expertise.

Funds unavailable for implementation phase. Provide compelling data and modelling that clearly show short- and long-term benefits of project

Renewable energy, coupled with demand management, is not accepted by community.

Provide community consultation processes and education throughout project.

Use expertise and methods developed by Alice Springs Solar City and Bushlight.

The rapid growth in energy demand in selected communities. As base and peak loads are growing rapidly across the Growth Towns and Indigenous communities, a system installed today equivalent to 100% generation capacity will be equivalent to much less than 100% capacity in ten years time.

Implement energy efficiency and demand management measures to minimise wastage and reduce the rate of increase in consumption.

Install solutions that enable performance upgrades as technology improves.

Install expandable systems.

Component 2: Toward 100% Diesel Replacement in NT


7.4 indiGEnous EConoMiC dEvEloPMEnt And CAPACity buildinG As already identified the key elements of NTGs Indigenous Economic Development Strategy cover:

y The use of a place-based approach to Indigenous economic development

y Private sector engagement

y Access to Indigenous land

y Commercial opportunities including partnerships and joint ventures.

The Toward 100% diesel replacement strategy will be largely based on a feasibility assessment, trials and pilots. Therefore it offers considerable opportunity across all the elements of the NTIEDS.

It also offers ongoing career development and business opportunity from the roll-out phase and any activity initiated in that phase could be designed to create a further flow of work into the development of extended renewable systems.

Specific tertiary level education opportunities exist in:

y Undergraduate and graduate indigenous students for research in a variety of disciplines

y Trial site management

y Pilot study reporting and evaluation

y Scope for a wide stream of school and further education traineeships

y Community volunteer work

y Local business development

During design of the expansion activities Indigenous Economic Development, capacity building and jobs could include specific allocations of job targets within any program:

y Establish aspirational targets for local and Indigenous enterprise and employment in all aspects of the Feasibility/Proof of Concept works;

y Establish technical traineeships in partnership between the Charles Darwin University and industry;

y Establish Undergraduate Science or Engineering traineeships in partnership between the Charles Darwin University and industry;

y Sponsor PhD positions within the CDU Centre for Renewable Energy;

y Engage the Cooperative Research Centre for Remote Economic Participation (CRC-REP) and partners

In the longer term, the move towards 100% renewable will incorporate enhanced business activity developed in the roll-out phase as systems are replaced and/or modified. This has the potential to become a world first in integrating local economic development into remote regional business development.

It is recommended that the NTIEDT work with the GET to develop a comprehensive strategy to maximise the involvement of Indigenous individuals, communities and businesses in implementation of this strategy. [recommendation 7] CDU will be an important partner in identifying and supporting the educational and training opportunities.


8. ConClusions And rECoMMEndAtions

This Roadmap builds on the Northern Territory’s strong history of renewable and low emission energy production. The proposal takes a two-pronged approach, with the first component aiming to significantly reduce reliance on diesel as an energy source for remote communities, as well as complementing current and planned activities of the Power and Water Corporation, by supplementing existing generation with the rollout of an additional 10 MW of solar photovoltaic (PV) power. The second component of the Roadmap is intended to design, construct and evaluate an advanced pilot renewable energy power station tailored to environmental, social, demand/supply and other variables characterising the community at the chosen site. This power station will be built using a Territory-developed methodology and modelling tool that can identify the best combination of renewable energy and low emissions options for application at any other sites in the Territory.

The specific Recommendations comprising the Roadmap are listed below:

y Recommendation 1 (Component 1): Roll-out 10MW of renewable photovoltaic power (PV) across 46 remote communities and achieving 17% replacement of diesel [Section 6.1]; and

y Recommendation 2 (Component 2): Pursue 100% diesel replacement as a power source in remote communities, through development of a modelling tool to design optimal low emission and renewable energy power stations in remote communities, including building and evaluating a pilot station to develop plans for roll-out to other communities [Section 7.1]

The recommendations for Component 1 include the following elements:

y recommendation 1a. Develop a procurement plan, incorporating bulk equipment purchase to minimise costs [Section 6.2];

y recommendation 1b. Develop an implementation plan to deploy PV hardware across three regions (Southern, Barkly-Katherine, and Northern) in 3-5MW packages over three years to maximise and incorporate local industry involvement and capacity-building to secure the longevity of an expanded local renewable energy industry [Section 6.2]; and

y recommendation 1c. Develop a five-year plan in conjunction with relevant industries and the Indigenous Economic Development Taskforce to cover

»» development of a school to job continuum of training and education;

»» fostering of business skills;

»» business mentoring plan;

»» tailored local economic development plans; and

»» Identify appropriate development partnerships. [Section 6.3]

The recommendations for Component 2 include:

y recommendation 2a. Develop a Procurement Plan;

y recommendation 2b. Provide tools, instruments and meters appropriate for essential data collection (for development of the modelling tool);

y recommendation 2c. Build a multi-dimensional modelling tool to analyse site data and provide an optimal solution (e.g. smart grid technology); and

y recommendation 2d. Implement the optimal solution as a pilot. [all Section 7.3]


In addition the following recommendations will support both Components;

y recommendation 3. Determine a transitional strategy to maintain the continued delivery of electricity services to Indigenous communities, outstations and homelands in advance of cessation of federal funding in June 2012. The strategy should consider establishing service delivery standards, developing a policy framework on renewable energy, coordination between Bushlight and the Northern Territory Government’s essential services program and ongoing funding requirements. [Section 4.1]

y recommendation 4. The Green Energy Taskforce proposes that the Indigenous Economic Development (IED) Taskforce work with its members to further develop a robust program addressing both employment and business development, in the proposed 10 MW roll-out. [Section 6.3].

y recommendation 5. It is also proposed that the Green Energy Taskforce participate in the upcoming IED Future Forums to provide information and receive feedback on the proposed 10MW roll-out and on the development of the broader Territory Energy Roadmap. [Section 6.3]

y recommendation 6. The NT Government to prepare a funding strategy to support the development of renewable energy projects in the NT, including initiatives in this Roadmap Report. This funding strategy will also investigate options for federal grants through existing programs such as the Renewable Energy Future Fund. [Section 6.5]

y recommendation 7. The Indigenous Economic Development (IED) Taskforce to work with its members to further develop a robust program addressing both employment and business development, in the proposed roll-out of feasibility, modelling, planning and other stages of deployment of advanced energy generation systems in remote NT communities. [Section 7.4]

y recommendation 8. The Green Energy Taskforce to develop terms of reference for a separate report on the potential for energy efficiency measures to extend the levels of diesel replacement anticipated through initiatives of this Roadmap. [Section 5]


9. biblioGrAPhy

DHLGRES (2010). Municipality and Essential Service Program eligible activities. . IN DEPARTMENT OF HOUSING, L. G. A. R. S., NORTHERN TERRITORY GOVERNMENT (Ed.) Online at: http://www.housing.nt.gov.au/__data/assets/pdf_file/0017/90530/Municipal_and_Essential_Services_Defintions_and_Eligible_Activities.pdf

ENERGYDEVELOPMENTS (October 2007). Yulara Compressed Natural Gas (CNG) Transport Project. IN DEVELOPMENTS, E. (Ed.) Factsheet. http://www.energydevelopments.com.au/_dbase_upl/Yulara_factsheet.pdf.

GREINER, R. & PUIG, C. J. (2010). Desktop Assessment of Electricity Generation and Consumption in the Northern Territory. Report for the Green Energy Taskforce. School for Environmental Research, Institute of Advanced Studies, Charles Darwin University.

IES (2006) Annual Report (2006). Indigenous Essential Services Pty Ltd. Online at: http://www.powerwater.com.au/__data/assets/pdf_file/0014/1526/pwc_ies_report_2006.pdf.

PWC2010 (2010). Energy Source Strategy - Growth Towns and Indigenous Communities. Prepared for the Green Energy Taskforce. commercial-in-confidence.

URS (2008). Notice of Intent - Clarence Strait Tidal Energy Project, Northern Territory. Prepared for Tenax Energy by URS. Online at: http://www.nt.gov.au/nreta/environment/assessment/register/tenaxtidal/pdf/noi_clarence.pdf.


10. APPEndiCEs

10.1 10 Mw PhotovoltAiC roll-out: sElECtEd CoMMunitiEs And EstiMAtEd CAPACity rEquirEd

Communities selected for the photovoltaic roll-out were those Growth Towns and IES serviced communities supplied by an isolated power station. This list does not include communities where significant solar capacity is already installed or planned (Ti Tree, Kalkarindgi, Alpurrurulam, Lajamanu, Yuendumu) or where diesel to gas power station conversion is planned (Hermannsburg, Wadeye).

The table below lists all communities selected for the first component, the 10MW PV roll-out.

TAble 7: Proposed PV size for each community

inSTAlleD GenerATion

CApACiTy (KW)

CUrrenT enerGy SoUrCe

reGion propoSeD pv SIzE (KW)

borroloola 3,200 Borroloola Grid Katherine 305Amanbidji (Kildurk) 245 Diesel Katherine 17Ampilatwatja (Aherrenge) 635 Diesel Southern 50Areyonga 690 Diesel Southern 50Atitjere (Hart Range) 740 Diesel Southern 50Bulla 310 Diesel Katherine 17Bulman 600 Diesel/Solar Katherine 50Canteen Creek (Owaitilla) 435 Diesel Southern 30Daly River 1,850 Diesel Northern 305Engawala 250 Diesel Southern 30Finke (Apatula) 590 Diesel Southern 50Galiwinku 3,600 Diesel Northern 250Gapuwiyak 1,920 Diesel Northern 465Gunbalanya (Oenpelli) 3,600 Diesel Northern 250Haasts Bluff (Ikuntji) 430 Diesel Southern 30Imangara (Murray Downs) 125 Diesel Barkly 19imanpa 475 Diesel Southern 33Kaltukatjara (Docker River) 665 Diesel Southern 56Kintore 920 Diesel Southern 56laramba 700 Diesel Southern 56Maningrida 4,820 Diesel Northern 525Milikapiti 1,120 Diesel Northern 350Milingimbi 2,400 Diesel Northern 525Milyakburra (Bickerton Is) 750 Diesel Northern 56Minjilang 660 Diesel Northern 310Minyeri 1,050 Diesel Katherine 340Mt Liebig 515 Diesel Southern 56Nguiu 4,900 Diesel Northern 525Ngukurr 3,400 Diesel Katherine 310Numbulwar 1,590 Diesel Northern 525Nyirripi 480 Diesel Southern 56


inSTAlleD GenerATion

CApACiTy (KW)


reGion propoSeD pv SIzE (KW)

Palumpa 960 Diesel Southern 310Papunya 1,070 Diesel Southern 56peppimenarti 730 Diesel Northern 56Pigeon Hole 285 Diesel Katherine 19Pirlangimpi 1,100 Diesel Northern 310Ramingining 1,570 Diesel Katherine 525Robinson River 810 Diesel Katherine 56

Tara 310 Diesel Barkly 33Titjikala 720 Diesel Southern 56Umbakumba 990 Diesel Northern 56Warruwi 760 Diesel Northern 310Willowra 680 Diesel Southern 56Wilora 210 Diesel Southern 33Wutunugurra (Epenarra) 320 Diesel Barkly 33yarralin 1,040 Diesel Katherine 56

Sub Totals 56,020 8 MW

TAble 8: Designated Northern Territory Growth Towns with Electricity Consumption and Energy Sources

TerriTory GroWTH ToWnS eleCTriCiTy ConSUMpTion

(KWH)

popUlATion 2006

(NO) 1)


Non-IES Programborroloola 4,192,402 889 Dieselelliott 1,707,950 488 Gas

IES ProgramAli Curung 1,618,580 398 GasAngurugu 3,987,410 933 BHP/GEMCO MineDaguragu- 989,230 249 Kalkarindjj GridGaliwinku 6,137,156 1,941 DieselGapuwiyak 2,626,224 1,013 DieselGunbalanya (Oenpelli) 4,322,932 1,011 DieselHermannsburg 3,020,107 641 Diesel/Solar/LPGKalkarindji 2,322,685 375 DieselLajamanu 2,901,000 769 Diesel/SolarManingrida 8,312,292 2,362 DieselMilingimbi 3,330,417 1,024 DieselNguiu 6,198,836 1,457 DieselNgukurr 4,098,500 1,050 DieselNumbulwar 2,764,610 770 DieselPapunya 1,569,285 343 DieselRamingining 2,969,926 743 DieselUmbakumba 2,082,920 392 DieselWadeye 6,698,973 1,874 Dieselyirrkala 3,304,803 785 Rio Tinto power

stationYuendumu 3,395,100 787 Diesel/Solar

Total Growth Towns 78,551,338 20,294

1)PopulationfiguresbasedonlastAustralianBureauofStatisticscensusin2006


10.2 10 Mw PhotovoltAiC roll-out: CAPACity CAlCulAtion And ModEllinG AssuMPtions

The methodology used to calculate how much PV is required to be installed at each community to meet the 30% of load target was as follows:

y Selected communities with similar load profiles were grouped together;

y For each group, the daily average peak load in summer and winter were identified;

y PV system size was determined from 30% of peak summer load. Output from this system was checked to ensure that it was less than 30% of the winter peak load. (The reason being that PV system output is on average 40% less than in summer);

y If the system output was found to be greater than 30% of the winter peak, the size was reduced accordingly;

y As shown in Table 13 this calculated resulted in a total of 8MW of PV;

y System size was then increased by 25% in line with the anticipated rate of demand growth at remote communities over the period 2010-2014, giving a final total of 10MW required.

ModEllinG AssuMPtions

Savings associated with diesel displacement were calculated assuming a delivered diesel cost of $1 per litre, the energy content of diesel is 4kWh per litre and a marginal cost of generation of 25c/kWh excluding maintenance overheads.

A 10% contingency has been included to allow for a time lag in project commencement.

The following assumptions were used as inputs in the economic model to calculate the cost of a 10 MW PV roll-out:

TAble 9: Modelling assumptions for roll-out of 10 MW photovoltaic energy in remote NT communities

General Inputs

Diesel Escalation Indexation 4.50% Inflation 3.00% REC Inflation 0.00% Tax 30.00% Weighted Average Cost of Capital 11.20% Cost of Equity 16.00% Franking 70.00% System size (kWp) 10300 System output (kWh/pa/kWp) 1750 installed cost ($/Wp) 8.75

Capital Cost Power Station 90,125,000 Other Costs 1 (insert description) 0 Other Costs 2 (insert description) 0 Total Capital 90,125,000 Grant Total Proponent Contribution 90,125,000


Annual Ongoing Costs (initial year) Operating & maintenance 206,000 Additional operating costs 0 Insurance 51,500 Warranty 0 Lease of land Financing Debt 100% Interest Rate 9% Loan (years) 20 Power Value SPS Output per annum (kwh) 18,025,000 Output degradation per annum 0.5% Diesel Generation Cost$/kWh) 0.25 REC Starting Price ($/MWH) 95 Useful Life Contract Term 20 Tax Life 20 Depreciation per annum 4,506,250 Start Date 1-Jul-10 Terminal Value (% of cost) 0%


10.3 bACkGround And nt CAPACity And CAPAbilityrEnEwAblE rEMotE PowEr GEnErAtion ProGrAM

The Renewable Remote Power Generation Program (RRPGP) was an Australian Government initiative to provide financial support to increase the use of renewable energy generation in remote parts of Australia. The program commenced in 2001 and closed in June 2009 for NT applicants.

During its lifetime a total of 669 renewable energy generating systems were funded in the NT (see Table 10 below). The majority of the systems are based on solar PV but also includes six wind powered installations.

The Kings Canyon power station has a capacity of 225kWp and was commissioned in November 2003. The plant is designed to produce 372,000kWh per year and reduce diesel consumption by up to 105,000 litres per year and lowers greenhouse gas emissions by 331t CO2-eq annually.

Bulman power station has a capacity of 56kWp. Estimated fossil fuel savings are 25,000 litres of diesel per year with associated greenhouse gas emission savings of 70t CO2-eq annually.

Kings Canyon and Bulman received total funding of $1.76 million from the Australian Government through the Renewable Energy Commercialisation Program and RRPGP.

As part of the RRPGP, thirty concentrating solar dishes were installed in the three Indigenous communities Hermannsburg, Yuendumu and Lajamanu in 2005 and 2006. These communities are located in the centre of the Territory several kilometres apart, each consisting of several households.

The installed solar dishes provide 30-50% of the daytime power usage depending on demand. The project costs of $7 million were offset by a $3.4 million grant through the RRPGP. These three power stations are designed to save 420,000 litres of diesel and 1,550t of CO2-eq each year.

The RRPGP also funded a large number of water pumping systems for pastoral operations and Indigenous communities.

The only systems funded by the RRPGP that utilise wind energy are three hybrid solar PV – wind systems on Black Craggy Island, Uguie and in the Bulgul community; the wind – diesel hybrid system in Gawa on Elcho Island; and two wind water pumping systems near Blackmore and near Edith Falls.

bushliGht

The Centre for Appropriate Technology (CAT) is a non-governmental organisation that works with remote communities to secure sustainable livelihoods through access to appropriate technology. CAT was established in 1980 and is incorporated under the Northern Territory Associations Act. CAT is governed by an Indigenous Board which also auspices a company, Ekistica Pty Ltd.

Bushlight is a CAT project on innovative renewable energy which aims to increase access to sustainable energy services within remote Indigenous communities across Australia. As of January 2010, Bushlight managed the installation of 89 solar PV based systems in the NT, most of which are partially funded under the RRPGP. The total installed capacity amounts to 1.07GWh.

Bushlight Energy Efficiency Program in QLD and WA

In 2009, Bushlight collaborated with Ergon Energy (an electricity utility based in Queensland) to develop and implement the household consultation component of a pilot project known as ‘powersavvy’. Powersavvy is whole of community energy conservation project operating in three remote Queensland communities: Thursday Island, Horn Island and the Northern Peninsula Area. The project aims to develop and demonstrate a sustainable, repeatable model for significantly reducing electricity consumption, greenhouse gas emissions and cost of electricity provision in remote, diesel powered communities.


This program is designed to assist residents in remote Indigenous communities to save electricity through education and by providing energy saving technologies like energy efficient light bulbs and low flow shower heads.

A similar project in cooperation with Horizon Energy is currently underway in Western Australia.

Bushlight India project

The Bushlight India Project is managed by CAT International Projects, a wholly owned subsidiary of CAT. The project commenced in 2008 and is funded by the Department for the Environment, Water, Heritage and the Arts through the Australian Government’s participation in the Asia-Pacific Partnership on Clean Development and Climate.

The Bushlight Project is currently being adapted in remote villages in eastern India. ‘To achieve this, CAT Projects is working in partnership with Indian-based community organisations and renewable energy industry participants, including the Government of India, to develop a widely transferable model for the implementation of renewable energy power systems appropriate to the rural Indian context.’ 8

As part of the Bushlight India Project three pilot sites have been selected. As of May 2010 installation started at the first site in Orissa and preparations commenced in Sundarbans and Chhattisgarh. These three demonstration systems will provide up to 1000 residents of rural Indian villages access to reliable 24h electricity, access to reliable maintenance services, and targeted capacity building and support to help operate and manage their renewable energy systems.’8

Future of Bushlight

The RRPGP provided large parts of the Bushlight funding with rebates of up to 50% of the cost of solar PV installations for remote communities without grid-connection. This program closed for applications in June 2009. Bushlight is currently negotiating with the Department of the Environment, Water, Heritage and the Arts and the Department of Families, Housing, Community Services and Indigenous Affairs to replace the funding provided by the RRPGP previously.

Bushlight currently focuses on delivering maintenance services to both Bushlight systems and non-Bushlight renewable energy systems. In 2006 Bushlight received funding from the Department of Families, Housing, Community Services and Indigenous Affairs to develop a renewable energy maintenance program. Since then more then 100 non-Bushlight systems have been included in the Bushlight maintenance schedule.

dEsErt knowlEdGE AustrAliA solAr CEntrE

Desert Knowledge Australia (DKA) is a national organisation that grew out of the Desert Knowledge ‘movement’ in 2001. It is funded by the Northern Territory Government and supported by the Australian Government.

The Desert Knowledge Australia Solar Centre is a DKA project that showcases and demonstrates a range of solar power technologies in a number of different configurations. The DKA Solar Centre is located in the Desert Knowledge Precinct in Alice Springs and houses 15 different solar PV installations and one solar hot water system which have been installed by 8 different companies including BP solar and Kyocera.

The DKA Solar Centre webpage offers an online live information system that allows for monitoring electricity outputs of all systems as well as current weather conditions.9

8 http://www.catprojects.com.au/bushlight-india/9 http://www.dkasolarcentre.com.au/


AliCE solAr City

Australian Solar Cities is a $94 million initiative of the Australian Government designed to trial new sustainable models for electricity supply and use. It is being implemented in seven separate electricity grid-connected areas around Australia by the Department of the Environment, Water, Heritage and the Arts. The program started in 2006 and is scheduled to finish in June 2013.10

Alice Springs is one of seven national Solar Cities under the Australian Solar Cities Program. The Alice Solar City $37 million project was launched on 10 March 2008 and aims to install a significant number of solar PV systems, solar hot water systems and smart meters. This program also includes a number of trials to monitor energy usage and energy related community behaviour, like trial feed-in tariffs and energy surveys and audits.11

To date almost 2000 households and 100 businesses registered with the program and over 1600 received free energy surveys to become more energy wise. About 275 residential and 20 commercial solar PV systems are already installed and their total capacity amounts to 700kW which reduces the load on the Alice Springs power grid by more than 1%. The Alice Solar City Program aims to provide an additional 400 to 500 houses with solar power by the end of 2010 which would make Alice Springs the first town of its size in Australia to have 10% of its roofs covered with solar panels.

The Crowne Plaza Alice Springs Solar System is the first completed iconic project under the Alice Solar City program. More than 1300 photovoltaic modules as part of a 305 kW solar PV systems were commission in early 2009. The installation will supply up to 80% of the instantaneous power demand during the day and reduce the total load on the Alice Springs power grid by 0.5%.

The second iconic project will be installed at Alice Springs Airport. The 28 SolFocus concentrator PV tracking arrays will have a combined capacity of 235kW and will provide approximately 28% of the airport’s demand. This project is expected to be completed by August 2010.

bulk buyinG sChEMEs

Alice Springs

The first bulk buying scheme for rooftop solar panels in Alice Springs was launched in March 2010. After the funding for residential solar PV systems through the Alice Solar City Program was fully allocated in late 2009 and a significant further interest arose from Alice Solar City participants and the wider Alice Springs community, Alice Solar City investigated a bulk purchase scheme. As a result two companies are currently offering solar PV systems to Alice Springs residents for bulk buying prices starting below $3000 for a 1kW system, after taking into account the current value of Renewable Energy Certificates.

Darwin

COOLmob is a sustainable living project of the Environment Centre NT, funded mainly by the NT Government. Similar to its sister organisation DKA, COOLmob provides information and audits to residents in Darwin, Palmerston, Katherine and the Darwin rural areas. In 2009 COOLmob, in conjunction with the Australian and New Zealand Solar Energy Society (ANZSES) established a solar PV bulk buying scheme for rooftop solar panels, which delivered roof mounted solar PV systems to households until December 2009.

10 http://www.environment.gov.au/settlements/solarcities/history.html11 http://www.alicesolarcity.com.au/


uPCoMinG ProjECts

Lake Nash, Ti Tree & Kalkarindji

CAT Projects is an engineering consultancy based in Alice Springs which specialises in energy systems and renewable energy. It is a wholly owned subsidiary of Centre for Appropriate Technology. CAT Projects was involved in the Crowne Plaza Alice Springs Solar installation, the Desert Knowledge Australia Solar Centre, a number of feasibility studies and consultancy.

CAT Projects was engaged by the Northern Territory Government to review options for developing renewable energy projects at Ti Tree and Kalkarindgi for funding under the Renewable Remote Power Generation Program (RRPGP) and manage a tender process. The successful tenderer is currently in negotiations with PWC over power purchase agreements.

TAble 10: Projects funded by the RRPGP from 2001 to 2009 in the NT

SySTeM no. MAJor loCATionSConcentrating Solar PV System 3 Lajamanu, Hernmannsburg and YuendumuPV Fuel Saver 2 Bulman, Kings CanyonHybrid Solar PV 206 22 Bushlight projects, Bradshaw Field & Kangaroo Flats Training Area,

Watarraka NP, 100 Indigenous CommunitiesSolar pv stand alone 151 67 Bushlight, 64 Indigenous Communities, UluruHybrid Solar PV – Wind 3 Black Craggy Island, Uguie, Bulgul CommunitySolar Street Lighting 1 Ulpanyali - Street lightWind Hybrid 1 Gawa on Elcho IslandSolar PV Water Pumping 300 241 Pastoral Operations, 45 Indigenous CommunitiesWind Water Pumping 2 1 Industrial & 1 Pastoral Operation

ToTAl 669


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10.4 buildinG nt CAPACitybACkGround

There may be opportunity to incorporate training relevant to implementation of the Roadmap, in the courses provided to Essential Services Operators (ESOs). Charles Darwin University (CDU), Group Training NT and the Power and Water Corporation (PWC) have been working in partnership to build capacity in communities to undertake ESO responsibilities.

There are approximately 131 combined permanent and temporary ES’s employed, of which 37% identify as Aboriginal or Torres Strait Islander. CDU has provided Certificate II training in electro-technology for remote power stations and ESO’s.

All Essential Services Agreements require the ESO to have a Certificate II level qualification as a minimum or to have the ESO working towards completing this qualification. There are two available courses: the Certificate II in Electrotechnology and the Certificate II in Water Operations.

Between 2005 to 2009 there were 185 graduates in Electrotechnology, Certificate II. About half of these graduates are working as ESOs in Indigenous communities. Others have taken pathways into apprenticeships with PWC, more senior positions within Local Government or are working with Outstation Resource Centres.

CDU delivers a three-day training course to ESOs in various locations. The annual theoretical and practical course covers electrical and mechanical generation, fuel storage and management, fire suppression, water and sewerage, occupational health and safety and environmental awareness, and provision of safe drinking water. ESOs participate in a variety of training in areas such as safety, electrical basics, water sampling, metering and oil spills. These courses provide ESOs with the opportunity to further develop skills and network with other ESOs and Power and Water staff.

PWC has been active in developing the national Certificate Level II curriculum for EE-Oz “Remote Area Power Systems” and Government Skills Australia “Essential Services Operator”. EE-Oz is also considering a submission, supported by PWC to approve a Certificate III curriculum for Remote Area Power systems.

In 2008 the Centre for Appropriate Technology developed learning resources and facilities for a Certificate Level; II course for Remote Area Power Supply Maintenance. Subsequently, a new training package was developed and CAT has aligned their modules with a certificate from the Electrotechnology training package. The learning resources and facilities included course delivery and assessment resources, fixed and mobile.

10.5 PowEr And wAtEr CorPorAtion’s EnErGy sourCE strAtEGy Growth towns And indiGEnous CoMMunitiEs: ExECutivE suMMAry 2010.

The following text is the Executive Summary excerpted from PWC 2010: Energy source strategy growth towns and indigenous communities:

The Energy Source Strategy for Growth Towns and Indigenous Communities identifies viable energy source options based upon a financial evaluation. Underlying the screening process is a comprehensive discounted cash flow analysis that evaluates energy source options and identifies the most cost effective energy source option for each community.

The objectives of the Energy Source Strategy are to

y Minimise long-term service delivery costs;

y Meet community demand growth in an economic and environmentally sustainable manner;


y Make efficient use of emerging technologies and the availability of gaseous fuels; and

y Prepare for the financial impacts of climate change.

Nine different energy source options are evaluated, these are solar, wind, biodiesel, liquid petroleum gas (LPG) substitution, compressed natural gas (CNG), liquefied natural gas (LNG), pipeline natural gas, connection to Power and Water urban grids or private grids, and diesel fuelled generation. The base case uses 2008-09 contract prices and Statement of Corporate Intent (SCI) assumptions rolled forward. A sensitivity analysis has been incorporated to highlight the financial implications when the diesel price assumptions are varied.

The screening process using identified positive net present value (NPV) outcomes in certain locations for

y Pipeline gas;

y Solar substitution;

y LPG substitution; and

y Regional grids.

Northern Territory Government recently endorsed a proposal to convert the Hermannsburg and Wadeye power stations to operate on natural gas. Work on these projects is proceeding on this basis. Further examination of the cost effectiveness of connecting Palumpa and Nauiyu to Wadeye via a transmission line compared with converting the power stations at these two communities to gas will be undertaken.

Under the 2.5% diesel price escalation scenario, solar energy was identified as being NPV positive at two northern coastal communities. Under the 5% diesel price escalation scenario, the competitiveness of solar improves. This result points to the recent substantial reduction in the market cost of photovoltaic modules. With further cost reductions expected in the future, it is proposed that additional research be undertaken into the effect on project costs of different storage options, demand-supply integration and increased solar energy penetration. The solar projects planned for Ti Tree, Kalkarindgi and Alpurrurulam will also inform this work. This project tender has demonstrated the market is prepared to respond readily to larger projects covering multiple sites comprising upwards of one mega-watt combined solar capacity.

The technical and economic viability of solar at the northern communities identified by the screening process is contingent on procuring power purchase agreements with a private sector supplier at a price less than the avoidable cost of diesel generation and mitigation of risks associated with cyclones. A Nguiu Renewable Energy Feasibility Study, currently under development, is expected consider these issues.

Liquid Petroleum Gas (LPG) is a competitive diesel substitution option when the price of LPG is sufficiently less than the delivered diesel price. Short term diesel and LPG price fluctuations indicate that longer term risks around price need to be managed through appropriate contract arrangements. Given the greenhouse gas emissions savings benefits that can be achieved through LPG substitution, the Strategy proposes a program of LPG substitution providing tender prices are favourable.

Further investigation is required to determine the viability of wind in the Barkly Region and whether solar or wind energy is cheaper across this region. The Strategy proposes the installation of one or more wind turbines at Alpurrurulam, which will inform an understanding of the economic characteristics of wind energy in remote Northern Territory.

The creation of regional grids (inter-connection of two or more remote communities) has become standard practice when financially viable. The Strategy outlines communities that have been identified as potential regional grid connections. Investment decisions surrounding the regional grids will be made by way of standard Power and Water investment processes.


The sensitivity analysis identified that, when the diesel assumptions are relaxed and the diesel price escalates from 5.0% to 7.5% per annum, then most of the energy source options, with the exception of 30% biodiesel and 30% LPG substitution, are NPV positive, and therefore, commercially viable. Under this scenario, only capital-intensive energy options with communities that have a low generation output remain unviable.

Based upon the outcome of the sensitivity analysis, it is anticipated that CNG and LNG could potentially form components of the energy source portfolio of Indigenous Essential Services Pty Ltd (IES). These options have been included in the feasibility section of the strategy. In order to optimise resource allocation in the short-term, the focus is on pipeline gas, solar and determining at what locations LPG substitution makes economic sense.

The Screening Process enables Power and Water to evaluate new technologies and opportunities as they are presented during the standard course of business. In addition, the process provides IES with an appropriate price range for energy source options that will inform commercial negotiations with the private sector.

10.6 rEnEwAblE EnErGy fundinG oPtions The following government programs are potential sources of funds for developing and implementing renewable energy initiatives in the Northern Territory.

AustrAliAn GovErnMEnt ProGrAMs

The programs below indicate that substantial potential funding for renewable energy research and commercialisation is available, with the Renewables Australia funding appearing particularly well-aligned to the projects proposed in this roadmap –“Renewables Australia will support growth in skills and capacity in renewable technologies whilst also forming important alliances with governments, industry and communities in promoting the development of renewable technologies”. However the Solar Flagships program indicates that the supported facilities will be within the national grid, thereby excluding the Northern Territory. The National Energy Efficiency Initiative may be relevant to the projects proposed in this roadmap - “the goal is to create an energy network in one location that integrates a ‘smart grid’ with ‘smart meters’ in homes”. It is not clear if the Education Infrastructure Fund’s $650 million Sustainability Round could be sourced for the projects, as this funding is presumably related to education campuses.

Commonwealth Government 2009-2010 Budget Announcements

Clean Energy Initiative

The Clean Energy Initiative will deliver substantial assistance to help support the development of lowemission technologies while also building the necessary infrastructure and skills and capacity in the move to a lowpollution future.

The Clean Energy Initiative will comprise three new core elements:

y the establishment of Renewables Australia, a new renewable technology innovation body

y investment in up to four new commercialscale Solar Flagship projects

y investment in largescale Carbon Capture and Storage (CCS) demonstration projects.

The Clean Energy Initiative will strengthen Australia’s climate change response and will encourage significant innovation in clean energy generation and lowemission technologies.12

12 http://www.budget.gov.au/2009-10/content/glossy/infrastructure/html/infrastructure_overview_29.htm


Renewables Australia

The Government will establish a new independent innovation body — Renewables Australia — to promote the development, commercialisation and deployment of renewable technologies.

With initial Government funding of $465 million over four years, Renewables Australia will have the flexibility to promote new and existing renewable technologies. The new body will facilitate investment across the whole innovation chain, including investment in essential renewablerelated systems such as renewable energy transmission infrastructure.

Renewables Australia will support collaborative, highpriority technology research with the ultimate aim of progressing new technologies and lowering the cost of existing technologies in the market place.

Renewables Australia will support growth in skills and capacity in renewable technologies whilst also forming important alliances with governments, industry and communities in promoting the development of renewable technologies.

The new body will be overseen by an expert board, ensuring that renewable technologies with strategic national importance are identified and properly supported.13

Renewable Energy Future Fund

The Australian Government will commit $652.5 million over four years to establish a Renewable Energy Future Fund to support Australia’s response to climate change.

The Fund will provide additional support

y for the development and deployment of large and small scale renewable energy projects, for example further investments in geothermal, solar and wave energy; and

y to enhance take-up of industrial, commercial and residential energy efficiency, helping Australian businesses and households reduce their energy consumption.

The Fund will include partnerships between the Government and the private sector to make critical early stage investments to leverage private funds to support the commercialisation of renewable technologies.

The Renewable Energy Future Fund will be delivered through a number of departments and agencies, with the Department of Climate Change and Energy Efficiency coordinating Fund priorities and progress. Details of the specific commitments under the Fund are yet to be announced.14

Solar Flagships

The Government will invest $1.5 billion over six years in a new Solar Flagships program. The program will aim to establish an additional 1,000 megawatts of solar electricity generation capacity in Australia. This is similar to the generation capacity of a coalfired power station, and three times the size of the world’s largest operating solar energy project.

The Solar Flagships program will be used to demonstrate a range of solar technologies, including solar thermal and solar photovoltaic, by developing up to four individual generation facilities within the national grid. The specific technologies to be employed will be based on a competitive assessment.

This investment will help accelerate the development, demonstration and deployment of promising solar energy technologies, whilst also building skills and capacity in the solar industry.

Four solar photovoltaic and four solar thermal projects will share up to $15 million in feasibility funding. The two final successful applicants - one solar thermal and one solar photovoltaic - for Round One of the Solar Flagships Program will be announced in the first half of 2011.

13http://www.budget.gov.au/2009-10/content/glossy/infrastructure/html/infrastructure_overview_31.htm14http://www.climatechange.gov.au/~/media/Files/minister/wong/2010/media-releases/May/mr20100511a.ashx


Together with the existing $100 million Australian Solar Institute, the new Solar Flagships program will develop Australia’s potential to become a world leader in largescale solar electricity generation.15

National Energy Efficiency Initiative

In addition to the Clean Energy Initiative, the Government will provide a $100 million grant for the National Energy Efficiency Initiative.

The goal is to create an energy network in one location that integrates a ‘smart grid’ with ‘smart meters’ in homes. This leadingedge project will be of sufficient scale to demonstrate best practice and inform national rollouts and government policy. This will enable greater energy efficiency, reduced emissions and use of alternative energy sources such as solar power.14

Building worldclass research capabilities

Recognising the importance of infrastructure to Australia’s universities and public research agencies, the Government will provide $2.6 billion from the Education Investment Fund (EIF) for priority infrastructure projects.

The Government is delivering education infrastructure that supports the responses to the Bradley and Cutler reviews and ensures our research institutes have the facilities they need for the 21st century. Public sector research will benefit from

y $481 million for 11 teaching and learning higher education projects

y $322 million for eight researchbased higher education projects

y $901 million for the Super Science initiative to build capacity in key future industries including space, marine, climate and nuclear science

y $132 million for 12 vocational education and training projects

y $750 million for the third EIF funding round — $250 million of this will be partnered with up to $400 million under the Clean Energy Initiative to form a $650 million Sustainability Round.16

AustrAliAn CEntrE for rEnEwAblE EnErGy

The Australian Centre for Renewable Energy (ACRE) is a component of the Government’s $4.5 billion Clean Energy Initiative (CEI) that will promote the development, commercialisation and deployment of renewable energy and enabling technologies. ACRE will be a one-stop shop for Australian renewable energy businesses, consolidating these programs:

y $300 million Renewable Energy Demonstration Program – (mostly awarded)

y $15 million Second Generation Biofuels Research and Development Program (closed)

y $50 million Geothermal Drilling Program ($49 million awarded)

y $20 million Advanced Electricity Storage Technologies Program ($18.4 million awarded)

y $14 million Wind Energy Forecasting Capability Program (funding concluded on 30 June 2009)

y $18 million Renewable Energy Equity Fund (Closed for new applications)

y $150 million for new initiatives, including funding from the formerly proposed Clean Energy Program.

Until the legislation to establish the ACRE Board is passed by Parliament, an Interim Advisory Board will be appointed. Almost all of the funding for existing programs has been committed and/or these programs have closed. The Government is soon expected to announce the members of the inaugural ACRE Board. One of the Board’s first tasks will be to develop a funding strategy for the uncommitted funds that ACRE holds.17

15http://www.budget.gov.au/2009-10/content/glossy/infrastructure/html/infrastructure_overview_32.htm16http://www.budget.gov.au/2009-10/content/glossy/infrastructure/html/infrastructure_overview_33.htm17http://www.ret.gov.au/energy/energy%20programs/cei/acre/Pages/default.aspx


AustrAliAn solAr institutE

The Australian Solar Institute (ASI) is a $100 million commitment by the Australian Government to support solar thermal and solar photovoltaic research and development. This commitment will foster greater collaboration between solar researchers in universities, research institutions and industry and help forge strong links with peak overseas solar research organisations.

The ASI aims to drive collaborative, focused research and development that will have a major impact on the efficiency and cost-effectiveness of solar technologies. It will also disseminate the results and learnings from solar research for the benefit of the Australian and global solar communities and the Australian public and will act as a catalyst and champion for Australia’s leadership strengths in solar research and development.

The majority of the Institute’s research funding will be allocated through a competitive grants program. A smaller proportion of research funding will be provided to core Institute projects and activities.

Funding Parameters:

y $100m from Australian Government from 2009 to June 2012

y R&D funding to be split 50:50 between PV and CST, to be reviewed after 12 months

y 60% R&D funding to be allocated through competitive process open to public and private researchers in Aust

y 40% R&D funding set aside for core research projects, of which $15 m allocated to Foundation Projects to be lead by CSIRO, UNSW and ANU

The ASI has announced 5 successful projects from round one, with a value of $18.45 million from applications totalling $177 million.

Expressions of interest have been invited for round two (closing 21 May 2010). Up to $40 million is available for Solar PV, Solar Thermal, and Knowledge Building and Skills Development.18

CooPErAtivE rEsEArCh CEntrE GrAnts

The Cooperative Research Centres (CRC) Program provides funding to build critical mass in research ventures between end-users and researchers which tackle clearly-articulated, major challenges for the end-users. Selection rounds for the program are usually held annually. The 13th Cooperative Research Centres Program selection round is open and applications must be lodged by 5.00pm AEST on Friday 2 July 2010.19

Potentially, a CRC bid could be developed to support R&D components of the proposed activities. It may also be possible to link with existing CRC’s, such as the CRC for Remote Economic Participation, which has a Research Theme on Climate and energy futures

This theme will develop regional strategic plans for dealing with climate change. These include health preparedness, infrastructure investment for lower greenhouse gas emissions, comfortable and healthy living conditions and more prosperous and sustainable settlements. The first research focus will be on strategies to manage climate change impacts, and the second research focus will be on energy security, which is critical in remote settlements, where reliance on fossil-fuel generation plants is normal. We will explore moves toward distributed energy generation built on hybrid fossil fuel and renewable power technologies.20

ArC GrAnts

The ARC funds research and researchers under the National Competitive Grants Program. A large number and type of grant programs are funded, including:

18 http://www.australiansolarinstitute.com.au/19https://www.crc.gov.au/Information/default.aspx20 http://www.desertknowledgecrc.com.au/rebidround12/downloads/Three-page-summary-of-CRC-REP-application.pdf


Discovery y Australian Laureate Fellowships

y Discovery Indigenous Researchers Development

y Discovery Projects

y Future Fellowships

y Super Science Fellowships

Linkage y Linkage Infrastructure, Equipment and Facilities

y Linkage Learned Academies Special Projects

y Linkage Projects

Centres y ARC Centres of Excellence

y ARC Special Research Centres

y Co-funded Centres of Excellence

Most programs are funded annually, with a range of closing dates throughout the year. The most relevant programs are likely to be Linkage Infrastructure and Project grants.21

Ausindustry

On 12 May 2009 the Government announced it will replace the existing R&D Tax Concession with a new R&D Tax Credit. The R&D Tax Credit is planned to come into effect from 1 July 2010. The R&D Tax Credit is a broad-based and market driven incentive package. The two core components of the package are:

y a 45 per cent refundable tax credit (the equivalent to a 150 per cent concession) for companies with an aggregated turnover of less than $20 million per annum;

y a 40 per cent standard tax credit (the equivalent of a 133 per cent deduction).22

Funding for commercialisation of renewable energy

Some Commonwealth Government programs support renewable energy activities at various stages of the research, development, proof-of-concept and early-stage commercialisation pathway.

CoMMErCiAlisAtion AustrAliA (rEPlACEs CoMEt)

y Skills and Knowledge support to help build the skills, knowledge and connections required to commercialise new ideas. This includes:

y Up to $50,000 to pay for specialist advice and services

y Up to $200,000 over two years to assist with the recruitment of experienced executives

y Proof of Concept grants of $50,000 to $250,000 to test the commercial viability of a product, process or service

y Early Stage Commercialisation repayable grants of $250,000 to $2 million to undertake activities to develop a new product, process or service to the stage where it can be taken to market.23

21http://www.arc.gov.au22 http://www.ausindustry.gov.au/InnovationandRandD/RandDTaxCredit/Pages/RandDTaxCredit.aspx23 http://www.commercialisationaustralia.gov.au/WhatWeOffer/Pages/default.aspx


indiGEnous EMPloyMEnt ProGrAM (iEP)

The Indigenous Employment Program will help Indigenous Australians that have viable business ideas to start their own business. It can build the skills to run and grow that business. The reformed IEP will also help Indigenous organisations, business owners, communities and family groups — at any stage during the life cycle of the business, through a range of services tailored to their business needs. Eligible Indigenous businesses can also directly access commercial finance for loans through the Australian Government, in partnership with Westpac.24

Northern Territory Government Awards and Grants for renewable energy projects

MElAlEuCA AwArds

The Melaleuca Awards are sponsored by PWC and range from $100 to $10,000. Under the category ‘Environment Grants’, possible entrants can apply with tertiary level research projects (Honours, Masters and PhD).25

EnvironMEnt GrAnts

Grants of up to $10,000. Of particular interest may be the climate change category which supports projects that will promote energy efficient devices that reduce greenhouse gas emissions. Projects that focus on community preparedness and adaptation in response to changing climatic conditions will also be supported.26

Examples relevant to CDU y Energy efficiency initiatives, programs and services (e.g. energy performance contracting

services that will quantify usage, identify and prioritise saving opportunities and appropriate Demand-Side Management Technologies);

y Energy efficient design/sustainable living demonstrations

y Renewable energy demonstrations

y Greenhouse gas monitoring education campaign; and

y Projects designed to reduce overall consumption habits in communities and schools

10.7 dEsCriPtion of sElECtEd tErMs usEd in thE roAdMAP rEPortEnergy Storage. Solar energy is available for a limited time during the day and is transitory. Any form of electricity supply that can be turned on or off at any time of the day, however, is non-transitory and is supplied by stored energy. This stored energy can be in the form of electrochemical batteries, thermal energy, fossil fuels and bio-fuels, for example. Energy storage is expensive, and, in terms of the future cost for diesel fuel, of uncertain cost. To reduce the storage cost and to add long-term security, it is desirable to reduce the size or amount of stored energy required.

Renewable Energy Certificates (RECs) are created by eligible accredited renewable energy generators, with 1 REC created for every 1 MWh of electricity produced. This creates the supply side of the REC market. Through the market, liable entities can trade directly or indirectly with certificate producers to acquire certificates to meet their liability, under the Renewable Energy (Electricity) Act 2000 and Regulations 2001.

Renewable Energy Target. In August 2009, the Australian Government implemented the Renewable Energy Target (RET) Scheme, which is designed to deliver on the Government’s commitment to ensure that 20% of Australia’s electricity supply will come from renewable sources by 2020.

Smart Grid is electrical load control technology to better match load demand to the generation capability. “Smart Grid” has been used to refer to “Smart Meters” that are able to turn appliances

24 http://www.deewr.gov.au/Indigenous/Employment/Programs/IEP/Pages/InformationforBusiness.aspx25 http://www.powerwater.com.au/environment/melaleuca_awards26 http://www.nt.gov.au/nreta/environment/grants/overview.html


on and off to match generation capability. In the context of this report, the term “Smart Grid” is used in a broader sense to encompass all forms of demand-side management of electricity. This is particularly important to match demand for electricity to the availability of solar energy and thus reduce the need for energy storage (batteries, diesel, etc.).

10.8 MAxiMisinG thE EffECtivEnEss And PotEntiAl of rEnEwAblE EnErGy

Maximising the effectiveness and potential of renewable energy, in general, and PV, in particular, in off-grid power stations, requires demand-supply optimisation to suit particular characteristics of the renewable resource whilst ensuring security of supply as illustrated in the diagram below:

The key barriers to this optimisation can be broken into the following four areas:

1. Behavioural influences on consumption

For example, lights or A/C left on when building is unoccupied, taps left on.

Electricity demand for pumping water and sewage, in many communities, is significant. Savings in water usage, reducing energy needs for water pumping and sewage pumping provide a direct saving in both recurrent costs for fuel and capital costs for energy system augmentation.

2. Technical influences on consumption

For example, fridge seals broken, electric water heaters in lieu of solar water heaters, leaking water pipes.

Utilising technical design principles that reduce energy and water consumption will mitigate the energy demand increases associated with population growth and new infrastructure.

3. Power system stability

Supply stability is affected by capacity for the power system to respond to the highly variable nature of energy consumption and generation.

4. Environmental variability

Seasonal variation in temperature as well as minute to minute variation i.e. clouds.


By developing a detailed understanding of the nature of the barriers mentioned above, and potential mechanisms, including demand-management measures for mitigating their effect, the potential for a large scale roll-out of high penetration renewable energy generation may be ascertained.

Additionally, as the NT already has significant specialist background intellectual property, held in both the private and public sector, to achieve such a goal, the challenge of lifting the renewable energy contribution toward 100% offers the NT a unique chance to build valuable capacity in this important emerging field. The development of a local industry that can export knowledge and systems to similar communities around the world is an exciting possibility.

Demand-management and energy efficiency initiatives are therefore integral to achieving the full potential of any renewable energy generation solution, and the Taskforce will be addressing these issues in its continuing work as advisors to the Government on strategies, incentives, and pathways to make the Territory a world leading provider of green energy in remote areas.


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10.9. sChematiC of Conventional poweR station vs stabilised Renewable eneRgy poweR station

On the left is a convential power station. Power generation is stablebecause fuel supply is stable.

On the right is a solar or wind based generator where daylight and windare variables causing energy supply to be unstable. Putting the output power from a renewable energy generator through a stabiliser allows stableenergy to be provided to the users.

Energy

Stable Energy to:

TIMESTABLE STABLE

Legend

Energy Flow

COMMUNITYPOWER SUPPLY

POWER FROM CONVENTIONAL POWER STATIONS (E.G DIESEL OR GAS)

Conventional Power Station Renewable Energy Generator

POWER FROM RENEWABLE ENERGYSOURCE (E.G SOLAR OR WIND)

Energy Energy Energy

TIMESTABILISER

TIMEUNSTABLE

TIME

Unstable Energyto Stabiliser

Power Stabiliser

Stabilisation

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