Emma Chessell and Lucy Carew-Reid
Local councils have always been leaders in solar PV. Back in 2003, Australia’s largest early commercial system was the City of Melbourne’s 200kW array on the Victoria Markets. These days, the number of ways local government can source solar power is growing exponentially. The actual panels are now old hat, but what should councils do about battery storage, power purchase agreements, the Renewable Energy Target and National Energy Guarantee, community solar, peer-to-peer trading? Not to mention the other technical and policy nuances out there!
Leading on solar means making plans in a changing policy landscape, and developing new ways to benefit from large-scale renewables, like PPAs and group procurement.
Ironbark held a webinar on 5 December 2017 to discuss these exciting opportunities and provide guidance on where to start. Panelists were:
- Mark Shorter, Eurobodalla Shire Council, on solar opportunities for regional councils and how they are achieving their 100% renewable energy target (2:33)
- Harry Fricke, City of Moonee Valley, on solar installation learnings and the potential of installing solar on other people's roofs (17:22)
- Adam Zaborszczyk, City of Melbourne, on a solar PPA group procurement model (31:22)
- Emma Chessell and Lucy Carew-Reid, Ironbark Sustainability, implications of the end of the Renewable Energy Target and some council case studies and solar strategies (49:48)
Here's the webinar Power Point and below is the webinar recording, followed by a brief summary of what was discussed.
Another valuable resource is the Melbourne Renewable Energy Project's guide to help you navigate large-scale renewable electricity procurement.
Changing Policy and the Impact on Councils
The Renewable Energy Target (RET) is reaching its 2020 target and it is currently uncertain what future energy policy will mean for renewable projects.
The RET will continue to provide an upfront discount to new small systems (under 100kW) after 2020. However, under the current policy, small systems will be awarded small-scale technology certificates (STCs) at a decreasing rate every year from now until 2030 (unless the current rules are changed as part of a new energy policy).
The table to the right is an example of how – under the current policy – the STCs will diminish until they fizzle out completely in 2030. In 2018 a system will be awarded 13 years worth of certificates, in 2019 only 12 years worth of certificates, in 2020 only 11 years worth and so on. To put this in perspective, in 2018 a 6kW solar system would generate around $3,500 worth of STCs (which can be claimed immediately). In 2024, the same sized system would be awarded little more than half that under the going price.
Certificates for large generators (LGCs) are granted as the system operates, not up front, and their value is determined by a market. The renewable energy projects currently in advanced planning are now approaching the supply level needed to reach the 2020 target, and there is competition between proposed projects to secure contracts for the remaining volume of LGCs. Therefore after the 2020 target is reached, the program won’t create an increasing demand to support new generators.
So what does this mean for councils?
The small scale solar paybacks with or without STCs remain under 10 years, which is still a sound payback. It does, however, make sense to get going now on installing small scale solar while the payback is around 6 years. And for large scale solar, the boom of construction in the next two years is likely to provide opportunities for councils to engage with projects-in-planning to negotiate power purchase agreements, or to install large scale solar themselves.It's important to note that for some councils who choose to “surrender” rather than sell their certificates as part of their sustainability strategy (i.e. the renewable energy they produce or purchase is additional to the national target), the future of the RET doesn’t impact them at all.
In conclusion, councils can continue their march towards a carbon neutral future regardless of this latest policy change.
Small Scale Solar – Common Council Projects
Most Australian local governments have installed solar PV on some council buildings. Many are now undertaking a council-wide approach, and assessing their entire building stock to identify the favourable project sites.
Harry Fricke from City of Moonee Valley showed us clearly where the benefits are in the installation and management of installs at the council level. Moonee Valley oversees a sizable generator of 2,000 panels across their buildings. A combined plant of this size warrants a dedicated maintenance program – which has paid dividends in identifying performance problems that would otherwise likely continue unchecked. Given the scope of the maintenance issues picked up, Moonee Valley has adjusted its procurement procedures to better accommodate faults rectification.
A whole-of-council solar feasibility study can form the basis of a strategy which ensures council gets the full benefit from rooftop solar. Contact Ironbark to discuss.
Large Scale Solar
Large systems are also being pursued by local government – especially where the behind-the-meter capacity is maxed out. Councils are finding innovative ways to make this work – like power purchase agreements, and group procurement.
Eurobodalla Shire Council have completed 700kW behind the meter, and are now investigating options for meeting their 100% renewable target by 2030. They determined they need 15MW in total to meet their target. Should a solar farm be built in the region to cater for this, it would bring around $30M of investment to their municipality.
With ownership of a generator within their municipality being out of the question for City of Melbourne, they drew on the power of partnerships to negotiate a landmark 10-year power purchase agreement with a renewable energy generator in development. City of Melbourne brought together a group of fourteen large electricity users, including three other councils and a range of other entities, to pool their buying power. They will purchase 88GWh from the Crowlands Wind Farm (a third of the site’s generation,). This will provide project partners with a saving on the purchase of green energy needed to meet their climate goals.
To assist others on their renewable energy procurement adventure, they have created a guide to buying off-site renewable electricity.
These types of innovative power purchasing arrangements, pioneered by councils and other organisations in Australia, have brought security and value to new projects while future policy has been uncertain. This has been a significant benefit both to developers and to green energy users.
And note! In early 2018 we will hold a webinar on the ins and outs of procuring, installing and managing solar power on council roofs. We will discuss in depth how to judge a solar tender submission, council internal approvals processes, ensuring proper commissioning is part of the contract, and performance monitoring and maintenance. Stay tuned via our newsletter.