Executive Summary

This report aims to identify renewable  energy options for Noosa.  It includes a review of the electricity grid and electricity use, as well as existing renewable  energy generation.  It also discusses  the range of possible business models that may be suitable for driving increased uptake of renewable energy, before making specific recommendations  on actions that can be taken in Noosa,  with a special focus  on those  driven  by the community.  It includes  a section  where  different  scenarios  for renewable energy  uptake  are modelled  to illustrate  the impact  of different  technology  choices.  It concludes  with a discussion and a list of recommended actions.

1. Introduction

Over the last five to ten years the cost of renewable energy technologies, in particular solar photovoltaics (PV), has declined significantly. Solar PV is a modular technology, meaning it can be deployed at any scale, from smaller household systems commonly between 1 kW and 10 kW, through systems suitable for a local business, to large-scale ground-mounted systems that range from 100 kW to tens or even hundreds of MWs.

The suitability  of PV for smaller  systems  has opened  up opportunities  for individuals  and communities to generate their own electricity. More recently, the price of batteries has declined significantly, and there has been progress in the development of energy management systems, which allows PV, batteries and other technologies such as solar water heaters to be integrated into effective distributed energy systems.

Other renewable energy technologies such as wind, hydro, bioenergy, tidal and wave power have also seen advances,  with wind and hydro available  as smaller-scale  options suitable for household and community distributed energy.

These technologies  have a number of benefits beyond financial savings. They create local employment, which can occur directly when they are installed, as well as indirectly because less money leaves the community in the form of electricity bills – meaning that more money remains to circulate through the local economy, which creates additional indirect employment.

They can also provide local resilience, where the integration of batteries can provide support to the electricity network during times of peak demand, and maintain power supplies in the event of loss of the network. This is not only more convenient but can be critical in times of emergency response.


1.1.  This Report

East Gippsland  Shire Council  has received  funding  through  the Victorian  Climate  Change Grants  2015  and  the  New  Energy  Jobs  Fund  to  run  a  Project  that  helps  research  options, engages  with  the community  and  develops  practical  proposals  for renewable  energy  projects within East Gippsland. The energy setting in East Gippsland features unique, often edge of grid, regional communities with a variety of opportunities and constraints.

This Technical  Study is the first of three stages of the overall Project,  with the other two stages being Community  Consultation  and the Development  of Detailed Business Cases. This Technical  Study  is being  run  in parallel  with  the  Community  Consultation  stage,  and  so has benefited from consultation with AusNet, East Gippsland Water, the Department of Environment, Land, Water and Planning (DELWP), large energy users, solar installers, and community groups (U3A, GELLEN, MSEG) and individuals. 

This report is divided into the following Sections:

Section 2 (Current Electricity Grid, Usage & Solar) characterises the existing electricity grid and current or potential constraints which could be alleviated by renewable energy, or which may restrict the amount of renewable  energy that can be connected.  It also characterises  the total amount  of  electricity  used  in  East  Gippsland  Shire  as  well  as  the  current  renewable  energy generation in the region.

Section 3 (High Level Issues) then discusses issues that should be taken into consideration regarding additionality to legislated targets, where the renewable energy should be built, and the nature of the ownership of these technologies.

Section  4  (Business  models)  then  discusses  the  range  of  business  models  and  other approaches  which may be relevant for increasing renewable  energy in East Gippsland.  These range from ways to drive uptake at the household level through to larger-scale community-owned options.

Section  5 (What Can EGSC do?) then identifies specific actions that EGSC and the local community can undertake. After discussing how the provision of information can be used to drive uptake of both energy efficiency and renewable energy, it proposes some options to improve land use  planning  to  help  enable  renewable  energy  uptake.  Finally  this  section  proposes  some programs  that  can  be  used  to  enable  uptake  of  renewable  energy  in  the  residential  and commercial sectors in East Gippsland, as well as large-scale and end-of-grid systems, including opportunities for community ownership.

Section 6 (Renewable Energy Resources and Technology Options) builds on the preferred options identified through the community  consultation  and uses the region’s renewable  energy potential to model different scenarios for increased uptake.

Section 7 (Discussion & Recommendations)  then concludes the report by summarising the main outcomes and actions suggested for EGSC.

This report has been written in language that is as plain as possible, however some technical jargon and concepts are unavoidable. Rather than over simplifying, we hope it will help to provide the education that is necessary to significantly increase the amount of renewable energy in East Gippsland Shire. 
 

2. Current Electricity Grid, Use & Solar

Modify this for Noosa

 

Figure 1 shows the Australian  Renewable  Energy Mapping Infrastructure  (AREMI) map of East Gippsland. It can be seen that there is a 66kV line connecting Bairnsdale Power Station to both Bairnsdale and to the Morwell Zone Substation (ZS). The Bairnsdale Power Station is a 94
MW Open Cycle Gas Turbine owned by Alinta Energy.

To the north-west are the Clover transmission ZS (at the Clover Power Station) and Mount Beauty transmission ZS, shown as the orange dots at the top left of Figure 1. The black nearby dots are the 300 MW Bogong/Mckay and 31 MW West Kiewa hydro power stations, both owned by AGL Hydro Partnership. However, there are no connecting lines to East Gippsland from these ZS or power stations. Figure 2 shows AusNet’s high voltage lines in East Gippsland as of 2012. It clearly illustrates the ‘end-of-grid’ communities that are at the very end of long lines.

Energex Noosa Zone Sub map.png

Information  on current and predicted  network capacity  constraints  is available  in AusNet’s Distribution Annual Planning Report (DAPR).1 In addition to the Bairnsdale Power Station, there are  two  ZSs  in  East  Gippsland:  Newmerella  and  Cann  River.  These  are  connected  to  the Bairnsdale Power Station by a single radial 66kV line.

For Bairnsdale, the DAPR states “The Bairnsdale zone substation (BDL) has no energy at risk during both the summer and winter periods. AusNet Services completed a station rebuild and asset replacement project at BDL in 2015/16, improving supply reliability for 22,300 customers.”

For Newmerella, the DAPR states “The Newmerella zone substation (NLA) has energy at risk during the winter period only over the five-year forward planning period. The load at risk reaches
0.8 MVA in winter 2017 and remains until 2021. This relatively low level of energy at risk is able to be covered by load transfers of 3.2 MVA away from NLA to the neighbouring  Bairnsdale zone substation.  Therefore  no  augmentation  is  expected  in  the  five-year  forward  planning  period” (p57). The DAPR also states that the energy at risk is only 5.4 MWh in 2016 then decreases
every year, declining to 1 MWh in 2021.


1 Distribution Annual Planning Report 2017 – 2021, (AusNet, Dec 2016) available from:  www.ausnetservices.com.au 

In the ‘Technical Background Study’ by FG Advisory, the Cann River ZS is said to have a
3MVA capacity shortfall, which could limit the uptake of renewable energy. However, this is not really the case. The Cann River ZS has a rating of 10MVA  and the forecast  demand  is only
3.0MVA.  In  the  DAPR  it  is  said  to  have  a  firm  capacity  of  zero  because  it  has  only  one transformer, so if this fails, there is no reserve capacity. Firm capacity is determined under the n-1 principle, which assumes that one unit fails. Newmeralla has two transformers and so conforms to the n-1 principle. Thus, this zero firm capacity for Cann River ZS is not relevant to the uptake of renewable energy as it doesn’t restrict uptake nor can it be fixed by it. It can only be fixed by the addition of another transformer, which AusNet considers unnecessary. AusNet have stated that: “There are no forecast capacity constraints in the East Gippsland area”.2


2.1.  Restrictions placed on renewable energy

The network  operator,  AusNet,  can place restrictions  on the amount  of renewable  energy connected to their network because of the potential for technical impacts. The electricity network has been designed for a one-way flow of electricity (mainly from large centralised power stations to the various customers such as households and businesses), not the connection of renewable energy  generation  systems  to the distribution  network.  When  there  is a significant  amount  of electricity exported to the grid from distributed generation, this can result in voltage rise (which can send the voltage outside allowable limits) and can even reverse the flow of electricity back up the network.  This  is already  occurring  in both  Paynesville  and  Metung,  however  AusNet  can currently  allow  for  this  remotely  or  automatically  using  voltage  regulators  and  automatic  tap changers. In addition, if a significant amount of the renewable energy systems are solar PV, their power output can fluctuate rapidly depending on cloud cover, and so the load as seen by the grid can fluctuate just as rapidly. Another problem that can occur on smaller weaker grids is when the frequency of the network fluctuates outside allowable limits. This can be caused by large loads coming online, which can in turn trip off the solar PV inverters  because  they are designed  to disconnect  when  this  occurs.  This  can  make  the  problem  worse  because  this  loss  of  PV generation drops the frequency even more. However, this is solved by broadening the frequency range through which solar PV inverters stay connected, and is not a problem in East Gippsland anyway, since it is connected to the wider Victorian grid.

To pre-emptively minimise such impacts, AusNet currently limits the total inverter capacity for a single-phase connection (ie. a normal household) to 5 kW. For a three phase connection, which generally occurs on businesses with larger loads, the limit is 15 kW. Note that this limit includes any  battery  inverter  that  is  also  connected.  In  most  cases  a  single  inverter  (called  a  hybrid inverter) will be used for both the PV and the battery system. However, some batteries (such as Tesla and the SMA Sunny Boy Storage, which are AC coupled inverters), have their own inverter, and the capacity of both this inverter and the PV inverter will be taken into consideration.
The current situation could be improved by the 5 kW limit being placed on the amount of export to the grid, not the total inverter capacity. All modern inverters can be configured in this

2 Personal communication  from Tom Langstaff (AusNet) 

household could install an 8 kW PV system, which would mostly generate a maximum of 6 to 7 kW, and if their load was 2 kW, only 4 to 5 kW would be exported. If their load was less, then the export  would  automatically  be  capped  at  5  kW.  This  would  mean  larger  systems  could  be installed while still allowing AusNet to control the power going back into the network.

At much higher levels of uptake than are likely to occur in East Gippsland in the foreseeable future, other network operators have either restricted PV systems to zero export to the grid, or have required batteries that can be used to smooth out fluctuations in power output. However, AusNet have no plans to change their current approach.


2.2.  Electricity Use

The current electricity use in East Gippsland was determined using 2016 half hourly demand data provided by AusNet Services from the Bairnsdale (BDL), Newmerella (NLA) and Cann River (CNR) ZSs that service East Gippsland.  The total annual load through these substations  was approximately  265,000  MWh,3 and the annual  demand  profile  is shown  in Figure  3. The blue corresponds to Bairnsdale ZS, the green to Cann River ZS, and the orange to Newmerella ZS. It
can be seen that the highest peaks generally occur in winter, and that most electricity use occurs in winter. It is not clear what has created the very high spikes, and they may be a data error. The periods where the load drops to zero are data errors.
 

Tewantin Zone Sub monthly 2016 2017.png

3 This is an estimate because of gaps in the data provided by AusNet. 

There  are  about  19,160  households  in  East  Gippsland  Shire,4 and  the  average  Victorian household uses 4,026 kWh of grid electricity per year.5 Thus, households make up about 29% of the electricity demand in East Gippsland, with the remainder used by business and industry.

The existing distributed generation (DG) reduces the amount of electricity drawn through the ZSs. Thus, to obtain the real underlying electricity use in East Gippsland, this DG electricity must be added back to the apparent electricity use as seen by the ZSs. This is explained in detail in the following section.


2.3.  Existing Distributed Generation

Solar PV is by far the most prevalent form of distributed generation in East Gippsland Shire. It reduces  the  amount  of  grid  electricity  used  (by  reducing  the  amount  of  electricity  that  is transmitted through the ZSs above). Therefore, to obtain the actual underlying electricity demand for  the  modelling,  each  half  hourly  period  of  electricity  use  was  increased  by  the  estimated amount of PV generation.

According to the Australian PV Institute Solar Map6 there is currently 16,041 kW PV installed in East Gippsland Shire.7 This consists of 4,573 systems (14,489 kW) that are less than 10 kW in size (generally assumed to be residential systems), and 79 (1,551 kW) in the 10 kW to 100 kW size range  (generally  assumed  to be commercial  systems,  which  would  mean  about  1.8%  of businesses have solar PV, with an average size of ~20 kW). Although there are about 24,440 dwellings in East Gippsland Shire, only about 21,310 of these are considered to have suitable roof space for PV and SWHs.8 Thus, with 4,573 PV systems in the sub 10 kW size range, about
21.4% of suitable dwellings have PV, and the average residential system size is about 3.2 kW.

Electricity   generation   by  distributed   PV  was  calculated   by  taking  the  average  hourly generation of typical rooftop PV systems within 100 km of East Gippsland Shire.9 This was then scaled according to the number and size of PV systems 10 to produce an estimate of the hourly generation  over a year. The same  approach  was used for future  installations  of PV for each Scenario,  both behind the meter (household  and businesses)  as well as in front of the meter
(ground-mounted large-scale PV).11

4 2016 Census, ABS.
5 AEMC (2016) ‘2016 Residential Electricity Price Trends’, Australian Energy Market Commission, Dec 2016.
6 http://pv-map.apvi.org.au/historical#8/-37.305/148.260
7 As at April 2017
8 Derived from the 2011 Census, and the APVI Solar Map.
9 PV data was sourced from publicly available PV performance database,  PVOutput.org. This large area was used in order to obtain a representative sample, as not all PV systems are on the  PVOutput.org database. The average system generated 1,152kWh/kWp,  which is very close to the Clean Energy Regulator zone rating of 1,185 kWh/kWp.
10 From  http://pv-map.apvi.org.au.
11 Ground-mounted  systems generally have better orientation and so higher generation, and so a subset of optimally oriented PV systems was used to calculate the ground-mount output. 

Thus, these PV systems generated an estimated 18,500 MWh of electricity in 2016 (or 7% of total demand),  and so the real underlying  electricity  used in East Gippsland  Shire was about
283,500 MWh. To illustrate the impact of PV on the daily load as seen by the substations, Figure
4 and Figure 5 show an average week in summer and winter respectively showing the load as seen by the substations (Net load, orange) and what the load would have been if it hadn’t been for the existing PV systems (Load, blue). The highest peaks in summer are most likely due to air conditioning load, and are slightly reduced by solar. The equally spaced daily spikes are when the off-peak load is activated, and in winter are even higher than the summer maximum peaks, and of
course are not reduced by solar (because they occur soon after midnight).12  Although there is
also likely to be some small-scale wind turbines and micro-hydro, they were not included in the baseline adjustment because they would have a negligible effect.

The current renewable energy percentage under the Federal Large-scale Renewable Energy Target for Australia is 14.22%. Thus, when the electricity generated by local solar PV is included, East Gippsland Shire has a higher percentage,  with just under 20% of the electricity  currently used being renewable.
 

3. High Level Issues

Generating community support for increasing the uptake of renewables is not simply a matter of identifying the technologies to be used and then selecting appropriate business models to roll it all out. There are two ‘high-level’  issues that first need to be taken into consideration.  These should be raised at the community consultation sessions because they may affect the technology choices and the types of business models that people wish to use.

1.   Will the renewable energy be in addition to the Renewable Energy Target?

2.   To what extent should the renewable energy systems be owned by the community within
East Gippsland Shire?

Will the renewable energy be additional to the Commonwealth Renewable Energy Target?

The  Renewable  Energy  Target  (RET)  is made  up  of  the  Large-scale  Renewable  Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). It is expected to result in about  23.5%  of Australia’s  electricity  coming  from  renewable  sources  by 2020.  The Victorian Renewable Energy Target (VRET), which is separate to the RET, is discussed below.

The LRET is to have 33,000 GWh of renewable electricity generated in 2020, maintained until
2030. Renewable energy systems with a rated peak capacity of 100 kW upwards create a Large Generation Certificate (LGC) for every MWh of electricity they produce. In brief, if the renewable energy systems built in East Gippsland are 100 kW or greater, they can be used to meet the LRET. This would just mean that other renewable energy systems, that otherwise would have been  built  to  meet  the  target,  no  longer  need  to  be  built.  Thus,  these  systems  built  in East Gippsland  would  not  increase  the  total  amount  of  renewable  energy  generated  in  Australia (unless  the  LGCs  are  instead  extinguished  and  not  used  to  meet  the  target,  as  occurs  for GreenPower and the ACT government’s reverse auctions).

This is all complicated by the fact that the target does not increase beyond 2020. This means that, after this date, there should already be enough renewable energy generation built to meet the 33,000 GWh target. This in turn means there will be no more demand for LGCs, which means their value should approach zero. In this case, any new large-scale plant would have to be built without using LGCs (and so would need to be cheap enough to not need LGCs), in which case they would be additional to the LRET target.

The SRES applies to renewable energy systems that are less than 100 kW, and also uses certificates that each correspond to 1 MWh of renewable electricity, but are called Small-scale Technology Certificates (STCs). The SRES is different to the LRET in that the STCs aren’t used to meet  a target,  but instead,  no matter  how  many  are  created,  they  must  all be bought  by electricity  retailers  in  Australia.  This  means  that,  if  renewable  energy  systems  built  in  East 

increase the total amount of renewable energy generated in Australia.

The VRET is different to both the LRET and the SRES in that it does not involve the use of certificates. As such it is not affected by the above additionality issues. Instead it involves a range of activities, including the use of reverse auctions to drive uptake of renewable energy, that aim to create the environment in which the ‘25% by 2020’ and ‘40% by 2025’ targets can be met.

Should the renewable energy systems be owned by the East Gippsland Shire community?

This doesn’t relate to the additionality of renewable energy but instead to the resulting social and economic benefits. Currently, a large amount of money leaves East Gippsland Shire every year through electricity bills. Just paying for the electricity to be generated outside the Shire costs around $11 million per year. 13

Where  renewable  energy  systems  are  owned  by  individuals  and  organisations  within  the
Shire,  the  money  saved  because  of the  electricity  they  generate  circulates  through  the  local economy, creating local employment.14


13 We have not included the costs for transmission and distribution of the electricity because transmission makes up a fairly small proportion of the cost and local distribution costs will still need to be paid one way or another.
14 Although the renewable energy systems need to be paid for, about a quarter of the system cost goes to local installers, and most PV systems pay themselves off after 4 or 5 years, so after that, all the avoided electricity costs represents money that stays in the area. 
 

4. Business Models

This section  describes  the different  approaches  or ‘business  models’  that can be used to drive uptake of renewable energy technologies. The emphasis of this report is on identifying new business opportunities that the community can develop. This means they should be both commercially available and readily deployable – meaning they shouldn’t require long periods of renewable  energy resource  assessment  (eg. wind monitoring,  tidal flow analysis),  followed  by pre-feasibility and feasibility studies etc. Solar PV also has very short payback times (around 5 years for residential, and 4 to 9 years for commercial-scale), and has no moving parts and so is very reliable and requires very little maintenance. As a result, solar PV and solar water heaters were assumed to be the predominant technologies, although there will of course be some uptake of small-scale  wind and small-scale  hydro – and many of the business  models and programs discussed in this report could be applied to these technologies also.

Bioenergy is not addressed in detail here because East Gippsland Water (EGW) is already pursuing this option, and are best placed to take it forward. EGW currently operate a combined heat  and  power  system  running  on  methane  generated  from  the  anaerobic  digester  at  the Bairnsdale Wastewater Treatment Plant, and are trialling adding food waste – which increased methane production significantly. EGW’s intention is to develop a business case for expansion of food  waste  co-digestion  on  a  regional  scale  in  partnership  with  regional  food  manufacturing bodies. Co-digestion products may include electricity, heat, carbon dioxide for greenhouses and compost.

There  may  be sufficient  wind  resource  for large-scale  wind  in East  Gippsland,  especially inland, however as discussed in Section 6, these locations are not close enough to transmission lines with sufficient capacity. Thus, we assume only limited opportunities for small-scale wind.

Although the focus here is on renewable energy, it is always a good idea to try to incorporate the uptake  of energy  efficiency,  because  this  can  both  reduce  operating  costs  and  any  load reductions from energy efficiency also reduce the capital cost of the chosen renewable energy technology when it is sized to optimally match this reduced load.

Section 5 then draws on these options to propose specific examples of actions that EGSC
and the local community can undertake.
 

5. What Can Noosa Do?

Renewable  energy  will  be  an  important  community  priority  for  reducing  the  impact  of increasing energy costs and East Gippsland Shire Council has a number of options to support that goal.

1.     Information  and  education  provider  –  a  source  of  information  and  expertise  for community members and businesses wishing to benefit from renewables.

2.     Advocate  –  putting  the  case  to  government  for  funding  and  supporting  renewable energy projects.

3.     Facilitator  –  Assisting  with  grant  funding  sources,  project  development,  and  pre- feasibility processes for community and business initiatives.

The  aims  of  this  particular  project  and  report  are  to  investigate  the  most  appropriate renewable energy technology options for East Gippsland and so identify priority projects based on technical expertise and feedback from consultation with the community. In the next stage, once priority projects have been identified, they will have detailed business cases developed to help attract  and  facilitate  new  investment  in  the  region.  Thus,  this  report  doesn’t  describe  all  the possible actions that EGSC can undertake, but rather identifies the highest priority projects for the area. It is unlikely that EGSC currently has sufficient resources to implement these proposals, and so their success is dependent on EGSC obtaining dedicated funding. Given the community focus of this undertaking, the projects have been categorised into residential, commercial-scale, large- scale, end-of-grid and community-owned. Because the provision of information and education is important across the board, we first briefly identify some key sources of information.


5.1.  Information & Education

EGSC  is well placed  to be seen  as a reliable  source  of information,  not only  during  the community info sessions, but also on an ongoing basis. Indeed, council already has a general Energy Use and Savings website:

http://www.eastgippsland.vic.gov.au/About_Us/Our_Environment/Energy_Use_and_Savings

As identified  in Section 3.2, increased  uptake of energy efficiency  can significantly  reduce costs faced by customers and can help integrate renewables into customers’ load profiles. Energy efficiency and demand side management can also be used to shift and reduce evening loads – thereby increasing the level of local energy self-sufficiency. Thus, the following firstly focuses on energy efficiency then on renewable energy. 

5.1.1.     Energy Efficiency

There is no shortage of actions that can be taken to reduce electricity use through energy efficiency, and potentially through demand-side management. The range of actions that can be taken is well documented on a range of websites and other reports – for example, see Table II.

Table II Some Sources of Information on Energy Efficiency Actions


Type of information    
Source

Household general    
http://yourenergysavings.gov.au/guides/reduce-your-energy- bills?page=3

Household appliances    
https://www.victorianenergysaver.vic.gov.au/residential-efficiency- scorecard and  http://victorianenergysaver.vic.gov.au/more-ways-to- save/energy-saver-incentive

Household fridges &
freezers    http://www.fridgebuyback.com.au/fridge-energy-saving-tips/ & https://www.ergon.com.au/retail/residential/home-energy- tips/appliances/fridges-and-freezers

Air conditioners    
http://www.currentforce.com.au/CompareAirConditioners.aspx

House design    
http://www.yourhome.gov.au

Renew Economy    
Online free articles on renewable energy and energy efficiency, http://reneweconomy.com.au

ATA Renew Magazine    
Magazine for ATA members,  http://renew.org.au

A Green House
Around the Corner    
Interesting stories about the energy efficiency journey!
http://www.agreenhouse.net.au

Business general    
http://www.environment.nsw.gov.au/business/energy-efficiency.htm and  http://www.sustainability.vic.gov.au/services-and- advice/business/energy-and-materials-efficiency-for-business   and https://www.solaraccreditation.com.au/dam/cec-solar-accreditation- shared/guides/Guide-to-improving-electricity-use-in-your-business.pdf


Information  on  the  available  options  can  be  made  available  to  the  community  through  a variety of sources:

a.   Full-page newspaper spreads. These can provide simple tips for ways to reduce energy use, along with links to useful sources of information.

b.   Online Energy Info Hub: An East Gippsland-specific  website, where the most relevant information is collated. This would pull together, vet, and provide access to reliable information and tools that are most relevant to East Gippsland Shire. It could include, for example, detailed reports; easy to read, well presented information on energy efficiency and     renewable        energy        for        households        and        businesses        (e.g. http://www.yourhome.gov.au/);  one or more public discussion forums on different topics; 

a  brief  description  of  the  various  groups  in  East  Gippsland  Shire  and  links  to  their websites; and summaries of current projects and campaigns.

c.   A Community Energy Information Hub: This would be a shopfront where people could drop in for authoritative  impartial advice. It could cover general information  as well as targeted   advice   suitable   for  builders,   architects,   electricians,   council   officers   etc. Although volunteers could staff such a centre, there would also be a need for trained staff. Its purpose is to provide information on renewable energy technologies, help raise energy awareness in the community, enable better communications through a ‘hub’ and could even act as a base for energy coaches (see below) to operate from and where people can request energy audits.

Energy efficiency  actions typically have a simple payback time of less than 4 years, often much less. This means they are like taking out a term deposit set at almost 25% interest, and yet it can be quite difficult to get households and businesses to take them up!

There is a range of reasons for this: lack of interest; lack of time to investigate the options; lack of good information (not only on the options that exist, but even on energy efficiency’s effectiveness); although the payback is high, the total amount of money saved can be quite low, and so not worth the effort; the split incentive problem (where a landlord would have to pay for the energy efficiency but the tenants get the benefit); for larger items such as SWHs the upfront cost may be too high; etc.

It is because  of this  variety  of reasons  that  passive  provision  of information  is often  not enough  to maximise  the uptake  of energy  efficiency.  The following  summarises  activities  that could be used to help convert simple information into the adoption of energy efficiency options in East Gippsland Shire.

ATA’s Sustainable House Day

The Sustainable House Day is run by the Alternative Technology Association and is where people can open up their sustainably designed homes to the general public – ones that are not only environmentally friendly, but cheaper to run and more comfortable to live in. It gives visitors a chance to inspect houses that have been designed, built or renovated with sustainability in mind as well as the opportunity to talk to owners and receive unbiased advice. https://sustainablehouseday.com

Energy assessors

Energy assessors can be used to carry out home energy audits, and give talks at events and to local community organisations. Although they can generally be sourced from volunteers, they will need  some  form  of formal  training.  GELLEN  may be a suitable  starting  point for training energy assessors, possibly with the help of existing local technical energy experts e.g., the U3A environment sustainability group in Bairnsdale. This could be based on the use of the Victorian government’s  Residential  Efficiency  Scorecard.  This  is  a  program  where  trained  assessors provide  a  star  rating  for  a  home  based  on  its  construction,  the  running  costs  of  the  fixed 

appliances  and  other  features  such  as  PV  or  SWHs.32 Training  is  provided  by  DELWP.  The Victorian  Energy  Efficiency  Target  (VEET)  Scheme  offers  incentives  for  installation  of  high efficiency equipment. This program is also called the Energy Saver Incentive33. Local accredited installers  could install a range of low cost measures  like weatherstripping,  seals and chimney dampers. The program also covers replacement of hot water and heating systems as well as the
purchase of high efficiency appliances.

Community Engagement

There are many ways to actively engage with the community:

a.   A  competition  or  community  workshop  for  ideas  to  drive  energy  efficiency.  With  the uptake of energy efficiency being such an intractable problem, it may be that the best solutions will come from the community and businesses themselves.

b.   East Gippsland Energy Saving Challenge: This could be a competition run by EGSC that includes a high quality fact sheet that could form the basis of the full-page newspaper spread outlined above.34

c.   Sustainability Street: This is where an entire street undertakes energy education, energy efficiency and renewable energy actions in order to maximise cooperative benefits. It can include ‘weatherisation programs’ that aim to improve the building envelope, especially in low-income  homes.  A  particularly  powerful  aspect  of  activities  such  as  Sustainability Street is peer group support. Once households see what other households are doing, and benefiting from, they are much more likely to do these things themselves.

Solar water heaters and heat pumps

About 25% of households in East Gippsland Shire currently have solar water heaters or heat pumps, and the scenarios described above result in significantly higher uptake, and so here we cover SWHs in a little more depth than other energy efficiency options.

Where a significant amount of electricity is provided by solar PV, a large amount of electricity will be drawn from the grid overnight. Water heating generally uses off-peak electricity (overnight), and so SWHs can be very effective in reducing the amount drawn from the grid.35 However, as discussed above, the effectiveness of SWHs can vary greatly. The amount by which they reduce the electricity used to heat water can vary between 20% and 90%. It is generally not possible for
a householder to assess the performance of their solar water heater from their energy bills and other readily available information. A recent study regarding the installation and use of SWHs in
Australia found that:51

32  https://www.victorianenergysaver.vic.gov.au/residential-efficiency-scorecard
33  https://www.victorianenergysaver.vic.gov.au/more-ways-to-save/energy-saver-incentive
34 An example of a fact sheet can be found here  http://www.byron.nsw.gov.au/publications/fact-sheets
35 PV diverters can also be useful in this regard. Instead of excess PV electricity being exported to the grid, it is diverted to a storage hot water tank. 

a.   Households generally lack the information to buy the right type and size of SWH to suit their needs, as well as where to place it.36 This can act as a barrier to uptake.

b.   Households  generally don’t know how to either use their SWH or adjust their habits to maximise its ability to reduce electricity use. As a result they are unsure how much money they have saved, if any.

c.   SWH installers generally provide limited, if any, advice on how to use the SWH.

d.   There is a clear need for independent unbiased advice for both purchase and operation, and community groups/events and word of mouth from friends are considered the most reliable sources.

e.   Households  can  be  classified  as  either  active  or  passive  users  of  their  SWHs,  and information should be sculpted to these different groups.

Thus, there is a need for options to encourage uptake, such as the ‘Farming the Sun’ solar water heater bulk buy in the Northern Tablelands,37  but also a need for complementary measures such as:

-    A pamphlet on how to operate a SWH that is provided along with all installations38

-     Information, both online and as a pamphlet, on how to choose a SWH of the correct size, type etc

-     Possibly  some form of training  of SWH installers  on what customers  really want. This could include a low-flow showerhead (that has a payback time of less than 6 months).

Heat pump systems can offer a more flexible option to SWHs and their performance is usually comparable, if not better, for efficient systems. Heat pumps can overcome issues of shading, roof orientation  and  roof  strength  that  often  create  major  issues  for  solar  thermal  water  heaters. However, it is important that heat pump water heaters have a high rating under Victorian climatic conditions if they are to perform well in East Gippsland, and they can be quite noisy and so need
to be located away from neighbours.

36 The report found a wide variety of problems with installation, including solar panels shaded by trees, solar panels facing in the wrong direction, lack of proper insulation, tanks or panels that were undersized, water pipes that were sub- optimally routed or positioned, and panels supported on vulnerable structures.
37  http://farmingthesun.net/bulk-buys/solar-hot-water-package/
38 This can include simple advice such as the benefit of showering early in the day (so the sun has time to reheat the water before the overnight boost). 

5.1.2.     Renewable Energy

Financial assessment tools

There  are  various  tools  that  households  and  businesses  can  use  to assess  the financial outcomes of solar PV systems. For example:

Solar Potential Tool

The Australian PV Institute (APVI) has developed the Solar Potential Tool,39 which is a free online tool for estimating  the potential  for electricity  generation  from PV on particular  building roofs.  The  tool  accounts  for  solar  radiation  and  weather  at  the  site;  PV  system  area,  tilt, orientation; and shading from nearby buildings and vegetation. Host sites potentially interested in installing PV can do their own preliminary assessment on the optimal size and financial return. Currently it only applies to capital cities (eg. Sydney City, Melbourne City, etc) but is currently being applied to Ku-Ring-Gai and Willoughby council areas.

Sunulator

The  Alternative  Technology  Association’s  Sunulator  is  free  and  is  similar  to  the  Solar
Potential Tool above, but also allows the user to take account of their own energy use and tariffs
– which is useful if the PV system is likely to have significant amounts of export. In this case it would provide a more sophisticated and accurate estimate of the financial outcomes. It can also model  a  battery  storage  option.  However,  it  does  not  incorporate  local  solar  radiation  and shading, and is more complex and so more difficult to operate.40

Information booklets

There  are  also  various  information  booklets  available  on  solar  and  batteries  for  both households and business. For example:

Guide for Installing Solar PV for Households

This is produced by the Clean Energy Council and includes the following topics.41

•   The different types of solar PV systems
•   How much will it cost?
•   Government incentive schemes
•   Feed-in tariffs (the amount your electricity company pays you for excess power)
•   Choosing the right size solar system
•   Things to watch out for when signing a contract
•   Installation and connection to the grid
•   Maintaining your solar system


39 It can be found here  http://pv-map.apvi.org.au/potential
40 It can be obtained here -  http://www.ata.org.au/ata-research/sunulator.
41  http://www.solaraccreditation.com.au/consumers/purchasing-your-solar-pv-system/solar-pv-guide-for- households.html 

•   What to do if something goes wrong

Guide for Installing Solar PV for Business

This is also produced by the Clean Energy Council and includes the following topics.42

•   Is solar PV the right choice for my business?
•   Grid-connected vs stand-alone systems
•   How much will it cost?
•   The business case for solar PV
•   Building and planning permits
•   Advice for businesses in leased premises
•   Government assistance and financing options
•   Choosing and installing your solar PV system
•   What do if something goes wrong

Home Solar Battery Guide

Although this is produced in NSW it is still a useful guide for anyone considering batteries for their home or business. It has the following chapters.43

1.   Your home solar battery guide - energy system insights; key messages in the guide;
common motivations for buying batteries; how to use this guide.
2.   Understanding your energy use - how to access energy information; making sense of energy tariffs; easy alternatives to batteries; making more use of existing solar.
3.   Your home power station - how a home power station works; battery basics; battery chemistries; environmental benefits and impacts of home solar batteries.
4.   Designing  a  home  power  station -  three  main  options  for  adding  battery  storage;
battery sizing; backup power; future proofing.
5.   Will a battery save me money? - calculating the ‘payback period’ for a battery; typical payback periods in 2017; the bottom line on investing in a battery.
6.   Buying a solar battery - what to expect from a quote; choosing an installer; assess your purchasing options; grid connection.
7.   Owning a battery - manage and operate your battery; monitoring  and maintenance;
safety; consumer rights and protections.
8.   Additional information - frequently asked questions; glossary of battery-related terms;
links to more information; assumptions for our calculations.

42  http://www.solaraccreditation.com.au/consumers/purchasing-your-solar-pv-system/solar-pv-guide-for- businesses.html
43  http://www.resourcesandenergy.nsw.gov.au/energy-consumers/sustainable-energy/home-solar-battery-guide 

5.2.  Proposed Projects for East Gippsland

The  following  proposes  some  specific  projects  that  can  be  used  to  enable  uptake  of renewable energy in the residential and commercial sectors in East Gippsland, as well as large- scale  and  end-of-grid  systems.  For each  of these  types  of projects  this  section  also  outlines opportunities for community ownership (CORE). The proposed projects are summarised in Table III.

Table III Summary of Proposed Projects

    Proposal    Benefit
Residential- scale    Solar Bulk Buy    Reduces prices, maintains revenue for installers, provides trusted source of information, makes decision process easier.
    Solar $avers    Assists with up-front costs of installation, provides trusted source of information, makes decision process easier.
    Landlord/tenant agreements    Helps overcome the split incentive problem where the landlord would pay for the PV system but the tenant benefits.
Commercial- scale    Multi-site Feasibility
Study    Overcomes the ‘lack of time’ barrier, provides trusted source of information, makes decision and installation process easier.
    Solar lease arrangements    Provides certainty for tenants, makes decision and installation process much easier.
Government buildings    Solar for Schools    Overcomes the ‘lack of time’ barrier, provides trusted source of information, makes decision and installation process easier, and provides teaching materials.
Large-scale    Facilitation    Helps introduce landholders to potential developers, fast-track planning and environmental approvals, support with community engagement and grant applications.
    Proactive assistance    Helps overcome ‘lack of time’ barrier, provides trusted source of information, reduces likelihood of time wasted on non-viable projects, makes decision process easier.
End-of-grid    AusNet/CORE/EGW    Integrates and provides benefits to multiple stakeholders, and facilitates community ownership.
Community
Ownership    RePower Shoalhaven’s CORE model    Suitable for size of systems likely to be built, existing successful model that can be replicated, assistance available.
 

5.2.1.     Residential

Household-scale solar PV systems should provide a good investment return – see Table IV. Although the installed cost of PV systems in East Gippsland has historically  been higher than
$1,200/kW, prices at or below are now starting to enter the local market, and as discussed below, the intention of this project is to increase the rate of uptake so that the installed cost can be lower. Indicative  electricity  tariffs  have  been  used  and will of course  vary between  households.  The export tariff of 11.3c/kWh has been by the Victorian Essential Services Commission and applies to systems up to 100 kW. The amount of exported electricity depends on both the size of the PV system and the load profile of the household. The more electricity used during the day, the better the financial return. Although this is only a simple payback time calculation, and so does not take into  account  the  fact  that  the  money  used  to  buy  a  PV  system  could  have  been  invested elsewhere, this is counteracted by the fact that electricity prices are likely to increase over time (note that the recent increase in electricity prices means that retail tariffs have effectively doubled in the past 10 years).

Table IV Likely Financial Outcomes for a 3 kW Household Solar PV System

    
Value

Installed cost    
$3,600

Annual generation    
3,450 kWh

Retail tariff    
25c/kWh

Export tariff    
11.3c/kWh

Amount of export    
30%

Annual income    
$720

Simple Payback Time    
5 years

Simple Rate of Return    
20% pa

Solar bulk buys

ITP recommends that EGSC facilitate a solar PV bulk buy in the Shire. The installed costs of PV systems in East Gippsland are higher than the average for Victoria. The aim of the bulk buy is to offer cheaper systems but lift the rate of installations  so that a smaller margin for installers won’t reduce their income. If this can achieve a degree of momentum even after the bulk buy is finished, will allow prices to stay low. The bulk buy will also educate people so that they are less likely to fall prey to overpriced offers from external installers. 

The main points to note are:

1.   Running a solar bulk buy is not a trivial task. It requires a central organisation that takes full responsibility for running the bulk buy, is skilled in project management and has a high level of knowledge of solar technologies. At the moment it is not clear there is such an organisation in East Gippsland that has the capacity and time to devote to a solar bulk buy. As such, ITP recommends that EGSC contacts organisations such as those listed in Table  I.  The  best  organisation   to  contact  is  likely  to  be  MASH  since  they  have successfully  run  bulk  buys  with  three  Victorian  councils  (Macedon  Ranges,  Mount Alexander and City of Greater Bendigo). ITP has spoken with MASH and they are more than happy to help run a solar bulk buy in East Gippsland using local installers. MASH is mostly run by volunteers but they do take a small commission on installs to cover their costs.

2.   Local installers should be used. As many of the existing local installers should be used as possible. Any installers left out may undermine the bulk buy. A bulk buy should also be seen as an opportunity to up-skill local installers who may not yet quite make the grade. Increased   competition   will   reduce   prices,   which   should   increase   demand,   which, combined with the other recommendations in this report, should create more than enough work for all the local installers. Instilling an ethos of high quality work and the use of high quality  components  will give the scheme  high credibility  and will lead to greater  local confidence in the scheme, which will further build installation rates.

3.   Both a higher end PV system and a cheaper option should be made available. There may be a need for optional microinverters or power optimisers,44  which are more expensive but help a PV system to maintain its output despite shading. Use of good quality components installed  by  trusted  local  installers  with  suitable  warranties  of  performance  is  a  key
element.

4.   Batteries could also be considered, however it is very important that the community is well informed regarding their financial payback. In most situations, at current prices, batteries are unlikely to pay themselves off during their warranty period.

5.   Solar water heaters (SWHs) should also be considered. Some of the solar PV installers in East Gippsland are also SWH installers, and so they could be involved in this offering. Farming the Sun has experience with SWH bulk buys. The use of high quality heat pump systems may be a more flexible and cost effective for the supply of hot water in many

44 Most inverters are what are known as ‘string inverters’, where the electricity from a string of panels is all channelled through a single inverter. If one of the panels in a string is shaded then the output from the entire string is significantly reduced. Microinverters are smaller inverters that are placed on the back of each panel. In this case, if one panel is shaded, only the output from that panel is reduced. Power optimisers are similar in that they are connected to each PV panel and maximise the power output of that panel. 


6.   The community should be consulted on what sort of community benefit they would like, be it a cash donation to certain charities or free solar systems for community organisations.

7.   Maximum  use  should  be  made  of  all  the  local  community  organisations’  networks  to spread the word. This should extend beyond those with an environmental focus (eg. to sporting groups).

The main issues likely to be faced are:

1.   Obtaining  the help of a reliable coordinator  to run the bulk buy – although,  as above, MASH have said they would like to be involved. However, this would have some external costs.

2.   Getting  the local installers  to cooperate  and agree on a limited  number  of technology options. Installers generally prefer to use their own distributors and technologies.

Solar $avers

As  discussed  in  Section  5.1.2,  East  Gippsland  Shire  Council  is  currently  considering engaging in a version of the Solar $avers program being run by Maroondah  City Council and coordinated by the Victorian Greenhouse Alliance. The current proposal for East Gippsland is to install solar on 50 qualifying low-income households, who would receive free advice on the best solar  system  for them.  The households  will pay back  the cost of the systems  through  a low interest loan, with the proviso that they must be at least $100 per year better off. Local promotion would begin in Feb 2018 with installations in May 2018.

Unfortunately,  despite requests from EGSC that local installers be used, it is likely that the work will go to installers from outside East Gippsland. This is because the program is being run centrally and it would have been very difficult for them to coordinate installers in so many different areas. Fortunately, the very nature of this program means that these systems will be installed on households who most likely would not have taken them up otherwise – and so it shouldn’t reduce the sales for local installers.

In fact, this should be seen as a learning opportunity so that a local version of a Solar $avers program can be run at a later date.

Landlord/tenant agreements

Of the three different  approaches  to enable landlords  to install solar PV (or a micro wind turbine  or micro-hydro  plant), ITP recommends  that EGSC  provide  information  on the ‘simple agreement’  approach.  This  does  not  necessarily  involve  a  real  estate  agent,  but  will  require
cooperation between the landlord and the tenant. We have provided a simple spreadsheet that


45  http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Agents-and-installers/Small-scale- systems-eligible-for-certificates/Register-of-solar-water-heaters 

can be downloaded and used for this purpose. We have also provided a simple Memorandum of Understanding that can be adapted depending on the circumstances – see Appendix A. EGSC could also provide information on the private options that are currently available.

Solar access rights

Solar  access  rights  for buildings  are important  not only for solar  PV,  but also for energy efficiency technologies such as SWHs and even for naturally lighting and heating passive solar designed buildings. It is important to ensure that buildings and other structures do not infringe on the solar access provisions of a neighbouring property. The height of buildings, especially those located on a property’s northern boundary, can be a critical factor in ensuring good solar access. Neighbourhood agreements, such as covenants, may be entered into between property owners to protect PV solar access.

In  the  Victorian  Building  Regulations   2006,  S.R.  68/2006,  Part  4  includes  provisions stipulating minimum levels of solar access to adjoining buildings. This is included in regulations
416 (Daylight  to existing  habitable  room  windows),  417 (Solar  access  to existing  north-facing windows), 418 (Overshadowing  of recreational  private open space), 420 (Daylight to habitable room  windows),  and  429  (Fences  and  solar  access  to  existing  north-facing  habitable  room windows).

The East Gippsland Planning Scheme also includes provision for maintaining solar access to windows  (54.04-4  North-facing  windows  objective)  and open  spaces  (54.05-3  Solar  access  to open space objective).

However, because these relate only to windows and living spaces, they don’t necessarily help with maintaining access to solar PV systems and solar water heaters, which are typically on the roof. Overshadowing  could reduce the financial returns from what could be a significant capital investment.

5.2.2.     Commercial-scale

Discussions with businesses in East Gippsland that use large amounts of energy indicated a healthy  appetite  for solar  PV.  Some  businesses  were  already  fairly  well progressed  and had obtained quotes from installers, and some already had solar already installed. Other businesses were interested in solar but didn’t have the time to look into it because it is not part of their core business, and also lack the expertise to really know what the options are and what is best for their particular circumstances.  There was also varying degrees of interest in including some level of community ownership of a solar system through a CORE project.

Commercial-scale  solar  PV  systems  should  also  provide  a good  investment  return  – see Table IV. Businesses generally have a better match between their load profile and PV generation than do households (both higher in the middle of the day), which results in less export to the grid compared to household systems. The businesses ITP consulted with in East Gippsland could be divided  into  those  whose  electricity  tariffs  included  demand  charges,  and  those  that  did  not. Demand charges are applied to the customer’s maximum monthly demand during specified time 

well  reduce  the  demand  charges,  this  is  not  certain  without  some  additional  internal  load management  system and batteries,  and so we have conservatively  assumed it does not. This reduces the financial return but still results in very reasonable payback times.

Table V Likely Financial Outcomes for a 30 kW Commercial Solar PV System

    
Value

Installed cost    
$36,000

Annual generation    
34,500 kWh

Retail tariff    
12c/kWh (with demand charges)    
25c/kWh (no demand charges)

Export tariff    
11.3c/kWh

Amount of export    
5%

Annual income    
$4,130    
$8,390

Simple Payback Time    
8.7 years    
4.3 years

Simple Rate of Return    
11.5% pa    
23% pa


ITP has identified three different types of opportunities for commercial-scale systems.


1. Local industry

All manufacturing sites, including the large food producers in East Gippsland, have significant manufacturing  and  refrigeration  loads  and  so  are  very  high  energy  users.  They  also  have significant amounts of roof space that would be suitable for solar. ITP recommends that a two- stage approach be used to assist these businesses. The aim is to help the businesses to decide whether to install, and, where they proceed, to ensure that they end up with a high quality system at  a  good  price.  The  costs  of  each  of  these  stages  would  be  spread  across  participating businesses. Of course, grant money may be available, but even without grant support, this would be money well spent given the high likelihood that solar would be a good business proposition.

The first stage would be to help these businesses assess the financial viability of solar PV using an approach similar to that taken by EGSC for its own buildings. That is, a consultant who does not have a direct interest in convincing a business to install solar, but that has a very high level of technical knowledge of solar, should be contracted to provide a ‘Multi-Site  Feasibility Study’ that would assess the viability of solar for these businesses en masse. This would result in a series of reports (a separate assessment for each business) that would detail: 

1.   The recommended system size(s)

2.   A detailed estimate of the installed cost

3.   The estimated annual generation and income

4.   The estimated simple payback time

5.   A brief description of any relevant issues such as shading or roofing restrictions (eg. any requirements for structural reinforcement), proposed alterations to operations in order to better align load with PV output, and any metering or switchboard limitations.

Sites  should  also  be  given  the  option  of  a  more  detailed  assessment  including  load monitoring, and/or an energy audit, which could be provided at an additional cost. This would be important for businesses that have a demand charge included in their electricity tariffs because their  per  kWh  rate  could  be  quite  low  and  solar  may  not  reduce  their  demand  charges  (for example if their peaks occur in the early morning or late evening).

The second stage would be to help interested businesses to install an appropriate solar PV system. Either the same consultant from stage 1, or a different consultant, would be contracted to project-manage a call for tenders for installers and an assessment of those tenders, and then to perform quality assurance on the completed installations.

Community Ownership

Businesses that ITP spoke with were open to the idea of community ownership of all or part of the solar system. Options for CORE projects are discussed below in Section 6.3.5.

2. Community organisations

There is a large number of community organisations in East Gippsland that occupy buildings owned by either EGSC or the Department of Environment, Land, Water and Planning (DELWP). They are generally under a licence or lease arrangement, but where multiple organisations may use a particular building, then each may operate under an agreement which includes the cost of electricity.

Where a licence or lease arrangement is used, there is an opportunity for the tenant to own a solar system to reduce their electricity costs. The main issue here is that when the lease expires the tenant may either lose their PV system or be required to remove it (and have nowhere for it to go). However, both EGSC and DELWP understand this issue and said it is quite unusual for a licence or lease to not be renewed. Leases generally go for 21 years, and can be up to 65 years with Ministerial approval. Solar systems generally pay themselves off in 5 to 10 years.

Another issue relates to the requirements placed on tenants regarding significant changes to their site. In ITP’s experience in other jurisdictions, since the installation of solar PV on buildings leased  by  government  is  new,  there  are  no  processes  in  place  to  deal  with  it.  Tenants  are required to go through a very convoluted process, which may be being developed ‘on the run’, and involve multiple sections or departments.  Thus, ITP recommends  that EGSC and DELWP 

This should culminate in a Memorandum of Understanding (MOU), which could be incorporated into the lease agreement if necessary.

A proposed process is outlined below. It is based on a process developed for Byron Shire
Council and so some aspects may not be relevant for EGSC or DELWP.

1.   Identify potential building (either by tenant or EGSC/DELWP)
2.   Assess building/land category:
a.   Operational Land
b.   Leased Building (either Council or Crown owned)
c.   Council owned asset
3.   Consult with relevant asset manager to determine:
a.   Further relevant stakeholders
b.   Tenure status (this will determine who the MOU needs to be with)
c.   Potential renovation plans
d.   Most recent roof condition report
e.   Any known barriers to completing a solar project
4.   Identify if energy efficiency improvements can be made first and suitability of solar for the current use.
5.   Table a draft MOU for the project
6.   Complete a structural engineering assessment of roof supports
7.   Procure and install solar PV systems


Steps 4, 5, 6 and 7 are areas where assistance  could be provided  to tenants. As for the
‘Local industry’ proposal above, this assistance could be provided en masse.

Step 4: The tenant could pay for an energy efficiency audit, an audit could be incorporated into an existing or new community energy group activity, or council could apply for grant funding to do a number of community buildings at the same time.

Step 5: Council and/or DELWP  could develop a template  MOU that would meet the legal requirements of their lease agreements. It need not be complex and so only include things such as  who  owns  the  PV  system,  who  is  responsible  for  operating  and  maintaining  it,  who  is responsible for disposing of it (both when the lease ends and at the end of life of the system). In most, if not all, cases the responsibility for all of these would lie with the tenant. Note that all PV systems come with three warranties: an installation warranty (generally 5 years and covers the installer’s  workmanship),  a product  warranty  (generally  10 years and covers  any faults  in the panels, inverter etc), and a performance warranty (at least 20 years and warrants a certain level of performance over time – generally 80% of original output).

Step 6: Council/DELWP could coordinate a group assessment of their buildings, which they could even pay for themselves as part of their responsibility to their tenants. 

Step 7: This could follow exactly the same two stage process described for the Food Cluster above.

If the tenants operate under an agreement where they don’t pay their own electricity bills, it would be in EGSC/DELWP’s interest to install a solar system themselves since it will reduce their own operating costs. They could also choose to pass on some of these savings to the tenants. They could follow essentially the same process as described above for leased buildings.

One issue that was raised during the consultation process was the need to avoid ‘profiteering off crown’, which is where crown assets are used by groups to generate a profit. However, it was thought that this is unlikely to be an issue as long as the profit is going back into the organisation and not being dispersed to external for-profit organisations or businesses.

Community Ownership

These sorts of solar systems are of course perfect candidates  for community  ownership – that is, ownership not just by the community group, but by individual community members of that group. Options for CORE projects are discussed below in Section 6.3.5.

3. Government buildings

The installation of solar PV systems on government buildings (for example East Gippsland Water (EGW), Bairnsdale Regional Health Service (BRHS) and DELWP) tends to occur through standardised government procurement processes. All these organisations are also currently investigating  solar options. This means there is less opportunity  for EGSC to assist. However, through discussions  with these organisations  two opportunities  were identified. These relate to end-of-grid systems (specifically for EGW, and is discussed in Section 6.3.4) and CORE projects (discussed in Section 6.3.5). There is also an opportunity to help public schools to install solar.

Solar for Schools

Solar systems at public schools do represent an opportunity where EGSC can assist. Public schools in Victoria pay their own electricity bills, and so the installation of solar can significantly reduce their operational costs. Solar Systems can be installed with an online descriptive live data interface that allows school children to understand how and when electricity is being produced. This can be combined with relevant curricula material from kindergarten through high school and serve  as  a  valuable   means   of  increasing   familiarity,   knowledge   and  acceptance   of  the technologies, which can be carried into later life.

The  National  Solar  Schools  Program  (NSSP)  closed  in  2013  but  offered  primary  and secondary schools the opportunity to apply for grants of up to $50,000 to install solar and other renewable  power  systems,  solar  hot  water  systems,  rainwater  tanks  and  a  range  of  energy efficiency measures. It was a very successful program but due to budgetary constraints, about
40% of eligible schools did not receive a grant. 

Sydney.46 It is currently  being run jointly by Waverley,  Randwick  and Woollahra  councils,  and helps schools install solar PV through a free solar assessment,  advice on funding, assistance selecting a quality PV system, teaching materials and promotion of what the school is doing. ITP recommends that EGSC contacts the coordinator of the Solar my School program, and models a similar program for local primary schools. School solar systems are also excellent candidates for CORE  projects  because  they can draw on members  of the school  community.  Such  projects provide ongoing financial benefits to the community owners long after their children have left that school.

5.2.3.     Large-scale

In a regional area such as East Gippsland there is scope for the installation of larger-scale ground-mounted PV systems (ie. measured in terms of 1 MW to 5 MW, or even larger). For such systems, EGSC can take on either (i) a facilitating role, or (ii) a more proactive approach.

The financial outcome for large-scale PV systems is more complex to calculate than for household  and commercial-scale  PV systems (which are generally  less than 100 kW). This is partly because large-scale PV systems come under the Large-scale Renewable Energy Target (LRET), and so instead of receiving certificates that provide a discount on the installed cost, they receive Large-scale Generation Certificates (LGCs) each year for each MWh of electricity they generate. With the LRET no longer increasing  after 2020, the value of LGCs is uncertain and likely to approach zero. The reverse auctions through the VRET are likely to support much larger projects than would be built in East Gippsland, which would also be built in areas of maximum sunshine – and so they are unlikely to support local projects. Still, large-scale PV projects are currently  being  built  elsewhere  in  Australia  and  are  reporting  generation  costs  at  less  than
$80/MWh, making them viable in their own right.

As shown in Figure 8, the construction cost can also vary greatly depending on the distance from, and cost to connect to, the electricity grid. Thus, the financial outcomes for large-scale PV systems must be calculated on a case-by-case basis. However, with the many GW of large-scale solar currently being constructed in Australia, it is certainly financially viable.

Opportunities  for large scale PV have been identified at potential commercial  sites around Bairnsdale where the network is strong, and there may be several more sites that provide these opportunities. The Council can have various roles in facilitating these opportunities, but in the end
it will be the commercial decision of the site owner.

46 More information can be found here -  http://reduceyourfootprint.com.au/projects/solar-my-school/ 

Facilitation

Where  EGSC  wishes  to only  facilitate  the development  of a large-scale  PV  array  by the owner of a site that has already expressed an interest, there are four main factors that need to be taken into consideration:

(i)         the availability of land at a suitable price,

(ii)        the availability of sufficient capital for the project,

(iii)       the ability of the electricity grid to absorb the output of the PV array, and

(iv)       an off-take partner to buy the generated electricity.

EGSC  could  provide  an  ‘Introduction  Service’  and  maintain  a  database  of  landowners interested in participating in solar farm projects. The database would be used to match developer enquiries  with  suitable  landowners,  reducing  the time  taken  to identify  willing  participants.  Of course, council would have to bear the costs of establishing and maintaining the database and fielding enquiries from landowners and developers.

Ideally the project proponent would own enough land to host the PV array, and this land has no other, or limited, commercial value to them. With regards to access to capital, EGSC can also play a valuable role in facilitating community ownership of all or part of large-scale systems. This can be useful where the availability of capital is an issue, or simply where the proponent wishes to benefit from positive community engagement. Community ownership is discussed in more detail in  Section  6.3.5.  For  information  regarding  access  to  the  grid,  the  proponent  can  simply  be directed to contact AusNet. The off-take partner would normally be organised by the project developer, but in some cases (for example Patties) the project proponent would also be the off- take partner.

EGSC can also facilitate large-scale solar projects by:

i)          Fast tracking planning and environmental approvals

As one of the approval authorities for projects such as solar farms, EGSC may be able to simplify and expedite  the approvals  required.  By creating a pro-forma  approval or designating specific  areas  or types  of development,  the development  process  can be sped  up and costs reduced. This could involve the creation of designated solar farm zoning overlays with the specification of screening and site requirements. This would ensure that applications are close to being compliant from the outset. It may need to include prior agreement with the local network service provider and the State Government on the conditions they would also consider necessary.

ii)         Support of Grant Applications

EGSC  can  directly  support  developments  that  are  seeking  financial  support  from  other sources by writing letters of support to the funding body.  The letter of support would express the Council’s support for the solar farm development,  and highlight the benefits and the innovative aspects of the projects. Development of a template letter of support would reduce the time and 


iii)        Council Initiated Development

EGSC could attract investment  by identification  of a suitable  site and negotiating  with the landowner on access arrangements, costs for a solar farm, (ie the $/Ha/year rental rate) and any restrictions required. Council could then facilitate the approvals for a solar farm and then seek a developer to finance, deliver and own the project.  This would reduce the upfront cost and risk for a developer and makes the site attractive, however council would risk the development costs they expend.

Proactive approach

Where EGSC wishes to be more proactive, it can commission  a first-stage assessment  of particular  sites.  EGSC  is  in  fact  currently  considering   doing  this  for  a  major  local  food manufacturer.   This  could  be  similar  to  the  ‘Multi-Site  Feasibility  Study’  proposed  for  the commercial sector above, but for a more limited number of sites, possibly only one. In this case it would  essentially  be a technical/financial  assessment,  but with greater  detail on the metering options and potential grid impacts.

Alternatively, a higher-level multi-criteria analysis could be undertaken for a large number of potential sites. This would be more complicated, and in addition to proving a detailed estimate of the breakdown of the installed costs, could include:

-     Identification  of exclusions (national parks, native vegetation, land use, planning zones, bushfire risks)
-    The ability of the network to accept the solar array and the connection costs
-    Terrain slope and shading
-    Solar resource assessment

If desired,  the outcomes  of this criteria  analysis  are then  combined  into what  is called  a
‘raster’ map, which provides a visual representation of the suitability of different areas for large- scale PV, and an estimate of the associated costs. An example of such a map is shown in Figure
8. Such a report can also extend to further options for the development of these projects – which could also be made available to proponents referred to in the ‘Facilitation’ approach described above. 
Background Technical Study: East Gippsland Bright Futures Renewable Energy Project

Figure 8 Preferred Areas for a 1 MW Solar Farm (note that the costs are very out of date and are currently much lower) 

5.2.4.     End-of-grid

Again,  in rural and regional  areas,  there  may be communities  located  at the end of long sections of the electricity grid who suffer from unreliable supply. In East Gippsland this includes communities  such as Mallacoota,  Bemm  River, Gelantipy,  Cassilis  and Benambra,  as well as others in outlying areas (red lines indicate AusNet high voltage power lines in Figure 9 below). In these  situations  solar  PV  can  help  improve  power  quality  by  providing  voltage  support  and frequency  control.  However,  during  times of blackouts,  solar alone is not sufficient  to provide back-up power. Blackouts can occur when there is a fire or simply because a branch (or even just bark) has fallen across the lines. In this case some form of battery or diesel generator backup is required.

Figure 9. High Voltage Lines in East Gippsland (2012)

Although a privately owned battery is generally not financially viable in this situation, AusNet could own a battery to manage short-term supply interruptions, the community could own/operate a solar PV system, then EGW may be able to provide the land at the local water or wastewater 

treatment facility and purchase the electricity.47  This would be dependent on the location and the availability of suitable land. The financial outcomes for the community-owned  PV system would be the same as for the commercial-scale systems in Section 6.3.2.

AusNet is already considering the use of batteries at end-of-grid locations in East Gippsland. Batteries  can  be  included  in  their  Regulated  Asset  Base,  and  so  fit  within  their  financial accounting obligations. Although, strictly speaking, a solar PV system is not needed for a battery to bridge short-term supply interruptions, it can help extend the life of the battery, and can also help EGW meet their emission reduction obligations if they purchase the PV electricity.48

In order to count towards meeting  EGW’s emission  reduction  obligation  it is likely the PV system would need to be less than 100 kW (ie. if it is greater than this size it would come under the Large-Scale Renewable Energy Target, and so would be used to meet that legislated target). This is also a size suitable for a small community CORE project, and should readily fit on the land available at a wastewater or water treatment facility. It could be ground-mounted  or behind-the- meter  (either  on  a  building  or  floating  on  a  raw  water  storage  pond)  –  which  may  provide additional benefits such as reduced evaporation and the potential for storages to be operated at a higher level due to reduced risk of erosion due to wave action.

Note  that  systems  that  can  operate  as  stand  alone  generators  and  can  also  be  grid connected (e.g. can inject power back into the grid) need additional safety and protection systems to ensure the safety of distribution system workers by ensuring that power cannot be exported to the grid where there is currently no mains voltage or frequency during a grid outage.

5.2.5.     Community Ownership

For all the above project types (apart from the large-scale ground-mounted  PV arrays), ITP recommends that RePower Shoalhaven’s CORE model be used. Alternatively, the Farming the Sun approach  may be suitable.  Each involves  a proprietary  company  limited by shares being established for each solar system (or group of solar systems). The main difference between the two is that under the Farming the Sun model the private company doesn’t own the PV system but just loans the money to the host site.

In the first instance, RePower Shoalhaven (or Farming the Sun) should be contacted to see if they  are  happy  to  provide  assistance,  and  what  sort  of  assistance  they  would  be  happy  to provide. The best option is likely to be that one of these groups coordinate the establishment of the first ‘CORE company’ with on-the-ground assistance from East Gippsland community groups. Once a local community group has developed more internal capacity, it could then set up the next CORE company, and so on.

The  same  general  approach  would  be  used  for  all the  CORE  opportunities  discussed  in
Sections 6.3.2 to 6.3.4 above. Once a specific project has been identified and a financial analysis

47 Of course, the PV electricity could also be purchased locally by any other entity, but this would then most likely have to be exported to the grid, and so the owners of the PV system would receive less for the electricity.
48 The Victorian government has set targets for emission reductions of 25% by 2025 and 100% by 2050. This has been translated into a 21% reduction by 2025 for EGW. 

completed  (ie.  installed  cost,  expected  annual  income,  return  on  investment),  it  would  be advertised as a CORE project to people who are likely to want to invest. Businesses, community organisations and public schools can use their own networks to make the project known to the public. The end-of-grid projects would use the local community networks, and if more investors are required, could extend their invitation more broadly.

The  large-scale  ground-mounted   systems  are  different  to  the  above  types  of  projects because:

i)          They cost more and so would need more investors.

ii)     They would not necessarily have their own networks, although they are likely to have enough employees to buy shares.

One way to overcome the need for more investors is to have a cornerstone investor establish the project, then have only a proportion of the total project sold off to community investors. The cornerstone investor could be either the host site or a third party investor.

Another option is to use either an unlisted  public company  limited by shares (as used by Sydney  Renewable  Power Company)  or a cooperative  structure  (as used by Hepburn  Wind). However, these are complex entities with significant accounting and reporting obligations, and so should  only be undertaken  by people  with  sufficient  experience  in establishing  and operating them, as well as the time to do so. 

6. Modelling Technology Options

Following  on from  the community  consultation,  three  scenarios  were  developed  for 2025. They were based on the community’s general interest in renewable energy, as well as the interest in particular types of projects designed to drive uptake (as discussed in Section 5.2). Note that scenarios are not predictions: they are simply used to illustrate the impact of different levels of electricity demand and electricity generation options.

Scenario  1 represents a fairly modest uptake of additional renewable energy options. Both solar water heaters/heat pumps and solar PV increase only moderately compared to the current levels. Solar water heaters/heat pumps increase from being on 32.7% of houses to being on 35%. Household  PV increases  from 14.5 MW to 21.4 MW (which includes the 13% increase in the number of households), while commercial PV increases from 1.5 MW to 2.5 MW. It assumes no additional large-scale PV, bioenergy, wind or hydro. It also includes no reduction in electricity use because of energy efficiency.

Scenario  2 represents a realistic but ambitious level of uptake of renewable energy. Total residential and commercial PV increase to 36.7 MW and 6.4 MW respectively.  There are also increases in large-scale PV (5 MW), bioenergy (1 MW) and wind (0.2 MW), and the combined effect  of  increased  SWH/heat  pumps  and  energy  efficiency  almost  cancel  out  the  increased electricity use driven by population growth.

Scenario 3 is essentially an unrealistic target for 2025, but is used to illustrate the impacts of much higher uptake of renewable energy that could occur at a later date.


6.1.  Modelling 2025 Electricity Use

The modelling  was performed  for the year 2025 using NEMO  (National  Electricity  Market Optimiser),  an  open  source  electricity  sector  model  (https://nemo.ozlabs.org).  It  was  used  to model the hour-by-hour dispatch of a range of electricity generation technologies according to the scenarios  described  below. Only technologies  that are commercially  available  in Australia  are used.

This firstly involved projecting electricity use from 2016 allowing for population growth, uptake of SWHs, and the uptake of energy efficiency  options in general. Different levels of uptake of distributed  smaller-scale  PV, large-scale  PV, wind, bioenergy  and GreenPower  purchase were then  programmed  into  the  model  according  to  the  following  scenarios.  It  was  assumed  that electricity could be drawn from the National Electricity Market (NEM) when required (most likely overnight), then exported to the NEM when in excess (most likely during the day). 

6.1.1.     Population Growth

The Victorian Department  of Environment,  Land, Water and Planning produces ‘Victoria in Future’ reports on population and household Projections to 2051. The 2016 version expects the East Gippsland Shire population to grow from the current level of around 45,000 to around 49,000 by 2025.  The  number  of households  is projected  to increase  from  the current  level of about
24,450 to about 27,650 by 2025 (i.e. by 13%), which increases electricity use. We assume that an equal  proportion  are suitable  for PV  and SWHs  as are currently  suitable,  resulting  in 24,050 suitable dwellings.

6.1.2.     Smaller-scale Technology Uptake

The  following  discusses  the  various  options  that  can  affect  electricity  use.  They  can  be divided into those that (i) decrease electricity use (energy efficiency, including solar water heaters and air-sourced  heat pumps,  behaviour  change),  (ii) generate  renewable  electricity  (PV,  wind turbines, bioenergy), and (iii) GreenPower.

Decreasing Electricity Use

Decreasing electricity use through energy efficiency measures (also known as negawatts) is generally by far the cheapest way to reduce the amount of electricity drawn from the grid, and therefore greenhouse  gas emissions. Load management  is similar, but includes simply shifting loads from one time to another, without necessarily decreasing electricity use (some load shifting measures may in fact increase energy consumption).

They can provide value by (i) reducing the annual need for electricity, which makes meeting renewable energy targets easier, (ii) reducing demand at peak times, which reduces the amount of  local  renewable  energy  and  network  capacity  needed  at  any  one  time,  and  (iii)  reducing demand at times of low local renewable energy generation, which would reduce the amount of electricity that needs to be imported into East Gippsland Shire (for example, where large amounts of solar PV is used to meet electricity demand, overnight loads, such as off peak water heaters, should be moved to day time boosting).

Solar water heaters and air-sourced heat pumps

There are currently over 1 million solar water heaters (SWHs) or air-sourced heat pumps in Australia,  with  over  250,000  of  these  in  Victoria.49  Information  is  available  on  the  number  of SWHs  and  air-sourced  heat  pumps  by  postcode  from  the  Clean  Energy  Regulator.  East Gippsland  Shire  includes  the postcodes  shown  in Table VI. Of these, postcodes  3701, 3862,
3864 and 3898 include a proportion outside East Gippsland. The Australian Bureau of Statistics provides Australian  Statistical  Geographic  Standard  Correspondences  that are a mathematical
method used to assign data from one geographic  region to another.50  We have used these to


49 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Postcode-data-for-small-scale- installations#Solar-Water-Heater-and-Air-Source-Heat-Pump-Deemed
50 These can be obtained from http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/1270.0.55.006July%202011?OpenDocument 

assign the SWH uptake from these postcodes to East Gippsland Shire. Thus, about 20.8% of suitable dwellings  have SWHs, and about 11.9% of dwellings  use air-sourced  heat pumps for heating water.

Table VI Estimated Uptake of SWHs and Air-sourced Heat Pumps in East Gippsland Shire (Oct 2017)

Postcode    SWH    Heat pumps
3701    0    0
3862    0    0
3864    11    12
3865    35    20
3875    1,417    387
3878    112    35
3880    372    118
3882    95    53
3885    148    84
3886    18    35
3887    15    23
3888    170    294
3889    11    19
3890    13    13
3891    9    0
3892    144    45
3893    0    1
3895    3    3
3896    15    10
3898    12    11
3900    7    2
3902    38    22
3903    68    42
3904    138    102
3909    613    662
TOTAL    3,464    1,993
 

The amount by which SWHs reduce electricity use can vary greatly (eg. from 20% to 90%)51 depending on the orientation of the system, the amount of shading, the efficiency of the system, the design of the system (eg. flat plate or evacuated tube), the climate, the hot water demand, the boosting type and the time of day that hot water is used. Some of these issues do not affect heat pumps, for example, they are unaffected by orientation or shading and their efficiency is generally unaffected by hot water demand. SWHs and air-sourced heat pumps are often assumed to, on average, reduce the electricity used for the average hot water system by 70%.52 For the modelling conducted here, we have assumed that the average SWH or heat pump reduce electricity use by
4.9 kWh/day on average through the year. We apply this reduction between 11pm and 7am.53
The SWHs and heat pumps currently installed in East Gippsland Shire avoid the use of about
9,750 MWh of electricity  per year (meaning  that, without them, electricity  use would be about
3.7% higher).

SWHs and heat pumps offset the use of off-peak electricity, which costs less than standard electricity, which means they have a longer payback time than PV systems. We don’t distinguish between SWHs and heat pumps because we have no data on the likely future split in uptake and it is likely they will have similar impacts on electricity use. Table VII shows the estimated uptake of residential SWHs and heat pumps taking into consideration the projected population growth.

Table VII Uptake of SWHs and Air-sourced Heat Pumps in East Gippsland (2025)

    % of
Dwellings    SWH & Heat pumps    GWh decrease a    % decrease cf baseline b
        Additional    Total        
Scenario 1    35%    3,100    8,560    5.55    2.0%
Scenario 2    45%    5,550    11,000    9.90    3.6%
Scenario 3    55%    8,000    13,450    14.30    5.2%
                    
a: Decrease due to additional units
b: Decrease as a percentage of East Gippsland Shire’s 2016 electricity use

Other energy efficiency options

There is a wide variety of energy efficiency options available for households as well as businesses.  Behaviour change (such as turning off lights, wearing warmer (or cooler) clothing, turning  down  thermostats   etc)  is  also  a  very  significant   contributor   to  energy  efficiency


51 Gill, N., Osman, P., Head, L., Voyer, M., Harada, T., Waitt, G. and Gibson, C., 2015, ‘Looking beyond installation: Why households struggle to make the most of solar hot water systems, Energy Policy, 87, p83-94.
52 http://www.energyrating.gov.au/products/water-heaters/solar-water-heaters
53 SWHs and heat pumps would be much more effective in reducing electricity use during summer than in winter, and not all electric water heaters operate only between 11pm and 7am, however given the other estimates used here (such as uptake of these technologies), these assumptions are reasonable. 


outcomes.54  The  uptake  of  these  options  has  been  modelled  as  a  general  reduction  in  load between 7am and 11pm.

In  order  to  create  each  Scenario  we  assume  that  these  other  energy  efficiency  options reduce East Gippsland Shire’s electricity use in 2025 by the amounts shown in Table VIII. Then, when combined with the impact of population growth (13%) and residential SWHs/heat pumps, the final outcome are changes of +10.4%  to -7.9% with respect to 2016 levels. Note that the Subtotal isn’t the simple addition of the values above it because SWHs/heat pumps are assumed to  decrease  electricity  use  only  between  11pm  and  7am,  and  general  energy  efficiency  is assumed to decrease electricity use only between 7am and 11pm.

Table VIII Combined Impact of Population Growth, SWHs/heat pumps and General Energy Efficiency - Compared to 2016 Underlying Electricity Use (with existing PV added back in)

    Scenario 1    Scenario 2    Scenario 3
Population growth    13%    13%    13%
SWHs/heat pumps    -2.0%    -3.6%    -5.2%
General energy efficiency    0%    -10%    -20%
Subtotal    10.4%    1.4%    -7.9%

Renewable electricity

Distributed Solar PV

As discussed  above, there are currently  about 16,041  kW PV installed  in East Gippsland Shire: consisting of 4,573 systems (14,489 kW) that are less than 10 kW in size, and 79 (1,551 kW) in the 10 kW to 100 kW size range. About 27% of suitable  dwellings  have PV, and the average  residential  system  size  is  about  3.2  kW.  As  of  2017  there  were  just  over  4,280 businesses in East Gippsland Shire. Assuming the 79 systems in the 10 kW to 100 kW size range are on businesses and other larger organisations such as government buildings and schools, only about 1.8% of businesses currently have PV, and the average system size is about 20 kW.

The assumptions and outcomes for each Scenario are shown in Table IX. In reality there will of course be a range in system sizes, with some installations being much less or greater than the
assumed average.


54 Strictly speaking, behaviour change is an energy conservation measure, not an energy efficiency measure. 

Table IX Uptake of Distributed Solar PV in the East Gippsland Shire (2025)

    Uptake    Solar PV    GWh generation a    % cf baseline b
        Additional    Total        
Scenario 1
Residential Commercial Total    

25% - 3.5 kW
3% - 20 kW    

6.9 MW
1 MW
7.9 MW    

21.4 MW
2.5 MW
23.9 MW    

24.6
2.9
27.5    

8.1%
1.0%
9.1%
Scenario 2
Residential Commercial Total    

30% - 5 kW
7.5% - 20 kW    

22.2 MW
4.9 MW
27.1 MW    

36.7 MW
6.4 MW
43.1 MW    

42.3
7.5
49.7    

15.2%
2.7%
17.9%
Scenario 3
Residential Commercial Total    

40% - 5 kW
15% - 20 kW    

34.4 MW
11.3 MW
45.7 MW    

48.9 MW
12.8 MW
61.7 MW    

56.3
14.7
71.0    

22.3%
5.8%
28.1%
                    
a: Generation due to total PV systems
b: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Large-scale PV

The amounts of large-scale ground-mounted  PV, and the amounts of electricity generated, are shown in Table X. Businesses interviewed for this project expressed an interest in up to 3 MW of large-scale PV, so it is likely the actual amount installed will be between scenarios 1 and 2.

Table X Amount of Large-scale PV and Electricity Generated, East Gippsland Shire (2025)

    Large-scale
PV (MW)    Electricity Generated (GWh)
Scenario 1    0    0
Scenario 2    5 MW    6.0
Scenario 3    10 MW    12

Bioenergy

East Gippsland Water currently operates a small bioenergy facility that uses waste methane. Their electricity generation was estimated by dispatching the full capacity of the biomass plant in each hour of the year. The assumptions and outcomes for each Scenario are shown in Table XI. 

Table XI Uptake of Bioenergy in the East Gippsland Shire (2025)

    Capacity    MWh generation    % cf baseline a
            
Scenario 1    0.04 MW    350 MWh    0.1%
Scenario 2    1 MW    8,770 MWh    3.2%
Scenario 3    5 MW    43,850
MWh    17.4%
            
a: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Small-scale Wind turbines

We assumed there would be no large-scale (MW size) wind turbines, only some small-scale wind turbines. Figure 10 shows the Wind Map from the Victorian  Wind Atlas produced by the Sustainable  Energy Authority Victoria. The brown areas are the best places for wind turbines: which  explains  the tendency  for wind farms  to be along  the southern  coast of Australia.  The Hepburn Wind Farm is located in the brown area north east of Ballarat. Although there are some brown areas in East Gippsland, they are too far from transmission lines large enough to connect to. The yellow areas in East Gippsland could have average wind speeds around 7m/s, but these are concentrated near the coast, where large-scale wind turbines are unlikely to be visually acceptable.
 

The electricity generation of small-scale wind turbines was calculated by scaling wind power data from the ‘AEMO 100% Renewables Study’.55 The contribution from wind in these scenarios is very low and so the accuracy of the wind data is not critical. The assumptions and outcomes for each Scenario are shown in Table XII.

Table XII Uptake of Wind Turbines in the East Gippsland Shire (2025)

Capacity    MWh generation    % cf baseline a

Scenario 1 0 0 0 Scenario 2 0.2 MW 606 MWh 0.2% Scenario 3 0.5 MW 1,514 MWh 0.6%

a: Generation as a percentage of East Gippsland Shire’s 2016 electricity use

Run-of-river Hydro

There is likely to be a small amount of run-of-river hydro operated privately in East Gippsland Shire – some of which may not be grid-connected. This is already reflected in the underlying electricity use through the ZSs discussed above. To the best of our knowledge there are no plans for significant uptake of run-of-river hydro in the Shire and so we have not included any in our modelling.

GreenPower

GreenPower is accredited and independently audited electricity that is certified to come from renewable energy generation. It is additional to any mandated renewable energy targets, and so is bought by electricity customers so they can make their own contribution to increasing the amount of renewable electricity and so reducing greenhouse gas emissions. It generally costs about an extra 5c/kWh, and so for a household using say 11kWh/day (~4 MWh/year), would add about $50 to their quarterly electricity bill. Currently only about 0.5% of Australia-wide electricity sales are through GreenPower. The assumed purchases of GreenPower for each Scenario are shown in Table IX.

55 More information available here - https://www.environment.gov.au/climate-change/publications/aemo-modelling- outcomes

Table XIII Assumed Purchase of GreenPower in the East Gippsland Shire (2025)

GreenPower as a % of

Total Use Scenario 1 0.5% Scenario 2 1% Scenario 3 2%

6.1.3. Final Renewable Energy Mix

Table XIV shows the final capacity of each type of generator in 2025.

Table XIV Capacity of each type of generator in 2025

Scenario 1 (MW)    Scenario 2 (MW)    Scenario 3 (MW)

Existing PV 16.04 16.04 16.04 New residential PV 6.9 22.2 34.4 New commercial PV 1.0 4.9 11.3 New ground-mount PV 0.0 5.0 10.0 Bioenergy 0.04 1.0 5.0 Small-scale Wind 0.0 0.2 0.5

The following charts (Figure 11 to Figure 16) show the electricity generation from the mix of renewable energy technologies in each Scenario in East Gippsland Shire in 2025. For each Scenario, a summer peak week and a winter peak week are shown. Each of the colours represents a different technology (or category of technology such as residential or commercial PV). The two 47 MW gas turbines at Bairnsdale Power station are also shown. The slightly thicker black line shows the level of demand, and where generated electricity is exported, a paler version of the technology’s colour is used. The brown areas represent electricity imported from the Victorian grid. These charts are discussed below.

Firstly looking at the underlying load profile (the thicker black line), the times of the off-peak water heating are very obvious – being the regular high load spikes. We have been told that Bairnsdale Power Station is often switched on only to cope with the increased demand driven by off-peak water heating56 – and this is supported by the correlation between these peaks and the operation of Bairnsdale Power Station’s Unit 1 (BDL1).57

We have incorporated the operation of Bairnsdale Power Station’s two Units (BDL1 & BDL2) using actual half hourly data from 2016. BDL is operated to both bid into the electricity market and to provide network support. It is likely that the latter operation would be affected by the higher levels of penetration  of renewable energy, particularly in scenarios 2 and 3, and so the actual operation could be different to that shown here.

In  Scenario  3,  which  has  the  highest  uptake  of  renewable  technologies  and  the  lowest electricity demand, it can be seen that in summer there is a significant amount of excess solar PV electricity that flows back up through the ZSs. This is partly because the PV generation is higher in summer, but also because the load is lower. However,  this scenario assumes  a very large amount  of PV (a total of 71 MW, compared  to 16 MW currently),  and it is likely that a more realistic level of PV uptake would be somewhere between scenarios 1 and 2.

We have modelled  the impact  of one third of the households  with PV in scenario  2 also installing  batteries  with  a  10kWh  capacity  (8kWh  useable)58.  These  are  used  to  capture  PV electricity that is in excess of the household’s needs, which is then used to meet their evening load. This is shown in Figure 17 and Figure 18, which show a peak summer and winter week respectively, where the electricity generation by the PV+batteries is shown in pink. The strange
shape,  with  the spike  in the middle,  is caused  by the batteries  being  full and so excess  PV electricity is exported. This effect is much less pronounced in the winter chart, mainly because of lower PV output but also because  of higher load. Although  larger batteries  would reduce this effect, we have used 10kWh batteries because this is a common size for a residential system. The use of batteries in this way reduces the reverse power flow of PV electricity. Of course, load shifting through demand management, such as moving off peak water heating to the middle of the
day, would also be very effective.


56 Interview with Paul Guest, who used to run Bairnsdale Power Station.
57 BDL = Bairnsdale Power Limited
58 Assumes 80% useable capacity.
 

7. Recommendations

Increasing the uptake of renewable energy in East Gippsland Shire in a way that maximises local benefits is certainly not a trivial task. A key aim is to create an environment  where local people and businesses wish to invest in renewable energy, energy efficiency and enabling technologies. EGSC has a key role to play, primarily as a facilitator, but also by leading the way through installing solar PV on their own buildings – which they are currently in the process of doing.

Based on the availability of renewable energy resources, the vast majority of renewable generation  will  be  from  solar  PV,  which  can  be  located  throughout  the  distribution  network. Energy efficiency and demand side management  are very important because they can reduce electricity use, reduce demand at peak times, and reduce demand at times of low local renewable energy generation. Vice versa, they can shift demand to times of solar PV generation, maximising the use of local renewable resources.

The direct employment59  in PV installation businesses can be measured in job years/MW PV
installed. In Australia we estimate this to be about 20 jobyears/MW, which means that to install 1
MW PV would employ 20 people for 1 year.60 In East Gippsland this could be achieved through the installation of two hundred 5kW systems (for example through a solar bulk buy) or ten 100 kW systems (for example facilitated through the Multi-site Feasibility Study approach). It could also occur through a single large-scale ground-mounted  PV system, in which case the employment would most likely be slightly less.

In addition, every 1 MW of solar PV installed in East Gippsland would generate about 1.15
GWh  of  renewable  electricity  each  year,  which  would  avoid  the  release  of  about  1,150 tonnes/year of greenhouse gases (this would have been over 1,400 tonnes/year when Hazelwood was operating). Further, this would avoid about $85,000 leaving East Gippsland each year when people pay their bills – for electricity to be generated outside the area.

By  its  very  nature,  renewable  energy  lends  itself  to  smaller-scale  projects  that  can  be distributed  throughout,  and owned by, the community.  This means it is important  that there is community  buy-in  to  the  process  –  which  EGSC  has  already  committed  to.  There  are  also significant benefits for business to invest in renewable energy, particularly in larger premises that have high energy costs, and opportunities for business to support community-owned projects.

The following lists the major recommendations from this report. They are not listed in order of importance, but in the order in which they appear in this report. The prioritisation exercise used to
rank these recommendations is described in a separate Prioritisation Report.

59 Direct employment refers to those working directly for PV companies supplying, selling, installing or maintaining PV systems.  There is also indirect employment, including legal and financial support services, general transport, government regulators, etc.
60 Based on IRENA, 2016, ‘Renewable Energy and Jobs, Annual Review 2016’, International Renewable Energy
Agency. 

7.1.1.     Energy Info Hubs

EGSC  could  consider  further  developing  their ‘Energy  Use and Savings’  website  into a more comprehensive  Online  Energy  Info  Hub  that  pulls  together,  screens,  and  provides  access  to reliable information and tools that are most relevant to East Gippsland Shire. It could also ink to online  tools such as the Solar  Potential  Tool and the Sunulator.  Ideally,  a shop front drop-in centre could be established.  Energy  assessors  could be established  to conduct  home energy audits,  and  they  could  even  operate  from  the  drop-in  centre.  These  and  other  ideas  for community engagement are discussed in Section 6.1.1 and 6.1.2.

7.1.2.     Solar bulk buy

EGSC could coordinate  a solar bulk buy according to the process outlined in Section 6.3.1. It should  be run in close  consultation  with  an organisation  such  as MASH,  use local installers, provide a community benefit, and could include batteries and SWHs.

7.1.3.     Solar $avers

EGSC could pursue its current proposal to participate in the state-wide Solar $avers program. Although  they  have  been  unable  to  include  local  installers  in the  current  program,  it can  be duplicated with local installers at a later date.

7.1.4.     Landlord/tenant agreements

EGSC could provide information on the different approaches whereby landlords can install solar and receive payment from their tenants so that both benefit.

7.1.5.     Local industry

EGSC  could  coordinate  a two-stage  process  to assist businesses  obtain  solar – see Section
6.3.2. The first stage would involve a Multi-site Feasibility Study, which is a high level assessment of the viability of solar. The second stage would involve a call for tenders for installers and an assessment of those tenders, then quality assurance of the completed installations.

7.1.6.     Community organisations

EGSC  and  DELWP  could  develop  a  publicly  available  transparent  process  that  tenants  are required to go through if they wish to install solar PV - see Section 6.3.2. This should include some form of assurance that the lease term would be long enough to pay off the solar system. The subsequent process to assess then install solar would be the same as for the Commercial Businesses above. 

EGSC could contact the coordinator of the ‘Solar my School’ program that is being run jointly by Waverly,  Randwick  and  Woollahra  councils,  and  models  a  similar  program  for  local  primary schools.

7.1.8.     Large-scale solar

EGSC could facilitate the development of large-scale solar projects as described in Section 6.3.3. This Section also described how EGSC could be more proactive through a first-stage assessment of options  (as for the commercial  sector),  resulting  in a ‘raster  map’, which provides  a visual representation  of  the  suitability  of  different  areas  for  large-scale  PV,  and  an  estimate  of  the associated costs.

7.1.9.     End-of-Grid

EGSC could facilitate the different stakeholders that may be interested in developing end-of-grid solar systems. In the example provided in Section 6.3.4, AusNet could own a battery to manage short-term supply interruptions, the community could own/operate a solar PV system, then East Gippsland Water could both provide the land at the local water treatment facility and purchase the electricity.

7.1.10.   Community-Owned Renewable Energy

EGSC could facilitate the development of community-owned renewable energy projects in all the above proposals, as detailed in Section 6.3.5. For all but the large-scale solar projects, this would most likely use the RePower Shoalhaven model, and ideally be with their direct assistance. For large-scale solar, either a cornerstone investor or an unlisted public company limited by shares or a cooperative structure could be used.