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Energy Insights

Microgrids to Play a Growing Role in Energy Supply Mix

The rapid growth of business solar and increasing frequency of climate change-related natural disasters threaten the security and reliability of Australia’s energy grid. Fortunately, microgrids can address both issues, as well as lower costs for electricity consumers.

These local energy grids, each connected to the national grid at a single point, enable the cost-effective energy generated by solar panels and stored in batteries, to be shared within communities. Because microgrids can also be disconnected from the grid and operate autonomously, they have the potential to reduce the risk of power outages.

Favourable economics

However, it is the economic incentive of maximising solar generation and storage that is really driving our clients’ adoption of microgrids. We are seeing increasing use of microgrids within retail precincts, where center landlords are prepared to invest because of the added return on their asset. We also see opportunities for airports and industrial parks.

There is a clear trend though of increasing regulatory oversight to ensure consumer protection for tenants, as well as re-regulation of pricing in Australia. Both have the potential to impact on the business case for microgrids.

Power when it's needed most

Microgrids are invaluable when natural disasters like bushfires and storms cause power outages that can last weeks or even months. After the 2019/20 summer’s devastating bushfires, the Resilient Energy Collective rapidly deployed batteries and solar into microgrids to power homes, businesses and essential infrastructure.

The project is a collaboration between Atlassian co-founder Mike Cannon-Brookes and wife Annie, Australian solar deployment company 5B, and Tesla. The collective’s other objective is to help energy providers to roll out microgrids in regional areas where electricity costs are high and often reliant on diesel-fuelled generators.

Government on board too

Using microgrids to supply regional and Indigenous communities with more secure, affordable and reliable energy is also on the Federal Government’s agenda. In June 2020, it announced it was backing 17 microgrid projects with $19 million in grant funding under Round One of the Regional and Remote Communities Reliability Fund.

The fund, first announced in the 2019/20 Federal Budget, was extended and expanded from $50.4 million to $67.1 million in the 2020/21 Federal Budget. The government noted that microgrids also help the entire grid by savings hundreds of millions of dollars in network costs.

The future is bright

Australia’s energy mix has altered dramatically in recent years, perhaps more than some people had anticipated. Huge investment in commercial renewable energy generation and rapid household adoption of rooftop solar, combined with improved and cheaper battery technology, are challenging the traditional grid.

Microgrids could be a core component of Australia’s energy future by integrating renewable energy into the grid and reducing the risk of prolonged power outages as extreme weather events become increasingly frequent.

To speak with Energy Action about the benefits of implementing or managing a microgrid or embedded network, or support in navigating the often complex regulatory environment, please contact us on 1300 964 589.

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