Opportunity: The Remote Area Energy Supplies service 2,400 customers in 13 remote towns with some of the most expensive energy in the state – diesel generated electricity (and some renewables). Somewhere between $5-$10 million flow each year to create and sell this electricity (my guess).
These remote towns could be world leading models for an energy transition. 1.3 billion people in the world still lack access to electricity and as we transform our supplies, these communities are likely to leapfrog centralised power generation and massive infrastructure investments. It is an economic opportunity for us if we can be at the forefront of appropriate technology for low skilled communities with little access to parts for repair. Appropriate also means the marriage of energy efficiency, demand management and renewables because affordability is the key to successful solutions.
If we can do a 100% renewable micro-grids in remote South Australia and grapple successfully with the climate, maintenance and community issues then we can do it anywhere.There is plenty of learning, skills and innovation that come with successful implementation – skills and innovation that we could then sell to other regions.
Policy proposal for turning all remote towns into renewable micro-grids:
The tender documents to appoint the new manager of remote area energy supplies have been out for the last couple of months so this process is well underway. Someone with a clear mandate to drive innovation and an energy transition in remote areas should be appointed to jump into that process now and see how far the bar can be raised – this time and in every subsequent contract review. This process needs a long term vision!
Any contracts the Government signs should include energy transition and innovation outcomes. After all the Government is subsidising the electricity in these communities, paying up to 50% of the cost to bring it down from outrageous diesel prices to closer to Adelaide prices.
What will it cost?
Diesel is cheap to build and expensive to run. Solar costs more than a diesel genset but the energy is free. Storage technologies are also expensive but falling in price. Energy efficiency investments are cost effective. Solar is increasingly part of the energy mix in our remote communities and the financial models to overcome the stiff up front cost can be part of the innovation that is required. The cost of this proposal could be framed to be cost-neutral over 10 years compared to what it is costing at the moment and savings could flow to Government after that time. I would advocate that the $75 million (roughly) that flows to remote community energy over the 10 years should be put on the table to make this happen and at least 20% of it should be dedicated to investments that stretch our learning edge and allow us to innovate.
What benefits will it generate?
In 10 years time, Government’s per capita energy investment in remote communities should be able to fall significantly. After all, solar energy with lots of energy efficiency is much cheaper than diesel energy with none.
If $1.5 million per year could flow to local energy businesses and skills in remote areas, we could expect a dividend in terms of a thriving renewables/micro-grid export capability in 10 years – (albeit a small one and we would have competitors from WA and many island nations who are doing the same thing)
The communities themselves would benefit as their energy costs fall and some local jobs are generated.
Your Turn: What do you think of this idea? If you like it or you want to build on it please help it circulate:
- submit your thoughts to the consultation (by 18th October)
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