Microgrids are going to become increasingly cost effective in the next few years in Australia – indeed in some cases they are already – enabling regional towns and new housing developments to unplug from the grid, according to a new study from the clean energy social enterprise Energy for the People and the Alternative Technology Association

Specifically among the study’s findings are that stand-alone microgrids for greenfield housing developments, delivered by a specialist energy service provider, are highly likely to be viable by 2020, where natural gas is available, and may be viable where wood fuel displaces natural gas. They are also likely to be viable by 2020 in regional areas with natural gas.

In the case of stand-alone power solutions for individual homes in regional areas, with high winter and summer thermal loads these are likely to be viable before 2020 where communities can self-organize and realize cost reductions on stand-alone power infrastructure. However, they are constrained by the size of PV systems required (8.2 kW is needed which will be difficult for many household roofs to accommodate). Where wood is used to displace natural gas as part of an appliance replacement cycle (for example, old gas heaters and cook-tops need replacing), stand-alone power solutions may also be viable by 2020. Where bottle gas is displaced by wood, the viability improves substantially.

However, stand-alone power solutions for individual homes in greenfield developments are unlikely to be viable before 2020 without a significant step-change in stand-alone power infrastructure costs, or customers choosing to reduce the size of their home to save on construction costs and offset the stand-alone power infrastructure costs. For example, reducing the size of a home by 9 m2 (3.5% of the average new Victorian home) would be sufficient to make stand-alone power infrastructure viable by 2020.

“Our research shows that if we plan well, there is a huge opportunity for energy customers to save energy and money and at the same time make our energy grid more reliable,” said Tosh Szatow, director of Energy for the People. “It also means that communities can be involved in buying back their local energy grid and investing directly in local energy generation and storage.”

The study was based on analysis of housing at three locations – Werribee, a suburb of Melbourne, Bendigo, a regional city approximately 150 km northwest of Melbourne, and an inner-Melbourne suburb. With Victoria’s relatively harsh climate and poor solar resource, and low energy costs compared to other state’s across Australia, these locations represent close to a “worst case” scenario for the viability of off-grid energy supply in Australia, the report states.

A key assumption in the analyses is that the primary driver of cost reductions in stand-alone power systems will be changes to battery storage prices, while the system price reduction of solar panels will slow down and plateau.

View the report HERE.

By Jonathan Spencer Jones