Local energy precincts can help deliver a faster, fairer and cheaper energy transition
CEO Marc England said the NSW Distribution System Plan Opportunities Report identifies a compelling case for local energy precincts, which are complementary to the NSW Government’s renewable energy zones (REZs).
“Distribution networks like Ausgrid are ideally placed to connect more people to renewable energy using existing infrastructure – to deliver a faster, fairer and cheaper energy transition,” Mr England said.
“We’re partnering with the NSW Government to deliver the Hunter Central Coast REZ, and we’re excited by the benefits it will deliver to the local community.
“At the same time, the Ausgrid Community Power Network (CPN) pilot, approved under the Australian Energy Regulator’s sandbox mechanism, will provide a real-world example of how a local energy precinct could operate in practice.
“Set to be delivered in Mascot–Botany and Charmhaven, the Community Power Network is about making better use of our existing network infrastructure so more households can share in the benefits of the energy transition,” Mr England said.
“Using higher feed-in tariffs, the pilot will unlock the full potential of rooftop solar in industrial precincts, commercial buildings, apartment complexes and households to generate and export their surplus energy into the local community, closer to where it’s used, reducing reliance on expensive new transmission infrastructure.
“Commercial and industrial businesses have struggled to get value from filling their roofs with solar and selling surplus energy because current wholesale prices are driving the price of energy below costs.
“The Community Power Network pilot changes this by offering customers a higher price for solar. This higher price and earning potential changes the game, making it commercially viable to install rooftop solar purely to export it to others in the community.
“But we also want to make things more equitable – so the pilot will also deliver benefits to people who don’t have solar – either because they rent, live in an apartment, or can’t afford it.
“We’ll do this by storing the excess solar we receive in a network of community batteries – pushing this energy back into the grid at times of peak demand. In doing so, we will reduce the need for future network upgrades and also generate a profit pool from operating the batteries, which we will share back with all customers in the catchment areas.
"The pilot is expected to generate $28.3 million in benefits over three years, which will be shared with local solar generators and customers in the trial catchment areas."
“The emphasis is on fairness – our modelling projects customers without solar will receive an annual electricity bill rebate of around $150 to $200 while those with rooftop solar and batteries will receive less – because they will have benefited from exporting their excess energy for a higher price.”
“As well as energy sourced close to demand being the cheapest form for our customers, the pilot will also help Ausgrid manage peak demand, stabilise the network and reduce the need for expensive grid upgrades,” Mr England said.
“These are outcomes that put downward pressure on prices across the network, and also enable urban areas that have the capacity, to take on some of the heavy lifting currently going on in rural and regional areas to drive the energy transition.”
The Community Power Network will also establish a third catchment area where commercial entities can test the local energy precinct concept in a free-market setting, using the same network data. This area will operate independently of the two Ausgrid catchment areas.
Developed in partnership with Endeavour Energy and Essential Energy, the NSW Distribution System Plan highlights opportunities to better use existing network infrastructure to meet future demand, unlocking billions of dollars in value, significantly reducing risk in the energy transition, and buying up to five years of breathing room while critical transmission infrastructure is built.