Going offgrid to improve climate resilience reduces costs to all energy consumers

For the first time, hard numbers on the benefits of offgrid energy systems in meeting the challenge of climate change, are now available.

The first-pass report, Network Resilience Potential benefits of a requirement to provide for resilience, was prepared for Total Environment Centre by consultants CutlerMerz with funding from Energy Consumers Australia.  Its key findings on stand-alone power systems (SAPS) are:

  • Between 192 and 244 communities had a positive business case when the climate benefits of going offgrid were taken into account.
  • There would be large net economic benefits of between $980M and $1.5B in transitioning small towns in bushfire prone regions to SAPS.

TEC’s energy market advocate Mark Byrne explained, “Bushfires and other climate risks are increasing the cost of maintaining electricity supply, especially in rural and remote parts of Australia. We’ll be proposing a rule change for the National Electricity Market to include resilience in power planning.”

“The electricity rules do not currently require distribution networks to consider how increasing climate risks change the business case for different ways of supplying energy, for instance after a bushfire destroys the poles and wires which carry electricity to a town or property.”

“In the past, networks would have just rebuilt what was there before. But now they should be considering whether it makes more sense to move customers onto stand-alone power systems (SAPS), whether that means individual power systems or microgrids.”

CutlerMerz assessed more than two thousand small towns, villages and hamlets in bushfire and cyclone risk areas across the NEM. They calculated the savings in avoided outages and line rebuilds after bushfires and cyclones that would occur if increasing climate risks were taken into account.

They found between 192 and 244 communities where the business case would be positive when the climate benefits of going offgrid were taken into account.

CutlerMerz concluded that “There appear to be large net economic benefits of between $980M and $1.5B in transitioning small towns in bushfire prone regions to SAPS”.

Mark Byrne comments that “This represents a substantial long-term saving to electricity consumers from considering climate change impacts. There are other non-economic benefits as well. These include improved reliability for fringe of grid customers and greater local involvement in energy supply – especially when microgrids include community solar and battery projects.”

“Naturally it is no substitute for decarbonising the energy system, but we need to recognise that climate change is here already and unfortunately it's only going to get worse, so we need to plan accordingly.”

TEC intends to use the findings to support the rule change request It will lodge with the Australian Energy Market Commission later this year.

The CutlerMerz report can be accessed here.

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