By Leon Gettler
22 September 2011 – A top level report has recommended a radical overhaul of Australia’s electricity rules to speed up the adoption of cogeneration and trigeneration, creating more greener buildings around the country.
Australia already has a few state of the art commercial buildings working off cogeneration. They include the National Australia Bank’s primary data centre in Melbourne’s eastern suburbs, the Toyota headquarters and the Royal Children’s Hospital, both also in Melbourne. However, Australia has not had a massive takeup of cogeneration facilities. Industry players say it comes down to connection and cost issues. A building owner’s decisions are not the same as that of the electricity distributor working to their own schedule and that can potentially blow out costs.
- Download the report from here
John Thwaites, former Victorian Deputy Premier and Chairman of ClimateWorks Australia says that it’s not just a problem of getting electricity distributors and property owners singing off the same hymn sheet. It is about establishing a clear process. “Even with the best will in the world, they are not necessarily working together,’’ Thwaites says. “If you have a process, it’s cheaper.”
The changes recommended in the report seek to create that process. They are the first practical measures Australia has seen for a more rapid roll out of cogeneration and trigeneration. They include introducing a national, standardised connection process for small to medium sized generators, automatic connection rights, similar to residential solar PV systems; and practical district level licensing frameworks.
The report, Unlocking Barriers to Cogeneration, was prepared by ClimateWorks Australia and commissioned by the Property Council of Australia. Participants in the study providing input included Origin Energy, Cogent Energy, Citipower, United Energy, the Australian Energy Market Regulator and the Australian Energy Regulator.
Significantly, the players spanned the supply chain – customers, market participants, regulators, operators and policymakers – and they worked together over three months to help produce the report.
Cogeneration is the simultaneous production of electricity and heat from the same fuel source. Trigeneration is the simultaneous production of heat, cooling and electricity.
These processes reduce greenhouse gas emissions in two ways. First, they do it by using natural or waste gas instead of fossil fuel. More importantly, a single fuel source producing multiple forms of energy reduces fuel requirements, carbon dioxide emissions and more than doubles the amount of thermal efficiencies.
It is a technology that’s critical for the property sector which accounts for approximately 19 per cent of total energy consumption in Australia or 24 per cent of Australia’s total greenhouse gas emissions. Done properly, co-generation offers significant opportunities for low cost or cost-neutral abatement.
“Co and trigeneration technologies offer a critical step toward achieving the goal of green grids of building and precincts that power themselves,” said Peter Verwer, chief executive officer of the Property Council.
The ClimateWorks plan identifies 13.5 million tonnes of cost effective abatement potential through cogeneration by 2020.
“Increasingly, Australian property developers and owners are seeking to incorporate cogeneration into their existing buildings and new developments. However, they face a complex and burdensome connection process and regulatory barriers that inhibit them from deploying the technology,” the report says.
At the moment, however, cogeneration in Australia is severely under-utilised. Australia has only 3338 megawatts of cogeneration installed and 592 megawatts of that is fuelled by renewable sources. That means there are a lot of buildings that are generating greenhouse gases.
Barriers include inefficient connection processes that are costly and time consuming. This is because distributors, or Distribution Network Service Providers like Citipower-Powercor, Jemena, SP Ausnet and United Energy Distribution are not working with cogeneration project owners. The report cites uncertainty surrounding timelines, a lack of standard and readily available DNSP technical requirements, poor information exchange and uncertain, often high costs of connection.
“The connection process is inconsistent across DNSPs and lack transparency,” the report says.
The report also looks at problems developing projects that would cover multiple sites so that they would work across more than one building where those buildings are located next to each other.
“Barriers to multi-site cogeneration developments in particular discourage cogeneration project owners from pursuing larger systems,’’ the report says. “These barriers discourage economies of scale and the most efficient use of cogeneration technology being achieved.”
The report says the National Electricity Rules need to be overhauled to streamline the process for process for cogeneration project owners wanting to connect into the distribution network.
It recommends introducing a standardised connection process to replace the cumbersome and slow case by case approach now being used.
It also recommends the NER incorporate cogeneration facilities of up to five megawatts. This is an important step because it would ensure that cogeneration projects would not be burdened with too many constraints and would be treated the same as household solar panels.
The report says project owners could pay distributors a fee for services to work with them. Distributors would also be required to publish an annual exceptions report showing where there are constraints in the network preventing connections.
The report recommends the players work together to create economies of scale where there are large multi-site, and even district level, cogeneration projects.
Still, some industry players ask whether there is enough to encourage building owners to adopt cogeneration. Brad Knowles, energy services manager for controls company Alerton says the question is whether building owners will find it profitable switching to cogeneration.
He says one possible way would be for building owners to sell electricity back to distributors. “Unless there is some sort of commercial viability, where is the incentive?” Knowles says.
Just another issue to sort out on the path to cogeneration.
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