Momentum in the community-owned renewable energy sector has gained even more traction with this week’s release of the Zero Net Energy Town Blueprint, a plan for towns to achieve net zero grid energy use through a combination of energy efficiency and renewable energy projects.
According to Nicky Ison, founding director of the Community Power Agency and a senior research consultant with UTS’s Institute for Sustainable Futures, the potential of the sector to also generate solid financial returns is now starting to attract impact investors and superannuation dollars.
Ms Ison said that of the 23 community-owned energy projects currently in operation, between one-third and half are funded by investment, and the balance through donations.
“Experienced investors see it as an ethical investment and want to promote and progress these kinds of things,” she said.
“Then if it doesn’t generate a return, it simply becomes an offset.”
Most, however, are showing good returns, she said. For example, RePower Shoalhaven, a solar power project, has just issued its first round of dividends at a level above initial projections.
“There are some serious impact investors getting on board [in the community power sector]. And that is bringing an added level of fiduciary responsibility to projects,” Ms Ison said.
“We are seeing the early adopters here. As it grows and shows it can return dollars to investors, and then show it is able to manage governance, people will start to see it as a way of putting a bit aside for their retirement.”
The bottom line is, she said, we are not going to stop using electricity in Australia any time soon.
One of the challenges the sector faces is that the energy market is complex and highly regulated, she said, and profit margins low.
Current models for selling power generated from projects include a power purchase agreement, such as in place for the Hepburn Springs and Denmark community wind farms, or sale of energy direct to the host site, such as Shoalhaven Bowling Club.
“Community energy enterprises are at the cutting edge of innovating new models,” Ms Ison said.
They are also helping address market failures, such as the obstacles renters, low income households and apartment dwellers face in adopting domestic solar systems.
It’s about looking at new ways to deliver energy self-sufficiency, security and sovereignty, and “reducing a community’s dependence on organisations outside their community”.
There is also a sense of pride, she said, gained when people do something innovative.
One of the observable trends in the sector is the higher engagement with planning and developing community energy projects in small towns and villages, particularly in regional areas.
Ms Ison said this was partly due to the “real connection to place and community” that exists. This fuels people’s urge to “give back” to their town or village, and community energy projects are an excellent way to do this as they also involve the element of social enterprise.
“It’s what we call the win-win-win,” she said.
A collective impact assessment of the sector earlier this year undertaken by the Coalition for Community Energy, of which Ms Ison is national coordinator, showed there was at that time $23 million invested in the sector. This comprised a large proportion of donations as well as returnable equity.
Since the impact assessment data was gathered, five more projects have come online and numerous more entered the planning phase, including Lismore and Darling Harbour. There are up to 20 groups in Victoria trying to develop their first project, Ms Ison said. And the Citizens Own Renewable Network Australia (CORENA) fund is providing a zero-interest loan for its seventh funded project.
The Central NSW Renewable Energy Corporation is working with renewable energy developer Infigen Energy to raise funds to purchase one of the turbines at the company’s Flyers Creek Wind Farm.
“Things are moving very quickly now,” Ms Ison said.
In Western Australia, although Denmark Community Wind was one of the first projects of its kind in the country, Ms Ison said there was not much policy support for community-owned power at a state level, unlike in NSW, Victoria and SA.
In Victoria, while there is policy support, there is an issue around retail license exemptions, Ms Ison said, and in Queensland there aren’t any more impediments to renewables since the change of government, but there also hasn’t been any specific and proactive support.
It was NSW government support that provided the seed funding for the Z-NET Blueprint, which is now available for other communities to use.
The project’s new national collaboration group, led by Moreland Energy Foundation, C4CE and Starfish Enterprises, is also calling for expressions of interest from towns and villages for a round two of the project.
The blueprint for Uralla – the focus of the first plan – shows how the town can initially achieve 70 per cent savings in energy use through a combination of energy efficiency and on-site generation. Methods proposed to get to 100 per cent zero net include purchasing renewable energy from existing or future projects, or developing its own.
At Wednesday’s launch in Uralla, NSW environment minister Mark Speakman said the aim of the blueprint was to identify how an Australian community could satisfy all its energy needs from renewable energy, in a competitive way in terms of price, quality, security and reliability.
“Funded through the government’s Renewable Energy Action Plan, the Zero Net Energy Town blueprint has the potential to attract renewable energy investment, to build community support and to increase local renewable energy expertise,” Mr Speakman said.
“The Uralla project has been an exciting and ambitious challenge, with the blueprint providing a model for other NSW towns.”
NSW energy minister Anthony Roberts said the share of renewable energy in NSW’s electricity generation mix had almost doubled in the past 5-6 years. In 2013, almost 13 per cent of the state’s energy generation came from renewable sources.
“There are currently estimated to be more than 13,000 jobs supported by renewable energy in NSW. This includes 4400 direct renewable energy jobs,” Mr Roberts said.
- Read the Z-NET Blueprint or lodge an expression of interest for Round 2.