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Victoria announces first microgrid consortium

A partnership between RMIT researchers, Moreland Energy Foundation, renewable energy services business, Ovida, and solar retailer Allume Energy has won a $980,000 grant from the Victorian government towards a trial of microgrids for multi-tenanted buildings.

The $2 million Ovida Community Energy Hub project will see a combination of shared solar PV, battery storage and microgrid technology installed at three separate buildings in Melbourne’s Northern suburbs for 10 years. The government expects the hub will benefit about 650 customers, generate 5000 kWh of solar energy and support 11,000 kWh of energy storage.

This pilot is part of a $10 million Microgrid Demonstration Program first announced by the government in 2017 as part of its $146 million Renewable Energy Action Plan. The program will support eight state-wide microgrid projects worth over $37 million. Details of the other seven are yet to be announced.

“Microgrid projects are part of our plan to drive down energy prices, reduce emissions and create a pipeline of investment in renewable energy,” Victorian minister for energy Lily D’Ambrosio said.

“This initiative will allow more households and businesses in multi-tenanted buildings to take control of their energy bills.”

In addition to expected benefits of low-carbon energy and lower energy bills, microgrids can allow a building to operate independently from the grid in the event of a severe storm or power outage. They can also share energy produced by the system into the grid.

Ovida spokesman Paul Adams said the project team is aiming to select one commercial building, one multi-residential building and a mixed-use building for the pilot. It is expected the buildings will have between 10 and 50 tenants each.

Each site will receive a microgrid solution tailored for its specific energy needs so that Ovida can deliver the best value outcome, he said.

One aim of the project is to overcome barriers that prevent tenants in shared buildings from benefiting from the lower carbon, lower cost energy that solar PV and storage can deliver, Mr Adams said.

“Traditionally solar arrangements in multi-tenanted apartment blocks have been all or nothing – meaning all residents had to invest in, and use the system, for it to work.

“We know this can be a challenge because apartment blocks often include long-term residents, owners, and short-term occupants who each have different energy needs and expectations.”

The plan is to share knowledge gained from the trial, including its outcomes and key lessons for microgrids in the multi-tenant setting.

“Ultimately the trial seeks to inform the commercial conditions needed to overcome the existing microgrid challenges faced by multi-tenanted buildings,” Mr Adams said.

“Data and information from the trial sites will help establish these conditions and how they can be replicated and scaled.”

He said that going forward, the company will be in a position then to “unlock the opportunity for thousands of Australians living in multi-tenanted buildings” to benefit from solar and batteries without any upfront costs

The trial “tackles energy affordability head-on”.

It will operate as a Power Purchase Agreement for participants. Ovida will own, operate and maintain all the on-site microgrid assets, and supply the electricity generated to tenants who will be billed for their consumption a lower cost than retail grid electricity.

“This removes inequality in the market place and by trialling the microgrid technology, we can explore how companies can viably supply such solutions – again, with no financial commitment required from homeowners,” Mr Adams said.

Customers will still retain their existing retail grid arrangement, as the microgrid energy will be “purely supplementary behind the meter”.

“This business model builds on Ovida’s existing solar PPA product by including battery storage, smart distribution technologies and exploring network benefits.”

More broadly, Ovida plans to continue rolling out its PPA offer to Australian businesses, Mr Adams said.

It is also looking to bring additional energy solution products to market “as they become feasible”.

The Moreland Energy Foundation will be leading the hub’s marketing, customer acquisition and community engagement. It will also lead the monitoring and evaluation framework.

“MEFL will play a critical role in ensuring the model delivers lower cost energy to consumers, identifying and engaging project participants and evaluating effectiveness of the model in meeting consumer needs,” MEFL chief executive Alison Rowe said.

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