The Economics of Stand Alone Power Systems
An alternative to Grid Connection at the Fringe of the Grid
With funding from the Consumer Advocacy Panel, the Alternative Technology Association (ATA) recently undertook economic modelling to ascertain the costs and benefits of installing stand alone power systems (SAPS) for customers on the fringe of the electricity grid, as an alternative to distribution network replacement or augmentation.
Given the distances involved and low density of customer connection points in fringe of grid areas, in many cases it will be more cost effective to meet customer energy requirements with a SAPS, rather than by network augmentation.
This research sought to quantify the long run (or ‘levellised’) energy costs from a variety of SAPS designs as compared with the long run costs of upgrading the electricity grid in fringe of grid locations. More specifically, the research sought to identify the level of network capex at which it becomes more economically efficient to install a SAPS, rather than upgrade the electricity network.
The key finding of the research was the fact that it does not take significant amounts of network capital investment to make SAPS a more attractive economic proposition.
Whilst ATA was not surprised to see that even the most costly off-grid option was cheaper in the long term than a $100,000 network upgrade, the research shows that it is more cost effective to:
• spend approximately $78,000 up-front on a high quality, automated SAPS than to upgrade the grid at a cost of $50,000. To put that in perspective, $50,000 broadly equates to the cost of undergrounding 100 metres of existing powerline to a single home; or
• spend about $65,000 up-front on a high quality, automated SAPS and some basic home energy efficiency measures than upgrade the grid at a cost of $40,000.
ATA are of the view that these findings should be taken into account by governments and regulators across Australia when considering matters relating to energy supply in rural and remote areas.
For a summary of the research outcomes, please refer to the following document:
ATA are seeking feedback on the content and structure of the Summary for Policy Makers document. Should you have any feedback, please get in touch with Damien at Damien@ata.org.au
For further project details, including all of the detailed analysis and assumptions underpinning the modeling, please refer to the following two additional documents: