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North West Renewable Energy Community - submission to medium-scale solar discussion paper

Questions for Response.

North West Renewable Energy Community
Prepared by Mr Alex Cross & Mr Stephen Kelly

Medium-Scale Solar Working Group
October 2010

The material contained in this publication has been developed by the Medium-Scale Solar Working Group. The views and opinions expressed in the materials do not necessarily reflect the views of or have the endorsement of all members of the Working Group, nor indicate the commitment of all members to a particular course of action. Nor do the views and opinions expressed in the materials necessarily reflect those of the State of Victoria or the Minister for Energy and Resources. The State of Victoria and the Medium-Scale Solar Working Group do not guarantee that this publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

The following is a listing of questions extracted from the Medium-Scale Solar Discussion Paper and cross-referenced to the relevant section for ease of reference. Please note that there is no requirement to provide an answer to all of the questions posed in the Discussion Paper.

Section 4: Definition of Medium-Scale Solar

QU1: It is appropriate to define medium-scale solar as falling between 100kW and 5MW?

Defining size of medium scale should be considered in the context of the distribution network and the maximum load it can carry at peak capacity, because the potential to use aggregated models may be limited defined by 5 MW if carrying capacity is much greater.

Medium scale should be set at national level with regards to cross border ownership and management.

Up to 30 MW can still be consistent with exemption NEM registration. Appendix 6, point 4 (exemptions).

Section 5: Identification of Potential Barriers to Uptake of Medium-Scale Solar

QU3: What are the immediate financial short-term barriers to investing in the medium-scale solar sector and how do these differ from investment in small or large-sale solar?

Access to investment funds through capital markets (Investment Managers and Banking). Medium scale is too large for residential, small scale investment, but not large enough to attract the mature financial industry players.

Lack of clarity regarding the carbon price and government policy.

QU7: What is the most significant barrier affecting your particular market segment?

The most significant barrier for a community orientated project is the complexity and ability to access the electricity market fairly and equitably.

Section 6.1: Broader Policy Aims for Medium-Scale Solar

QU9: What contribution is medium-scale solar likely to make to the security and reliability of supply?

The correlation between commercial peak demand and the potential maximisation of power during the day would contribute to the security of supply and reliability in the local distribution network. In particular the evident for this correlation is well demonstrated in the Mildura region.

QU11: What are the opportunities for establishing local manufacture and production of solar technologies? To what extent are these regionalised?

In the context of community orientated projects there is much greater scope to generate and maintain local capability in project development, delivery and on-going operations.

QU12: What are the benefits of increased community engagement in this space over and above financial benefits? To what extent can these be quantified or do they remain largely intangible?

Demonstrated examples of communities engaged in the community projects
Stronger sense of identity, capacity to make individual contributions in the face of Climate Change.
Existing metrics such as the Mildura Social Indicators Report by Professor Vinson could be used to track changes in key social indicators

QU13: What support models for medium-scale solar are likely to provide the greatest opportunities for community engagement?

Long term policy decisions with review structured to meet market demand and conditions.

A feed in tariff model that provides a modest additional reward for community owned projects which will encourage the community sector and acknowledge the complexity of the community ownership model.

Section 6.2: Specific Drivers for Investing in Medium-Scale Solar

QU16: What are longer-term financial drivers for investing in the medium-scale solar sector?

Fair return on investment.

QU18: What is the primary driver in your particular instance and why?

To contribute to the North West Mallee Region of Victoria’s transition to a low carbon economy.

Section 6.3: Potential for Medium-Scale Solar in Victoria

QU19: To what extent is increased uptake of medium-scale solar a regionalised opportunity?

In the context of ground mounted systems significant, regions have access to suitable large sites located near the distribution networks.

QU21: To what extent is the need to import system components likely to impact on a project’s capital costs (for example through foreign exchange rates and increased distribution costs)?

Currently based on the Australia manufacturing industry capacity to produce relevant components the need to import will be significant. The impact of foreign exchange could have a major influence on the ability to proceed with project and the complexity of foreign exchange markets present considerable risk to community orientated projects.

QU23: How are safety and OH&S concerns best addressed when implementing medium-scale solar?

Adopting standard work place practices applied to small scale installation for roof installation and standard construction process for ground based installation.