Morrison government to announce $50.4m fund to support exploratory work for up to 50 projects

This article is more than 1 year old

This article is more than 1 year old

The Morrison government will use next week’s budget to roll out funding for micro-grids in regional and remote communities, including in the hotly contested electoral battleground of north Queensland.

The budget is expected to include a new $50.4m fund to support exploratory work for up to 50 projects in regional and remote communities, with feasibility studies investigating whether building a micro-grid is cost-effective and whether existing off-grid capabilities can be upgraded with more up-to-date technology.

Micro-grids are discrete power systems using diesel or renewable power that can either operate completely off the electricity grid, or connect to the grid. With energy costs high and with transmission infrastructure suboptimal in parts of the country, micro-grids, increasingly favoured by farmers and miners, have become a growing component of Australia’s power infrastructure.

The energy minister, Angus Taylor, has faced pressure from Nationals to give MPs bearing the brunt of a regional backlash concrete commitments they can sell to their constituents ahead of the election on new power generation, and measures reducing power prices.

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Taylor says as the cost of providing off-grid electricity continues to fall, “in some cases it will be cheaper to provide off-grid supply rather than maintain and replace the long power lines that connect remote customers to the grid”.

He says moving some remote customers to off-grid solutions will deliver more reliable energy supply, deliver savings on network costs and could also reduce bushfire risks.

Taylor says funding feasibility studies will allow customers to establish whether a micro-grid is a viable option, or determine whether to transition from diesel generators to “local generation and storage opportunities” – meaning firmed renewables.

Those projects could also find additional taxpayer support from agencies like the Australian Renewable Energy Agency and Clean Energy Finance Corporation.

A report in 2018 that examined the potential of concentrated solar technology with storage in Australia found that some users in fringe-of-grid locations would be able to leave the network while maintaining reliability standards and lowering power costs.

It found the optimal configurations in these kinds of locations “would include a hybrid of photovoltaics (PV) with a small battery capacity to manage transitions, concentrated solar technology, and a standby diesel system”.

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With the budget looming and the election contest in sight, the government has attempted this week to paper over a damaging fracture between Nationals and Liberals over energy policy and new coal generation.

Scott Morrison has attempted to mollify rebel Queenslanders by promising to examine whether a new coal plant is needed in north Queensland, and by signing off on a shortlist for new power generation that includes “one very small” coal project in New South Wales proposed by the coal baron and LNP donor, Trevor St Baker.

While Nationals have gained nothing concrete as a consequence of this week’s cabinet decision – with Morrison making it clear the generation projects on the short list would now “be examined in closer detail before any final decision is made on any underwriting on the price position for those projects”, and saying there was no specific “commitment to underwrite or support” the new coal project – the rebels have largely stopped their public agitation.