The Australian government has announced it will provide funding for feasibility studies into microgrids. Government support is expected to help fuel a boom of the technology in Australia.

Microgrids are defined as an energy source that operates locally. They are suited to isolated regions and may be linked to the traditional grid network, though they may be able to detach and operate independently in the case of emergencies or where costs are too high to connect to the wider grid.

Funding for microgrids

The announcement by Energy Minister Angus Taylor heralded the $AUD 50 million grant package through the Regional and Remote Communities Reliability Fund. The first round of funding is now open with up to $20 million available upon application to the Australian Renewable Energy Agency (ARENA) and Clean Energy Finance Corporation (CEFC).

The minister said microgrid technology was an important energy initiative in rural and remote locations in the country.

“The grants will fund community organizations, electricity distribution businesses and other interested entities to undertake feasibility studies on the viability of microgrid solutions in off-grid and fringe-of-grid locations,” he said in a press statement.

Taylor added that microgrids were now comparatively cost-effective with renewables-based microgrids saving millions of dollars on infrastructure and the transport of diesel fuel in remote localities.

Consumers drive the change

The shift towards a decentralized energy system, away from a centralized structure, makes sense in a country as large and diverse as Australia. Unsustainable energy costs charged by the country’s suppliers over the last decade, combined with the increasing affordability of renewable energy such as wind and solar, have driven a more hands-on approach from consumers.

The so-called distributed energy resources (DER) revolution occurring in Australia — and around the world — is reliant on consumers as the “driving force” of change, according to an article in the influential Australian Financial Review.

“Consumers and their communities are the driving force of change. The emergence of the proactive consumer as the catalyst for change is partly due to Australia’s high and unsustainable energy costs. Household and small businesses face electricity price spikes even in a relatively flat demand environment. Affordability remains a serious issue,” the article stated.

“Cost alone is no longer the primary driver of decision-making. It is about listening to customers, delivering tailored energy products and services that resonate, and rebuilding trust.”

Microgrid cheaper in remote communities

The newspaper points out that the emphasis on microgrids is an important component of the shift towards household energy independence, particularly in regional and remote locations.

Microgrids have long been known to be the cheaper option for remote communities, but federal government rules have prevented their construction. However, a recent rule change by the Australian Energy Market Commission (AEMC) is expected to encourage networks to build them where feasible.