Decentralised and dispatchable Consumer Energy Resources (CER) are poised to make a considerable impact on regional electricity networks. The Queensland Farmers’ Federation (QFF) has conducted market research to identify the emerging appetite for local CERs across Queensland’s Renewable Energy Zones (QREZ), this research is captured in this report, featuring insights into the planning, utilisation, and affordability of integrating CERs on regional grids.

Download the full Final Report

Download the Projects Key Findings Summary

Download the Energy Needs of First Nations Communities in Regional Queensland

Executive Summary

Rising energy costs and an accelerating energy transition presents regional consumers and communities with an opportunity to consider consumer-owned energy resources as a solution to their evolving energy needs. Queensland Farmers’ Federation’s Microgrid in Agriculture study is just one of 36 Commonwealth funded feasibility projects that identified multiple technical and economic viability of microgrid scenarios across regional and remote Australia.

Furthermore, the development of utility scale investments in Renewable Energy Zones and the public ownership of community batteries surges ahead while regulation for grid connected, mid-scale, consumer owned projects face considerable regulatory and investment roadblocks. As larger energy consumers in regions can increasingly financially justify adopting a microgrid, community battery, or VPP regional grids can expect to face significant augmentation in the near future.

A dearth of data regarding the drivers and scale of an emerging appetite and market in regional Queensland. This Energy Consumers Australia (ECA) supported project presents an opportunity to close the data gap, share learnings across the energy ecosystem, and advocate for an inclusive and democratised modernisation of Queensland’s regional grids.

Aim

The Queensland Farmers’ Federation conducted market research to investigate the emerging interest and potential impact of decentralised consumer-owned energy resources (CERs) on regional electricity networks. The bottom-up study aimed to identify local appetite for CERs across Queensland’s estimated Renewable Energy Zones (QREZ) and insights that could improve planning, utilisation, and affordability of integrating CERs on regional grids.

Method

A literature review was conducted, informing the design of a 45 minute phone survey for the sampling of 9 participants across geographic (north QREZ, central QREZ, and south QREZ) and consumer segments (agricultural producer, regional business, and LGA). Sampling learnings informed the development of a shorter 20 minute phone survey which a market research firm then applied to a lead list provided by QFF resulting in 94 valid respondents. Quantitative and qualitative data was gathered and analysed predominately by the market research firm using tabular and thematic analysis, with some content and thematic analysis conducted by QFF.

Key Findings

A market for CERs exists and is growing in regional Queensland: From 103 respondents 20 implemented projects were identified with an additional 26 respondents likely to pursue a CER in the next 2-5 years. Local councils also reported an increased interest in community energy projects and project developers unanimously reported an increase in requests for CERs. Microgrids were the preferred technology with most respondents seeking grid-connected arrangements. All but 4 of the implemented projects were privately funded. Trends were similar across consumer groups and geographies.

Respondents see CERs as opportunities for local benefit: Agricultural producers and regional businesses see CERs as an opportunity to improve energy productivity, via cost reductions or improved power of choice. Some agricultural respondents are actively considering microgrids and VPPs with collocated ag producers while regional businesses have identified the competitive advantage renewable CERs offer. Regional councils seek opportunity for reduced energy costs for constituents if located near a REZ or community energy projects. Improving energy literacy will increase appetite for CERs: The top 2 reasons for a reluctance to adopt a CER were financial performance and a lack of knowledge about the technology. Councils explained education of the opportunities CERs can unlock locally is both desirable and likely to increase the appetite for mid-scale local energy projects, both consumer and community owned.

First Nations communities report energy vulnerability and inequities: Climate vulnerabilities, underserved existing infrastructure, expensive and unreliable energy resilience countermeasures, and public housing regulatory complexitiesdrive Aboriginal councils’ energy decision making. While there was interest, councils indicated CER adoption is unlikely due to the pressures of skills availability and other urgent community issues. Regulation, financial performance, and local skills are key risks: Project developers unanimously see regulatory uncertainty as the key risk to projects. Consumers are similarly concerned about regulatory uncertainty, after the financial performance of a project; the former frequently disadvantages the latter.
Councils are especially concerned about the access to expertise in regional communities to not only develop CERs, but affordably operate and maintain over the project life.

Key Recommendations

Based on the findings of the Project recommendations across stakeholder groups were made. Key recommendations include:

• A local power strategy should be included in the Net Zero Transition Authority and REZ remits to enable inclusion of regional CERs in investment, system design, and regulatory processes at the distribution network level
• Regulators toplan for robust communications infrastructure, clear regulatory pathways, and fit for future purpose energy products and services to de-risk the market and enable and onboard the democratisation of energy in regions.
• Regulatory innovation mechanisms like regulatory sandboxes or trial programs need to move alongside and quicker than the current Tariff Structure Statement process. More widespread and customer-led tariff trials under the AER mechanism should be advanced.
• A skills transition for regional communities is necessary to sustain equitable participation in energy transition. It is also recommended that a skills transition occur within regulatory bodies to ensure staff have the capacity to respond to innovative enquiries and proposals.
• Clear pathways for social housing and rental properties to access the benefits of renewable energy are needed, especially in low socio-economic communities.
• Proposed follow-on work includes a) an energy literacy campaign targeting local councils, regional communities, and business and ag consumers, and b) research into the opportunities for energy trading and benefit sharing within and between local councils.