The report’s 11 recommendations – including the use of reverse auctions to contract new large-scale renewables, and the gradual, long-term replacement of the territory’s gas power fleet with large-scale battery storage – have all been given support, or “in-principle” support, by the NT government.
In a statement on Monday, the government said it would provide $750,000 to the Territory-owned utility, Power Water, to develop and “a dynamic system model,” which will ensure that increasing levels of renewable energy can be integrated into the grid in a stable and predictable way.
The government will also spend $4.5 million on household grants of up to $1000 to encourage rooftop solar uptake – currently installed on just 6 per cent of households, compared to 14 per cent on average.
The money will also be used to encourage the installation of battery storage and other smart technologies, like solar pool pumps, smart meters, efficient lighting, solar hot water, energy efficient appliances, and efficiency audits.
Chief Minister Michael Gunner said the shift to renewables would put “downward pressure” on the cost of electricity generation, while maintaining the energy network trifecta – oft-quoted by the federal government – of affordability, reliability and security.
“All the advice we’ve got … is that the cost of renewables is coming down so this provides a… better way to provide reliable and affordable electricity for Territorians,” he said.
Committee chairman Alan Langworthy – who led the six-person panel behind the report, which included former ARENA chair Greg Bourne and Climate Council CEO Amanda McKenzie – said while no electricity system was 100 per cent reliable, a mix of gas and renewable energy would make the NT’s electricity grid one of Australia’s most stable.
The long-awaited, 86-page Roadmap to Renewables Report, commissioned by the NT government last year, maps a slow, and cautious route to take the Territory’s three grids, currently 96 per cent powered by gas and diesel generation, to an installed total of 450MW renewables, from just over 36MW today.
Much of that new capacity would be made up of large-scale solar PV, which the report estimates can be built at between $80-100/MWh – a higher price than in other states and territories around Australia, which the report attributes “the remoteness premium of the NT, as well as the additional costs associated with building in our challenging environment.”
This would be complemented by the Territory’s existing gas plant fleet which, the report says, would be “readily available at a predictable price” to manage intermittency and plant reallocation from ‘prime power’ to ‘standby’ status.
Further down the track, and as battery technology improves and reduces in cost, the report says batteries can “logically and slowly replace the aged gas plant.”
But behind the meter solar and storage would also be encouraged, not just with subsidies but potentially through changes to the solar tariff – currently Australia’s highest, at 25.67c/kWh (29.87/kWh for commercial).
While this high tariff makes rooftop solar an obvious choice for Territorians, it has not translated to high uptake of the technology, with only 6 per cent of homes installing PV in the NT compared to an average of 14 per cent for the rest of Australia.
Neither has it encouraged self-consumption, via battery storage, with solar households being paid as much for power they send to the grid as they do for power they buy from the grid.
“Many Territorians have already installed solar PV on the roofs of their homes and businesses to save on their electricity bills, reduce the consumption of fossil fuels, and to reduce greenhouse gas emissions,” the report says.
“The shift to renewable energy is inevitable, and the Northern Territory is uniquely placed to take advantage of this technological advance to deliver secure, reliable and affordable power,” NT chief minister Micahel Gunner said in an statement on Monday.
“Our abundance of renewable resources and our existing gas power infrastructure puts us in the box seat.
“Increased investment in renewable energy creates jobs, and delivering cheap and reliable energy for businesses and families is a boost for economic development and population growth.