Submitting the SCC Grant Application

The process of preparing the Grant Application was itself very helpful for the following reasons:

  • It sharpened our clarity as to our rationale for embarking on this time-consuming project,
  • It also clarified in broad terms the main steps we need to undertake,
  • It provided us with an initial time frame for the project,
  • It prompted us to estimate a budget, including how much to allow for in our own time commitment, and how much we might need in financial support from the Owners Corporation,
  • Perhaps most importantly, the related conversations with the Council Sustainability Manager gave us our first advice on potential consultant and contractor advisors.

Alex Byrne joined the Working Party as we were working on our Grant Application with his early experience as an Electrical Engineer expanding our collective expertise.  We had several Working Party meetings in early June in the course of preparing our application the first draft of which we submitted through the Sustainability Manager for reviewing by the Council’s Carbon Manager and Green Infrastructure Manager as a precursor to receiving a link to do an on-line full application for the Round 2 opening on June 19.

At this time on our behalf Alex began to contact potential consultants and contractors to gain information about likely design and installation costs together with a set of options as to how to undertake the three stages of the project – the options, design and installation.  We started with the following questions:

  • What microgrid alternatives do we have? In particular, would there be an advantage in the Owners Corporation paying for the installation and then including the electricity costs in each Unit’s quarterly account?
  • Would there be any potential economies of scale by expanding the Microgrid to cover other strata communities adjacent to our site?
  • What advantages and/or disadvantages might there be in taking a block by block development as opposed to a whole site approach from the start?
  • What physical additions would be needed to house the battery storage units?
  • What legal implications might there be with regard to entering into contractual arrangements for the installation? Specifically, will there need to a special by-law created?

Bjorn’s advice to us

Based on his Stucco experience Bjorn suggested to us that we initially aim to limit our system to solar collection and delivery to our units, probably in a 9 unit or fewer structure to avoid being treated as a Registrable Applicant by the AER.  This will still require that we seek approval to have a D2 Deemed retail license to sell electricity.  Thus, the Strata would own all the meters and bill the connected units/consumers.  Every couple of years the Strata might then go to the market to seek bids for cheaper electricity provision.  [I’m not sure that I have got this right].  This would mean leaving the Battery Storage phase until later after we have refined our collection and charging system.

To prepare for this we need to collect data about current electricity usage over the past 12 months from each of the households so we can establish our ‘before’ costs across the complex.  We also need to commission a contractor to examine our roof spaces and what they could generate given different degrees of access to the sun over the four seasons.

Our next steps

  1. Obtaining the household electricity bills. At this stage we think most if not all owners will be likely to assist with this data collection.  There may be only one owner whose property is an investment and he retains an active interest in the Strata.
  2. Bjorn stressed that most of the emissions reduction in Australia over the past couple of decades has been due to much increased efficiency of energy usage rather than the advent of renewables. This, logically, raises the potential for our households to benefit from reduced waste and/or greater efficiency of usage. Therefore, we agreed we should offer to undertake an energy audit for each unit.
  3. We need to choose a Contractor to undertake the analysis of our rooftop solar collection potential. The staff at the SCC are likely to be able to suggest possible contractors from which we could seek quotes.  Bjorn thought that Energy Smart Strata could be a possibility and that Green Strata are very good on legal and regulatory issues.  It could also be worth contacting Ausgrid to see what their intentions might be given the research they have been doing on community attitudes to future energy possibilities.

We can pursue all of the above while we are awaiting the outcome of our Innovation Grant Application to SCC.

Post workshop note from Bjorn

My notes from our discussion on next steps were:

1) Get bills (great/crucial engagement opportunity).

2) Do energy efficiency audit – possibly DIY by members with interest in teaching themselves the basics (another great/crucial engagement opportunity).

3) Decide on how tackle embedded network issue. (My advice remains looking at non-embedded network solutions, favouring engineering challenges/solutions to regulatory ones!)

4) Decide on engineering solution for solar system.

Lastly, I had an interesting surprise visit from a law lecturer from the ANU today who suggested that one really needs to prepare a rule change proposal to the AEMC to take down the barriers for exactly the regulatory barriers we discussed this morning. I’m not holding my breath, but it’s encouraging to hear that legal types are engaging with these challenges.

Three-hour Workshop/Meeting with Bjorn Sturmberg on Tuesday, September 6th

As noted above, we initiated this workshop following the recommendation of the SCC group that advised us on our Grant Application.  Bjorn is a Physicist whose PhD was focused on Solar Panel technology and he played a major role in the success of the Stucco Student Housing Cooperative’s installation of an AER-approved embedded solar collection and storage network.  He was an ideal person for us to learn from since this has been the kind of network we have been thinking of.

There are 40 tenants in the Stucco Co-op.  Perhaps the most outstanding figures arising from this experience are as follows: the design and planning for the network took about 3-4 months and the installation 8 days; dealing with the Australian Energy Regulator (AER) took 9 months and cost $130K in pro bono legal fees.  The network of solar panels and battery storage feed a parent meter connected to the grid.  This meter connects to individual meters for each unit so that the Co-op is the seller of electricity to the 40 consumers.

In addition to the technical questions of the types of panels, batteries and meters and their configuration the design phase had to address the important issue of pricing covering such things as differences in time of use and the different rates for local (system) provision versus grid provision.  All of these things involved tricky decisions which the eventual beneficiaries (the occupants) needed to engage with if they were to support the shift to the network.

It would be easy to conclude that these technical, economic and social issues would be the really difficult ones to overcome before there would be sufficient support to make the transition.  Indeed, later in the discussion, Bjorn affirmed very strongly that if we do proceed to an embedded network we MUST keep control and ownership of the meters.  But, the Stucco experience demonstrated that the really difficult issues are the bureaucratic and legal ones that arise in dealing with the AER.

It appears that the primary emphases of the AER when dealing with small to medium-sized network applications are to ensure competition between providers and power for consumers.  It seems that minimising the cost to consumers via a cooperative provider is of no account to the AER.  Thus, when it dealt with Stucco it demanded exhaustive contract provisions in granting the license for Stucco to sell electricity and in the service commitments to its consumers the 40 student occupants.

It is instructive to learn that the relative costs of this whole process from go to woe were $95K for the design, provision and installation of the technical system including building modification costs (including fire-proofing the battery installation) so that the Co-op covered the full cost of connection to the grid. This compared with $130K for the legal services required to deal with the AER.  This extreme difference would have torpedoed the project were it not for the provision of pro bono legal work by former tenants of the Co-op.

Despite this tale of struggle, the outcomes since the commencement of the embedded network show that the Co-op as a whole is paying 90% less for its electricity and the student consumers are paying 50% less, the difference covering the amortisation of the $95K capital cost of connecting to the grid.

Consultation with SCC Officers on Tuesday 18th July

Paul, Alex and Neil met with four of the Sydney Council officers whose roles touch on the issues involved in Innovation Grants in the energy and sustainability areas.  Kate Read arranged the meeting together with our first contact person, Jon Boys.  Also present were Nik Midlam and Chris Barrett.

Chris challenged us immediately by stressing that projects like ours would have to overcome significant difficulties imposed by the Australian Energy Regulator [AER] which must approve any form of electricity supply to consumers.  The case of Stucco Apartments, a Newtown Student Housing Cooperative, provided a cautionary example of the technical and legal difficulties we may face.  Bjorn Sturmberg, a consultant who worked closely with the Stucco applicants, was recommended as a valuable advisor for us as we undertake our proposed Feasibility Study.

Chris also stressed that we would be wise with our residents NOT to base our motivation solely on the potential energy cost savings, though we wonder how we would get buy-in without that incentive.  Tricky issues that we will need to address include clarifying how our collected energy will be shared equitably since not everyone will benefit equally and whether we will be better off to treat our Strata as two separate developments of 9+9 units in order to qualify with the AER for a ‘deemed exemption’ status which has much less onerous conditions attached.

Following the meeting Kate Read sent us the following very helpful summary to help us shape our final Innovation Grant Application which had to be submitted by the 24th July.  Kate wrote:

  • Application would be strengthened by confirmation from residents that they support in-principle the application and are interested in understanding whether a microgrid presents a cost-effective option for them
  • The City recently launched its Environmental Strategy and Action Plan – would be helpful for the application to explicitly articulate linkages/how the project supports the City’s endeavours around renewable energy
  • Budget

o   In the budget section of the application form, amounts need to be shown in both income section and expenditure section with sufficient detail  so that assessors can see clearly what is being funded (eg if project management is included in the more detailed budget, this should show hourly rate and number of hours attributed to various elements like survey development, engagement with hotels, survey delivery, results analysis etc)

o   Quotes will be needed for any third party services that form part of the project

o   The costing seems very low – when the assessment panel does their assessment, value for money is one aspect that they will be considering but initial conversations here suggest that provided there was justification for each of the costings $20,000 would not be an unusual request in this context

  • Include in the application the key themes that will structure the business case/feasibility report; including noting that the business case will consider how the project will tackle particular residents not wanting to participate
  • As per our discussion, Bjorn’s insights into the legal and regulatory barriers that were faced by Stucco and potential pre-emptive action will be helpful
  • Chris Barrett indicated that there would be benefit in approaching the project by the clusters of smaller blocks rather than the site as a whole – because once projects get over a certain scale they trigger additional requirements. Reflecting on this I think it would be good for the business case to cover off an option A and option B – one dealing with the site as a whole, and one approaching the project as per Chris’ suggestion. The reason I think this is because the innovation grant funding is intended to fund projects which are scalable. The built form of most of the apartments in the City of Sydney area are at the larger scale so it would be good to understand the learnings/feasibility/implications of the site being approached as a whole.

 

After a brief meeting of the Working Group the next day, Alex prepared a new, significantly revised Application to which Paul and Neil added some minor amendments before we submitted it to Cameron Ellis of the SCC Grants Team on the On-line Application Form.  At this time Alex also made contact with Bjorn Sturmberg who agreed to conduct a three-hour workshop with us to help us sharpen our Feasibility Study.

Support to cover the $500 cost of this workshop was sought and granted by the Blackwattle Mews Strata Committee.  The working group plans to invite members of the Committee to join us for the workshop and to invite other interested residents to join us for a summary of our conclusions in the last half hour or so.  We expect to conduct this workshop at the local Glebe Community Centre.

Working Party early meetings

The possibility of a Council Grant was an unexpected potential benefit so this inevitably shaped a lot of our initial thinking.  Nevertheless, we found that the complexity of the task we faced led us to canvass a wide range of issues such as:

  • Should we begin to maintain a blog which keeps track of our journey on this project, the better to remember our process and be able to assist others subsequently.
  • How do we identify and/or locate the companies that are already or that could be capable to deliver retrofitted solar collection and battery storage to strata developments,
  • What potential is there for delivering savings to all residents by simply having just one connection to the grid network instead of 18 separate ones.
  • How would a shared system provide separate charges according to usage.
  • How can we persuade all the residents (including the tenanted occupiers) to provide us with their electricity usage accounts for, say, the past 12 months so we can establish a ‘before’ measure of costs.
  • Could we set up a communication system with residents based on recruiting a link or contact person for each block.
  • Given that our complex consists of four separate blocks, what advantages and disadvantages accrues from this, for example, will it make the interconnections more difficult on the one hand while possibly making the implementation easier if not all owners want to buy in.
  • Could it be possible for us as a Corporation to borrow the installation cost and repay it over a set period from the savings as they accrue.
  • Should we begin our efficiency improvement effort by ensuring first that the current OC electricity usage is as efficient as possible.
  • Could we then initiate energy audits on the premises of all residents including advice as to the most efficient appliances to install whenever upgrades are contemplated.
  • Would there be any scalable advantage in extending the Microgrid beyond this one Owners Corporation to build a neighbourhood connection.
  • Are there other resource issues in the complex such as waste and water management that could be amenable to greater efficiencies.

First steps

During 2016 news about the rapid progress in the capacity of solar rooftop collectors with battery storage systems to reduce electricity costs persuaded Neil Watson to suggest to the Strata Committee of Blackwattle Mews Strata in Glebe that it might be worth investigating the possibility of installing a Microgrid in the townhouse complex of 18 units.  The Committee endorsed this initiative at their November meeting that year.

Neil then wrote to all the residents in January 2017 to raise the idea and seek both in principle support and practical support from those prepared to join a Working Party to investigate the feasibility of the project.  His neighbours, Luci Kafka and Paul White, agreed to make up the Working Party.  In preparing for its first meeting, Neil contacted the Sydney City Council which covers Glebe to find out whether the Council provides any assistance with such investigations.

Jonathon Boys, the Council’s Sustainability Programs Coordinator responded and informed us that there was indeed assistance in the form of Innovation Grants of two kinds – an initial Feasibility Study Grant and then Demonstration Implementation Grants (see Appendix 1 for details).  So, the first two meetings of the Working Party began to get to grips with the investigation task with the possibility of gaining financial support for a Feasibility Study.