Encouraging local energy projects

 By Nicholas Newman

Traditional fossil-fuel based and capital-intensive energy projects, owned by national and international oil and gas companies or large utilities such as Eskom, RWE, Eon, are taking a turn…

In contrast, established oil and gas companies are joining pioneering independent E&P companies, such as those that develop U.S. shale resources. At the same time, advances in wind and solar technology, along with falling costs and generous government incentives, have encouraged individuals, businesses and communities to employ technologies that allow them to generate their own power.
These factors, reinforced by the climate agenda, have encouraged many energy companies to invest in renewable energy. For example, Italian energy giant Eni plans to develop 1 GW of renewable generating capacity by 2021. The company’s expansions will include 220 MW of solar-power capacity at several of its industrial sites in Italy, a 50 MW wind farm for its Badamsha refinery plant and a 10 MW solar park in Algeria at the Bir Rebaa North oil field.

Eni and Sonatrach inaugurate the 10 MW Bir Rebaa North Photovoltaic Plant in Algeria and sign agreements in the renewable energy sector.

The drivers behind the interest in local energy projects

One feature of renewable energy is its elasticity of scale, ranging from a single rooftop solar panel or wind turbine to large, grid-scale wind farms and solar arrays. An 80 percent fall in the costs of solar power equipment since 2010 and of 25 to 26 percent in wind power equipment has allowed renewable energy to compete with fossil-fuel power generation and made it affordable and potentially profitable for towns, communities and co-operatives of farmers to generate their own power.
Affordability, scalability, financial incentives and specific government policies underpin the growth of local small-scale renewable power generation. For example, Scotland’s Community and Renewable Energy Scheme (CARES), Germany’s Erneuerbare Energien Gesetz (Renewable Energy Act) and Finland’s National Renewable Energy Action Plan (NREAP) are dedicated to helping local communities and businesses to develop or share ownership in local renewable heat and power schemes.
In addition, generous government subsidies in the form of Feed-in Tariffs and payments to power providers in the UK, Germany and Denmark for example, encourage participation from local public and private investors in energy projects. Although subsidies are being phased out in Britain, Germany and Italy, the increasing affordability of small-scale renewable energy generation is likely to ensure its continued spread.

Project successes

In Scotland, CARES has provided expert advice and over $442,505,000 (£351 million) to around 200 local renewable energy projects totaling 678 MW. One beneficiary of CARES support is the village of Fintry, which borrowed approximately $31,607,500 (£24.5 million) to pay for one of 15 turbines in the 37.5 MW Earlsburn wind farm outside Glasgow. Fintry’s turbine earns around $632,150 (£498,000) a year from the electricity its turbine sells to the National Grid.

Australia's largest floating solar farm, East Lismore Sewage Treatment Plant (Ciel & Terre)

To become 100 percent renewable, the Colorado ski-resort town of Aspen set up its own independent power company, Aspen Energy. Residents pay 4.66 percent less than the national average rate of 10.09¢/kWh for their power. Currently Aspen is powered largely by wind and hydroelectricity, plus a portion from solar.
In Australia, the town of Lismore has developed Australia’s largest floating solar farm on the overflow pond of its Sewage Treatment plant. It is Australia’s first community-funded, council-owned solar PV farm, featuring 280 solar modules that are expected to generate 12 percent of the treatment plant’s energy needs. The 100 kW Lismore floating solar installation, along with a 100 kW rooftop solar plant at a local aquatic center, forms part of the Lismore Community Solar initiative for the town to become 100 percent renewable. Local individuals lend money to the council, which repays with interest at a commercial return to the investors.

The NSW Government is supporting innovative early adopters of clean energy with the Clean Energy Knowledge Sharing Initiative.

Likely prospects

The International Renewable Energy Agency report, Renewable Power Generation Costs 2017, estimates that worldwide renewable energy will be cheaper than coal. In countries such as South Africa, Nigeria and Kenya that depend on unreliable and expensive power, or off-grid scattered rural communities, locally generated renewable power could transform the economic and social life of their inhabitants. Indeed, the future seems to replicate the early days of electricity when, before national grids, communities provided their own power plants.

READ MORE: Refugee camps powered by renewable energy by Chris Dalby

about the author
Nicholas Newman
Freelance energy journalist and copywriter who regularly writes for AFRELEC, Economist, Energy World, EER, Petroleum Review, PGJ, E&P, Oil Review Africa, Oil Review Middle East. Shale Gas Guide.