100% Renewable Electricity in the ACT Investment and Innovation Megan Ward Environment, Planning and Sustainable Development Directorate

Overview Background Achieving 100% Renewable Electricity 2 Achieving 100% Renewable Electricity 3 Local investment & the future

ACT Climate Change Targets 2020 40% reduction in greenhouse gas emissions on 1990 levels 100% Renewable Electricity 2050 Zero net emissions AP2 considered GHG mitigation opportunities—focusing on energy efficiency improvements, as well as significant investments in renewables. A 100% RET by 2020 is around 640MW of Large-scale capacity 100% Target is delivering bulk of our 2020 GHG target. Talk about transport and gas transitions as appropriate

Renewable energy policy objectives Reduce greenhouse gas emissions Invest in large-scale renewables Reduce barriers to solar and battery storage CBR as a national energy innovation hub New research collaborations Support start-ups and business innovation Trades training development Demonstrate emerging technology Being 100% renewable isn’t the end of the story. It is about establishing Canberra as an export oriented hub for innovation in renewables and supporting technologies. The proponents of our large scale a uctions are supporting other exciting projects (local investment is 20% of proponent’s score)

How? Allows Minister to grant Feed-in Tariffs to large-scale renewable energy generators Total cap of 650MW Cost recovery through Distributor Projects can be located anywhere in the NEM Non-ACR projects must offer exceptional economic benefits and minimise cost to ACT electricity consumers

Renewables investment program 2012 2013 2014 2015 2016 2017 2018 2019 2020 40% 60% 100% 20MW Solar Auction (Fast Track) 200MW Wind Auction II 200MW Wind Auction Auctions deliver 75% of 100% renewables target 20MW Solar Auction (Regular Stream) 200MW Next Gen Renewables Auction 1MW Community Solar Large scale auctions deliver 75% of 100% target. The other 25% is rooftop solar, greenpower and our share of national renewable energy target. - i.e. renewables we are financially responsible for. Next Gen Solar EOI

Auctions Proposal evaluation criteria Weighting Risks to timely project completion 50% Local community engagement 20% ACT economic development benefits Reliance on feed-in tariff compensation mechanism 10% Best practice approach for wind: key selection criteria in competitive Auction process Positive outcomes to-date Co-investment options in two wind farms 19.4MW Coonooer Bridge 100MW Sapphire Wind Farm

7 Wind Projects (5 Wind Farms) 3 Large-scale Solar Farms

Record breaking prices achieved ACTUAL PRICES $150AUD/MWh (Real) $73AUD/MWh (Real) $63AUD/MWh (Real) Analysis has been undertaken

Contract for difference payments Example: FiT payments in Victoria (1/7/2016) Payments by generators Spot price $/MWh FiT price Payments to generators The slide uses an example of an $81.50/MWh FiT (the black line) which is around what many of our wind generators are paid This uses actual market data for a day in Victoria earlier this year (where our Coonooer Bridge and Ararat Wind Farms are located) The ‘contract for difference’ approach means that the generator is guaranteed to be paid exactly that FiT amount for the electricity they generate (by ActewAGL Distribution, no matter where the generator is located) Long run merchant risk (wholesale market risk) is effectively transferred from the developer to ACT electricity consumers However, this acts as a partial hedge against the risk already carried by consumers as reflected in the latest AEMC price trends forecast: CFD mitigated about 30% of Hazlewood price impact for ACT consumers in 2017-18 Overtime, most market models predict net payments to the ACT from renewables generator Key uncertainty is wind weighted pricing in SA, VIC and NSW

Renewable energy policy objectives Reduce greenhouse gas emissions Invest in large-scale renewables Reduce barriers to solar and battery storage CBR as a national energy innovation hub New research collaborations Support start-ups and business innovation Trades training development Demonstrate emerging technology Being 100% renewable isn’t the end of the story. It is about establishing Canberra as an export oriented hub for innovation in renewables and supporting technologies. The proponents of our large scale a uctions are supporting other exciting projects (local investment is 20% of proponent’s score)

Key issues for electricity policy Generation mix in 6 electricity markets Key issues for electricity policy High emissions intensity grid High electricity prices Weak interconnection between some regions (security concerns) Strong consumer interest in solar and battery storage Rooftop solar penetration

ACT’s key capability areas Renewable energy asset management and project development (Windlab, Neoen, CWP, Union Fenosa, Maoneng) Wind, solar and pump-hydro resource analysis Policy and project integration (Reverse auction, energy markets, metering and tariff reforms, consumer protection) Energy storage testing and integration (ITP, Reposit, Solarhub, Panasonic, ActewAGL, deX, microgrids, hydrogen production and storage)

Value proposition of various scales of energy storage Next generation energy storage program Subsiding 5000 ‘behind the meter battery systems’ by 2020 in Canberra homes and business World’s biggest public data set on battery performance Value proposition of various scales of energy storage Power $25 million in funding 5000+ homes 36MW Competitive grants Focus on ‘ sustained peak output’ Industry development Data capture for R&D We will feed into the process of informing smart markets & new IP development opportunities Frequency Voltage

New battery storage integration program Power system and market design Partnership between ACT Government and the Australian National University $8M over 5 years to establish global research leadership capability Integrated program covering power system to diagnostics and materials chemistry Focus on applied research partnerships with ACT business and corporate community Research leader currently being recruited Linking Australian and global storage research capability Device diagnostics and marketing Device controls Materials chemistry

Hydrogen Winners of latest 200MW auction investing in: Production of hydrogen from renewable electricity Hydrogen mobility Car, Refuelling & servicing Research & development Electricity grid support Reducing gas network emissions Hydrogen may also play an important role in energy storage for electric vehicles and grid support into the future. Industry driven.

deX project Global proof of concept experiment Open standards-based network support trading market (peak demand reduction, voltage support) Competitive and fair transactions of DER values Complements wholesale energy trading More value for customers Higher penetrations of solar and storage

1,100m2 collaborative working space Launched in November 2016 1,100m2 collaborative working space 18 member organisations so far (start-ups, SMEs, consultants, researchers, industry groups) Networking opportunities Events (e.g. national hydrogen workshop) Support services for businesses Easy access to Australian Government and Universities 2 x Funding Schemes Demonstration and scale-up of new technologies and ventures REIF Direct Grants: >$30,000 Innovation Connect: <$30,000

Questions?

Community Solar 1MW FiT of $200/MWh (Solar Auction bench mark) Two open rounds Now working with SolarShare Key issues: Development experience Financial backing/structure Risks to household investors

FiT auction Summary FiT is firm, fixed and flat over 20 years on a $/MWh basis Paid by ACT electricity distributor (ActewAGL Distribution) Eligible electricity is the lesser of actual generation or LGC creation FiT is ‘contract for difference’ (paid based on FiT value less the 30 min settlement value of electricity in the relevant NEM spot market) Local community engagement and local investment requirements Go through slide

Successful Storage Providers ActewAGL Retail Energy Matters EPC Solar Evergen ITP Renewables Origin Energy Power Saving Centre SolarHub ActewAGL Retail Energy Matters – Simon Chau, James Grant EPC Solar – Daryn Stocks Evergen IT Power – Susan Dedman, Oliver Woldring, Simon, Jonathan Origin Energy Power Saving Centre SolarHub – Ben

Next Gen Storage Initiative Canberra Urban Solar Project (2013) Next Generation Solar EOI (July 2015) Next Gen Pilot (April 2016) Next Gen Program (September 2016 +)

Early outcomes 200+ systems sold 100+ installed & inspected 700kW peak sustained output Average Peak Sustained Output 3.6kW Approx 16% are solar retrofits Limitations on premium FiT customers Need to create open markets for network support/ancillary services Frydenberg est yesterday: 500 in 2015 5,000 in 2016 Knowns: 74 new systems 15 retrofits

Next Generation Solar Responses

Wind rebid FiT prices Prices converted to AU$ REAL at 2.5% This chart includes only the wind projects that were rebid between the first and final auctions.

Wind Auction FiT price range and median FiT prices Prices converted to REAL AU$ at 2.5%

Solar Auction FiT price range and median FiT prices Prices converted to REAL AU$ at 2.5%

Solar Auction – price expectations vs. outcomes ACT LS-Solar FiT equivalent Yr 1 rate in $2012 indexed to CPI

Wind auction – price expectations vs. outcomes ACT LS-Wind FiT equivalent Yr 1 rate in $2015 indexed to CPI

Difference between CC or not

Difference between FiT bid and market offers