Regional. Central NSW Councils. Energy Plan for. Security

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1 Central NSW Councils Regional Energy Plan for Security 1

2 Resource rich Central New South Wales is a region rich in so many ways: its natural resources and environmental assets attract a diverse mix of industries and allow for business opportunities which support a thriving local community. Central New South Wales Councils (Centroc) represents an area equal in size to Tasmania, with a larger gross domestic product (GDP) but only half the population. Providing high quality and secure water supply to the region is a significant part of the business of our local government water authorities. In November 2008, Centroc embarked upon a study of our region s water supplies to recommend steps toward improved water security for a 50-year horizon through to The study showed that 29 towns required substantial upgrades to deliver water security and made recommendations for how we could achieve those improvements. A delicate balance Management of scarce water resources cannot be examined in isolation, as water has a unique relationship with energy: solutions to secure water supplies often require new infrastructure to be built and more energy to operate the new facilities. In recognition of this, Centroc undertook a second study in concert with the early implementation of the water security recommendations. The Centroc Carbon Plus Study, documented as the Regional Energy Plan for Water Security 2059 and completed in August 2011, provides a sustainable approach to minimising the carbon emissions impact of the water security infrastructure. Armed with this information, Centroc is now continuing its journey to assure water security for present and future generations. Carbon Plus Strategy Finalised Water Security Strategy Finalised Funding Strategy Efficiency Program Phase Commences Continuing our journey The Centroc member Councils are well down the track in the implementation of water conservation and demand management measures, and in the formalisation of local water utility governance activities. Phase 1 Demand Management and Conservation Following the recommendations of the Water Security Study which included retrofit of efficient fixtures, education programs, leakage repair and review of water and sewerage services pricing Centroc has begun the process of developing a regional demand management plan to implement these recommendations. In August 2011, the data collection aspects of this work were completed. The members have also launched the Centroc Water Utilities Alliance (CWUA) to ensure good governance. The Alliance brings together water engineers from the region s local government water authorities to promote collaborative action and knowledge sharing. The CWUA is progressing regionwide compliance with the New South Wales Best Practice Guidelines for Water Supply and Sewerage Services. 2

3 Environmental Approvals, Concept and Detailed Design Central NSW population estimated to top 250,000 Full 50 years of water security realised Funds Secured Infrastructure Delivery Phase Commences Completed To do Phase 2 Additional Infrastructure The Water Security Study called for additional infrastructure in the form of: an augmentation to Lake Rowlands new and upgraded pipelines and minor storage and treatment facilities development of groundwater resources in five local government areas, as well as a pipeline between Orange and the Macquarie River, should emergency water supply situations arise. Funding for the $47 million Orange to Macquarie River pipeline was approved in August 2010, with the federal government providing $20 million; the state government, $18.2 million; and Orange City Council, $8.8 million. While there are considerable consent and consultation elements ahead, detailed technical analysis is proceeding along with a comprehensive environmental assessment. Condobolin Shire also received state and federal funding for the development of groundwater for Lake Cargelligo. Wellington Council has begun planning for emergency supplies for Wellington and Geurie, and is working with Dubbo City Council to consider a pipeline from Burrendong Dam. Centroc is continuing to investigate funding opportunities at the federal, state and local levels to make the other recommendations a reality. An agency stakeholder taskforce recently completed a risk assessment process to determine the next key implementation steps. We firmly believe that water security will serve as a strong foundation a building block, so to speak to ensure the vitality and health of our region. Our region prospers, in part, due to its proximity to the Lachlan and Macquarie river systems, which help supply the water to feed our vibrant landscape, our strong economy and our high quality of life. 3

4 4 The Carbon Plus Study recommended implementation of energy efficiency measures in the design of the water infrastructure, development of a wind farm as a local renewable energy source, and review of the potential of hydro-generation (energy from flowing water).

5 The water-energy nexus The treatment, delivery and heating of water accounts for a significant percentage of global energy use, with water utilities often ranking among the largest energy users in their respective communities. The development of new water infrastructure, as recommended in the Centroc Water Security Study, adds to the energy equation through the construction and operation of significant additional assets. A proper understanding of the relationship between water and energy can result in cost savings and improved resource efficiency. The Carbon Plus project In recognition of the need to be sustainable and minimise the energy impact and carbon emissions of the proposed works, Centroc embarked upon the Carbon Plus Study, which was funded through the Strengthening Basin Communities Program of the Australian Government s Water for the Future initiative. Although energy consumption, and the resulting carbon impact, was considered in the original Water Security Study, the Carbon Plus Study provided a platform for a more comprehensive, in-depth assessment of the energy management needs and potential carbon impact of the recommended additional infrastructure. The study assessed the scale and nature of the emissions problem, and examined opportunities to reduce energy requirements, source electricity from alternative low or no-emission sources, and offset any remaining operational emissions. Each opportunity was assessed against social, economic and environmental criteria and weighed against risk factors to determine which options offered the best value to Centroc. Throughout the project, Centroc consulted with various individuals and groups, including: Mayors and General Managers of local government areas General Managers, Directors and Senior Managers in Engineering Essential Energy (formerly Country Energy) and Bathurst, Orange and Dubbo Sustainability Program staff members from the industrial, environmental and community sectors on a purpose-established Project Reference Group the media and the broader community. Renewable energy options The project examined 35 options, including: wind hydro solar natural gas energy from waste energy from biomass green energy purchase energy efficiency schemes carbon sequestration and offsets. The potential of each opportunity was measured against generation costs, electricity price forecasts, avoided carbon impact and other social, economic and environmental criteria. 5

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7 The Carbon Plus Study illustrated that the proposed Centroc water security infrastructure would deliver significant profits for industry sectors throughout the supply chain, and will generate both direct and indirect employment. It also identified additional carbon emission management actions that will benefit the region. Improving upon business-as-usual The water security infrastructure will help the Centroc region in many ways, including: providing water security for all 29 towns in the region requiring improvement for the next 50 years a 25 percent increase in employment (from 24,000 to 30,000 employment years) against the businessas-usual case a 25 percent increase in family income across the region (from $1.647 billion to $2.063 billion) compared to the business-as-usual case. Implementing the recommendations below will help us to have a real impact on carbon emission reduction. The mitigation outcome will be equivalent to removing approximately 6,000 cars from the road each year for the 50-year planning period. Efficiency measures In addition to the energy efficiency measures previously identified in the Water Security Study, it was recommended that Centroc consider other initiatives to optimise the energy consumption in the construction of water security infrastructure through careful design and technology choices (for example, the use of plastic piping wherever possible to reduce friction). It has been estimated that the identified initiatives could deliver efficiency savings of up to 15 percent over standard equipment design. Several options to improve the efficiency of other Council operations were also identified. These included improvements to street lighting and building efficiency schemes (lighting, heating and ventilation). These improvements have the potential to achieve a 20 to 50 percent saving in energy use at some Council facilities. Regional-scale wind farm Australia has introduced a renewable energy target which calls for 20 percent of the nation s electricity to come from renewable energy sources by Several renewable energy resources already exist within the Centroc region, including three wind farms at various stages of completion. Through our assessment, we determined a wind farm with a capacity of approximately 12,000 kilowatts could provide the required energy for the planned water infrastructure while avoiding additional carbon emissions arising from its operation. It was also identified that an opportunity exists for further wind generation capacity, above and beyond that required for the additional water infrastructure, to provide renewable energy for other Centroc Council activities or to provide energy to the Centroc community. As the renewable energy market is quickly changing, the recommendation will be validated through a market test. Hydro-generation The study identified that potential exists for energy recovery through installation of hydro facilities at several locations on the new water supply network. The viability of hydrogeneration is dependent on specific site characteristics and the study has therefore recommended a review of the hydrogeneration potential at the identified sites be conducted during the detailed design stage. 7

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9 Reaping rewards The science behind the Carbon Plus Study shows us that the recommended actions will make a real difference to the environment, and the analysis indicates that they make sound financial sense. The actions were thoughtfully selected with consideration for how each option would better the lives of those within Central NSW. Important social factors such as employment, income, health and safety, visual impact, leadership and innovation were accounted for in the process. There will be significant lead time and investment associated with implementation, and success will require the support of stakeholders across the region. Centroc s work around water and energy is about so much more than litres and kilowatt hours it is about joining the dots between the environmental, social and economic requirements of our region. An improvement in any one of these areas can have flow-on effects to the others, and a sustainable solution to water supply is likely to draw additional investment in our region and spur economic growth and innovation. Expected benefits of the proposed recommendations are shown on the following pages. 9

10 Expected benefits Water energy efficiency measures Environmental Potential for up to 15 percent energy savings. Social Can generate ongoing savings for water service customers. Economic Measures would be selected to provide a payback period of three years or less, with ongoing cost savings. Hydro-generation Environmental Social Economic Potential to cost-effectively generate up to 8,620 megawatt hours of renewable electricity per annum. Can deliver reduced energy costs and ongoing savings for water service customers. Projects will create local employment for construction and ongoing maintenance. This option was determined to be one of the most affordable solutions. Identified hydro-generation sites will be reviewed during the design stage to confirm economics. Sites selected for hydro-generation will be those where energy generation is shown to be cost effective. Community-owned wind farm Environmental Social Economic Potential to meet all operational energy needs for the water security system from renewable energy. Potential additional source of income for farmers through the leasing of small amounts of land on which turbines are installed. Projects will create local employment for construction, ongoing operation and maintenance. Wind generation was shown to be one of the most economic renewable energy options and the best choice when social, environmental and economic factors were assessed. Reduced exposure to escalating power prices. 10

11 The Next Steps Centroc has a clear plan of action to sustainably secure the water supplies of the region for the next 50 years. The most critical next steps include: 1. completing a business case for the joint water security and energy management infrastructure 2. market testing to confirm wind as the preferred renewable energy technology 3. identifying and building relationships with potential renewable energy and agricultural partners 4. implementing the communications strategy. Water energy efficiency measures In the design of the water security infrastructure, the options below will be analysed and those with a payback period of three years or less will be implemented: optimisation of system hydraulics optimisation of pump station layout use of speed control in place of throttling valves use of three-phase motors (standard practice) coating/trimming of impellors use of plastic pipe, where feasible maximising pipe diameter multiple pumps for varying flows (standard practice) alternation of pumps installation of harmonic filters, where possible optimisation of power factor correction where possible. Hydro-generation Within the proposed water security supply system, there are opportunities to recover energy using hydro-turbines at Lake Rowlands Dam as part of the augmentation, and in the Burrendong-Wellington and Chifley to Bathurst pipelines. The hydro-generation potential at each of these sites (and any additional sites identified) will be assessed during detailed design stages. Community-owned wind farm The implementation plan for the renewable energy procurement option is divided into five phases: 1. Investment decision. In this phase, Centroc will identify the scope of the renewable energy supply and will develop the business case to determine how to proceed. 2. Market testing. Next, we will complete an Expression of Interest process to identify potential partners, confirm wind as the preferred technology and identify potential procurement model(s). 3. Procurement decision. We will assess and select a preferred delivery model in the best interest of the community. 4. Tender. The Request for Proposal process will be used to select a renewable energy supplier. 5. Implementation. Planning and construction of the renewable energy facility will complete the process. The water infrastructure, energy efficiency and hydrogeneration initiatives will be evaluated and implemented as part of the design and construction of the pipelines, pump stations and treatment plant infrastructure, most of which are planned for The wind farm opportunity, however, will follow implementation of the broader Water Security Study program. While there is potential for a significant lead time of two to seven years, implementation of the projects recommended in the Water Security Study and implementation of the Carbon Plus Study can proceed in parallel. Development and implementation of a strong communications strategy is the first step toward assuring the success of these projects. Communication and education, through various channels including documents such as this one will be used to bridge gaps and develop a shared understanding. This communication will be supported with varying degrees of education and capacity building. Centroc remains committed to opening a two-way dialogue with the general public, the Centroc Board, the agricultural sector and other stakeholders. We look forward to working together to realise a bright future for our region. 11

12 Acknowledgements Special thanks to The Australian Government under the Planning Component of the Water for the Future initiative of the Strengthening Basin Communities Program. The Project Reference Group Grant Christopherson, NSW Office of Environment & Heritage Edward Frater, Industry & Investment NSW Diana Kureen, Central West CMA Norman Mann, Community Representative Alvaro Marques, Industry & Investment NSW Meredith McPherson, Regional Development Australia - Central West Stephen Palmer, NSW Office of Water Jana Pickles, Central NSW Tourism Bruce Watson, Kebby & Watson The Project Steering Committee Jenny Bennett Centroc Kent Boyd Parkes Shire Council Chris Dalitz Essential Energy Chris Devitt Orange City Council Russell Deans Bathurst Regional Council Eric Poga Wellington Council Tony Perry Central Tablelands Water Simon Wright Bathurst Orange Dubbo Sustainability Officer Principal Consultants MWH Sub-consultants Dr Christopher Dey, University of Sydney For more information contact: Jenny Bennett Chief Executive Officer Central NSW Councils (Centroc) Note: The technical documents supporting this work are available at the Web address above. Please reference the Centroc Carbon Plus Study housed under the Publications tab. October Backing the region