BRIEFING PAPER: GROWING QUEENSLAND COMMUNITY ENERGY

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1 BRIEFING PAPER: GROWING QUEENSLAND COMMUNITY ENERGY INTRODUCTION Community energy groups in Queensland have developed this briefing paper with support from the Community Power Agency. The briefing paper provides a status update of community energy in Queensland and proposes a series of mechanisms to unlock community energy projects in Queensland in the short term and policies to grow the broader community energy sector in the medium term. Specifically, Queensland community energy groups urge the State Government to support the development of community energy by providing funding to a. develop the sector support systems needed to fast track existing community energy projects; and b. establish a Queensland Community Energy Grant Funding Programme, similar to that in NSW and being considered by the newly elected Victorian Labor Government. These initiatives and supporting policy mechanisms as detailed in this paper would provide an effective and cost- efficient pathway to stimulate community energy and place community- based clean energy at the centre of the proposed Queensland Renewable Energy Target. COMMUNITY ENERGY Community energy refers to renewable energy projects that involve significant levels of community participation and/or ownership. It is an approach that requires relatively small investment but delivers impressive outcomes through the mobilisation of volunteer effort, local economic development and community investment. It is the community who initiate, develop, operate, own and benefit from the project. Collectively community energy can include energy generation, efficiency, conservation and management projects and includes Community- Owed Renewable Energy (CORE) projects. To date, the nascent and growing Australian community energy sector has: Contributed over A$23m in community funding for energy infrastructure Installed over 9MW of renewable energy systems Produced over 50,000 MWh of clean energy (as of the end of 2014) Avoided over 43,000 tonnes in carbon emissions Developed a membership and supporter base of over 21,000 people (not including the support base of organisations like ATA, Embark and Community Power Agency that support community energy groups).

2 COMMUNITY ENERGY IN QUEENSLAND Community energy projects offer a range of benefits including: Engaging and educating the community about renewable energy and energy efficiency; Enabling renters and apartment dwellers to invest in and benefit from renewable energy; and Providing strong regional, economic, environmental and social development benefits, including reducing greenhouse gas emissions and increasing community resilience. There are over 60 groups developing community energy in Australia; at least 7 of these are in Queensland. Currently, Queensland groups are predominately investigating community solar. Energetic Communities, for example is looking at solar for a residential apartment block and on a food manufacturing site, Sunshine Coast Community Solar are looking at several sites and a Cairns based group is looking at new grids and solar. Several significant barriers, in particular the lack of early stage funding, currently stall their progress. Community energy groups in NSW do not face these barriers. The more progressed of the Queensland community energy groups are currently establishing legal & governance structures, developing business models, engaging potential site owners and attempting to secure small amounts of funding. EXISTING QUEENSLAND GOVERNMENT POLICY Community energy is very much aligned with the direction of the 2015 Queensland ALP policy platform A Solar Future: Powering Queensland s Renewable Energy Industries. The Platform commits the Government to a 40- megawatt renewable energy auction and Commencing a renewable energy study for the Sunshine State to investigate policy measures to support the creation of an export orientated renewable energy economy. The Platform also states The best outcomes for Queensland s communities can only be achieved by providing them with direct input into their power generation and distribution needs. Despite the protracted uncertainty surrounding the National Renewable Energy Target, the Australian community energy movement has been gathering pace and the majority of community energy projects under development are under 100kW, and hence eligible for funds through the Small- scale Renewable Energy Scheme (SRES). Supporting these projects provides the Queensland Government with another opportunity to support and increase Queensland's share of renewable energy even in this broadly uncertain environment. In Victoria, the Labor Government has lent its support to groups in Woodend and Newstead for community energy projects, and has shown strong leadership in seeking to re- establish a Victorian Renewable Energy Target (VRET). The Queensland Government is positioning itself into a similar position. Community- owned renewable energy is one vehicle to help the Queensland Government achieve its 50% Renewable Energy by 2030 target.

3 UNLOCKING COMMUNITY ENERGY IN QUEENSLAND With some simple initiatives, the Queensland government has the opportunity to unlock community energy projects. These are: 1. Establish a Queensland Community Energy Fund; and 2. Institute other supporting policies such as a community band as targeting CRE as part of the reverse auctions, and assistance making public buildings available to be host sites for community- led solar projects We believe that enacting these two measures above this financial year will give community energy projects the support they need to succeed and see the first community energy projects established in Queensland. Establish a Queensland Community Energy Grant Fund1 1. Establish a $ Queensland Community Energy Fund. 2. Provide seed funding for Queensland Community Energy Pilot Projects. As a result of strong bi- partisan support for community energy in NSW, a number of community energy projects have been implemented, with many more in the pipeline, and a strong and growing community energy sector is currently leading the way for community renewable energy in Australia. A Queensland Community Energy Fund will stimulate market development and capacity building through allowing community energy groups to complete pre- feasibility studies, engage legal advice to develop effective business and finance models, raise community awareness and address community energy barriers. Groups can undertake the work collaboratively to reduce unnecessary duplication. Queensland community energy groups propose that establishing such a grant- funding program would support the development & establishment of the community energy sector, similar to the experience in NSW and Victoria2. This fund would compliment the State Government s election commitment of a 40- megawatt renewable energy auction to support private investment and jobs. The current NSW government has twice established funding programs ($411,000 and $846,000 each) for community energy totalling over $1.25 million in investment in the sector over the past three years. NSW community energy groups can currently apply for up to $50,000 for the early development phase (i.e. social feasibility, technical feasibility and planning). NSW Labor also expanded its own community energy policy platform for the 2015 NSW State election and committed to a greatly expanded grant funding programme (including grants of up to $500,000 for 1 It should be noted that the national coordinating body for community energy, the Coalition for Community Energy (C4CE) and Community Power Agency have in conjunction developed detailed briefing papers and background research on both a community energy fund and reverse auctions and how they support community energy. These briefing papers are available on request 2 See Appendix F of National Community Energy Strategy for further evidence. The most important factor in reducing the costs of a model was found to be successful replication.

4 community energy projects), to support a broader, community- focused, decentralised energy system.3 Seed funding for pilot projects will allow Queensland community energy groups to investigate legal issues, building on the work of similar groups in other states and for a Queensland Community Energy Toolkit to be developed (toolkits relevant to other states already exist that can be built on). The Victorian government, for example, through its Renewable Energy Support Fund and Regional Infrastructure Development Fund provided $1.7 million to Hepburn Community Wind Farm (4MW). As solar projects, Queensland community energy groups are looking for a much lower amount of $ to $ for individual groups. Additional support policies Queensland community energy groups strongly support the current review of the future of the renewable energy industry in Queensland, and the establishment of a Queensland Renewable Energy Target. We would welcome the opportunity for involvement in the development of Queensland s Renewable Energy Policies, Plans and Programs. Action 12 of the NSW Renewable Energy Action Plan (REAP), for example, states that the NSW Government will facilitate community ownership of renewable energy projects, recognising that community renewable energy projects provide a range of social, environmental and financial benefits to local communities. Queensland community energy groups would see a similar action in the Queensland Labor Government s renewable energy target as an effective way to grow the sector and broader social licence for renewable energy in Queensland. There are a number of supporting policies that we believe should be considered to secure the long- term viability of the community energy sector in our State. The following are examples of innovative approaches that could be utilised to stimulate Queensland community energy: Reverse Auctions have recently been adopted in the ACT. These are likely to be best for community energy projects larger than 100kW or aggregations of multiple smaller community energy projects and can be tailored to the policy impact priorities of the Queensland government. NSW Labor has also recently announced it is investigating the Reverse Auction mechanism as a way of driving down the cost of renewable energy.4 For smaller community- owned solar systems, a Community Feed- in- Tariff (CFiT) should also be considered. Many of the countries around the world that have strong community energy sectors have introduced some form of CFiT (particularly Germany, the UK, and many provinces in Canada). Community energy projects under 100kW offer a wide range of social, economic and environmental benefits, often in an urban setting. The challenging nature of the business environment requires that some structural support be provided for such systems so that these benefits can be reaped for the greater good of the state of Queensland. Assistance making public buildings available to be host sites for community- led and funded solar projects. The potential for public buildings local to community solar projects to be involved in 3 NSW Labor Labor s Plan for Our Environment, 2015: pp.21-24, 4 Ibid, p.24.

5 these iconic projects is significant and remains one of the untapped opportunities of the clean energy movement. Recent changes that have increased the fixed tariff, such as Tariff 44, are a barrier to many small businesses, individuals and community energy groups. These sorts of policies make renewable energy (and efficiency) projects less cost effective, and often reflect poorly on policy makers as they to stifle the industry. The outcome is that the economic advantage of solar is reduced, as is the motivation for energy efficiency. Community energy projects are often in the kW range (especially with the recently reduced RET and it s ongoing review process making larger scale more risky). However, Energex and Ergon often restrict solar to 30kW or less via no- export conditions. As such, connection agreements are often not forthcoming, or much generation is lost, making larger projects uneconomical. Access to the distribution network for these size systems is a consistent barrier. CONCLUSION The Queensland State Government is in a good position to act to support the development of community energy projects by providing funding that would help Queensland community energy groups to bring their projects to implementation. The process has worked well in New South Wales and can be easily replicated in Queensland. Should the Queensland Government decide to take a lead on community energy, the Queensland community energy sector is well placed to deliver strong economic, social and environmental benefits for the state. MORE INFORMATION For more information please contact: Luke Reade, Energetic Communities. M: / E: energeticcommunities@gmail.com Manny Pasqualini, Community Power Agency. M: / E: manny@cpagency.org.au