Affordable, sustainable energy for all – transforming electricity supply in Australia and Indonesia

The Energy Cluster set out to explore ways to improve access to affordable, reliable energy that transforms communities. For most Australians and Indonesians, that energy still comes from national grids. But about 67 million Indonesians – almost a third of the country’s population – are not on the grid. They either rely on expensive, non-renewable sources of power – often diesel – or they have no access to power at all. That poses a critical challenge for sustainable development in Indonesia. To meet the Indonesian government’s goal of 90 per cent electricity coverage by 2020, generation must grow by nine per cent a year.

Australia also has many remote Indigenous, island and mining communities that rely predominantly on electricity generated from expensive and polluting diesel. On top of that, the concept of the energy grid is changing. For example, some new Australian suburbs may be going ‘off the grid’. Such suburbs could use renewables such as solar and wind, supported by battery storage and gas, to create microgrids that essentially run independently of the national electricity grid.

The best ways to transform energy supply in the two countries may not be simple. In communities not yet reliably connected to the grid, there is now the opportunity to leapfrog into the ‘future grid’ by tailoring development to suit local requirements. Both countries have also large reserves of coal, natural gas and other fossil fuels but have committed to ‘decarbonising’ the energy system.

The aim of this cluster was to develop local solutions by assessing, modelling and trialling microgrids, and explore national scale strategy by modelling the deployment of microgrids, assessing future technology options, and identifying the policy and regulatory frameworks needed.

Specific themes were: 

• Microgrids and remote area networks. This focused on technical and economic assessment of decentralised electricity provision options, configured as microgrids with substantial levels of renewable sources and energy storage. Covering both off-grid and grid-connected microgrids, this work is important to both Australia and Indonesia. In Indonesia, microgrids are being considered as a key solution for remote area and island electrification, while in Australia microgrids are being considered for development both within cities, as a cost mitigation mechanism, and in remote communities to provide an affordable alternative to diesel generation. The theme focused on better ways of designing microgrids to integrate new technologies, such as solar PV, batteries, and smart grids, with existing small-scale technologies such as biomass and micro-hydro. 
• Energy system transformation pathways. This investigated the development of centralised electricity provision, including the trade-offs with microgrids. The aim was to create a model that can map out the energy future at a system level, informing decisions by investors, policy makers and the community on the best strategies for achieving an economically optimal mix of technologies. 
• Technology assessment. The decisions, models and designs developed in the first two themes are critically dependent on the characteristics of new technologies. Particularly important variables include cost, ease of integration, and deployment times. Additionally, energy feedstocks or energy resource availabilities are often geographically diverse, and capital costs will decline significantly over time for newer technologies. Understanding and modelling how the characteristics of new technologies may change is a relatively new field of study, as is the use of models for making investment decisions. A rigorous treatment and enhancement of these methods is fundamental to developing confidence in investment models.