Australian microgrids: Navigating complexity in the regional energy transition

Visible impacts of a changing climate across the nation, spiralling energy prices, and international political pressure have prompted a renewed focus by State and Federal Governments on the decarbonisation of the Australian economy, bringing vigour and momentum to the country's renewable energy transition. This potential reallocation of energy resources away from a centralised model of generation to a more distributed approach has increased the interest in local energy solutions, bolstered by continuing reductions in the cost of renewable energy and the proliferation of distributed energy resources. Microgrids and standalone power systems in particular are attracting attention from regional and remote communities as a potential solution to their woes of energy insecurity and unreliability.Using the lens of strategic niche management and viewing each initiative as a protected space of innovation, this research analyses the feasibility studies of 20 microgrid projects across regional and remote Australia funded by the Federal Government's Regional and Remote Communities Reliability Fund (RRCRF). This funding supported feasibility studies investigating microgrid technologies to replace, upgrade or supplement existing electricity supply arrangements in off-grid and fringe-of-grid communities in regional and remote areas. Using semi-structured interviews with a range of key stakeholders, this research explored key characteristics of these projects encompassing drivers, stakeholder engagement, ownership, and business models. Our previous work identified the complexity that these attributes together presented as an important barrier in the development of local grids. Additionally, this research explores other key barriers and opportunities confronting the projects.The findings confirm that the development of microgrids in Australia remains nascent, with projects in differing locations grappling with similar opportunities and barriers. Ownership and business models continue to evolve, complicated by legacy regulation and entrenched market players within and between the states and territories. Technology appears to be an enabler rather than an obstacle, while social and cultural drivers often take precedence over economic and environmental issues, particularly in remote areas where energy security can be an enabler of improved health outcomes and increased community engagement.While highlighting areas for future research, the article makes some key recommendations. These include the extension of financial support beyond current funding timescales to bring projects to fruition; the enhancement of knowledge sharing between early-stage projects to accelerate project development and increase impact; and the removal of regulatory barriers to encourage and enable distributed network service providers to support the development of microgrid systems.The research suggests that much work remains to be undertaken in the regulatory, financial, and governance realms if the benefits of microgrids are to be fully realised for all stakeholders. The role of government remains critical in providing early-stage support for innovation, development, and implementation of microgrids through funding, policy, and regulatory change, and facilitating knowledge exchanges. In addition, a key problem to be tackled is the need for a regulatory framework to permit microgrids to fit more easily within the national energy market (NEM).