Wednesday, 16 May 2018

One Step off The Grid/Sophie Vorrath and Giles Parkinson: Mackay council goes solar - and saves big - with city-wide rollout

One Step Off The Grid

Mackay council goes solar – and saves big – with city-wide rollout
By Sophie Vorrath & Giles Parkinson on May 16, 2018
 
Queensland’s Mackay Regional Council has become the latest Australia local government to shift its operations to solar, in a bid to cut its electricity costs and pass millions of dollars of savings on to ratepayers.

The council – in the heart of one of the state’s biggest coal regions – says a tender to install 1.7MW of solar at 21 council facilities – including the main administration building, libraries, depots and water assets – has been awarded to Brisbane-based firm Akcome Power for $2.1 million.

Council said that cost would be offset by $541,890 in small-scale renewable energy certificates, taking the actual price of the project – once other council and contingency costs are included – down to just over $1.97 million.

That is going to provide a significant return for the council, with the investment paid back on average in four years, and total savings on electricity bills over the next 20 years estimated at $16.89 million – even after maintenance and replacement inverters.

It will also include taking one council depot “off-grid” with 40kW of solar and 20kWh of battery storage as a “trial” – although the network connection will stay in place for up to two years “just in case.”

“Council, like households, has been hard hit by rising electricity prices,’’ said Mackay Mayor Greg Williamson in comments on Friday.

“This fairly modest initial outlay is an investment in the future which will provide ongoing cost savings.”

The awarding of the tender came after a bidding process that was narrowed down from 16 applicants to four finalists, and the pricing offered by Akcome stunned its rivals, coming in at more than $1 million below two rivals bids, and $850,000 below the nearest contender.

The other companies were Solgen, Linked Group, and Green Energy Technology. (You can read the tender details and council considerations here from page 244).

“This would have to be a new record for pricing,” said one rival bidder. “Even for megawatt  scale installations I have not seen this.”

The equipment proposed to be used by Akcome includes Huawei and ABB inverters – with 10 year warranties – and unspecified solar panels with 30-year warranties. It is likely that it is the pricing of the solar modules that would be the difference for the China-linked Akcome.

Council said the winning tender had been reviewed by consultancy Peak Services, which reviewed the pricing and the credentials of the winning bidder and declared it to be satisfied.

The council says the decision to go solar will boost the local economy, and generate a number of jobs over the course of the project.

“Akcome has advised it will engage local Clean Energy Council of Australia-accredited electricians, as well as local non-accredited experienced electricians to work with them, plus local trades assistants,” Mayor Williamson said.

“They expect to use 60 to 70 per cent Mackay-area based tradespeople to complete the installation.”

Council noted that it had initially investigated investing in large-scale renewable energy projects through an expression of interest (EOI) process, but found they were “not financially viable at this time.”

This graph above shows the anticipated return on one of the facilities, on Civic Centre, which will install 100kW of rooftop solar for $93,000, delivering net savings of $854,000 over 20 years.

As we have reported on One Step, local governments around Australia have in many cases taken the lead on installing renewable energy resources, with a growing number of councils turning to solar, in particular, to cut their costs and in turn cut costs for ratepayers.




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