ENERGY722 | Energy Technology | International Energy Policy

Introduction

The use of renewable sources is becoming challenging for the society as the natural resources are limited and the users as population is increasing day by day. In relation to this, an energy policy of for electricity consumption is evaluated and proposed for Western Australia’s remote area as these areas are facing the challenges while consuming the traditional or non- renewable sources of energy. Literature review is undertaken for defining the problem at local level. Along with this, an evaluation criterion is also assessed in order to review the energy policy as integration and implementation level. The energy evaluation is carried out with respect to the financial ability, government resources and interest, political challenges, energy policy and environmental strategies. In addition to this, the alternative energy policies are also described with respect to its reliability and consumption efficiencies. The energy policy is also assessed with respect to the methods of evaluation as cost- benefit analysis, multi criteria decision method and the combination of these analytical methods. The alternative policy is also summarized in precise manner so that it can be understood by the stakeholders with concern to determining the challenges and opportunities. Moreover, a plan is also developed for the monitoring and evaluating to devised alternative policy for the remote areas of Western Australia in order to fulfill the need of energy.                  

a) Literature review

In the words of Hassan, Humayun, Ullah, Liu  and Fang, (2017), the electricity has become an essential need for the society and it is necessary for daily life activities so the government is also taking actions in order to fulfill the need of people over the time. In Australia, the remote areas are facing the challenge while using the renewable or traditional methods for the energy consumption. In addition to this, the population of Australia is increasing as it is recorded as 24.77 million in the year 2018 and it is growing with the 1.30% rate of increasing. In addition to this, Che, Zhang, Shahidehpour, Alabdulwahab and Abusorrah, (2017) Australian government is also focused on developing the renewable resources in order to strengthen the energy sector for not to depend on other sources. Over the research, it is determined that Australia uses only 6% of its non-renewable or traditional source energy to consume for domestic use. In relation to this, it is also assessed that Australian people are using the 14% of its renewable energy only. Moreover, Australian government is also concerned towards the development and carrying out the policy as Australia has developed the National Energy Guarantee policy in the year 2017, which deals with the prices and consumption of energy in Australian market (Originenergy, 2015). At the same time, Australia’s major part of energy is generated from the traditional sources through fossil fuels. As it generates 73% of the energy is produced from the coal and 13% from the natural gas.

Apart from this, Gov, (2018), endowed that Australian market has significant opportunities for the establishment of micro –grid system in order to effectively produce and distribute the energy in the remote areas of societies to provide them sources. It is also reviewed that the traditional systems are insufficient to produce the required rate of energy so that Australian remote areas can easily be served. The remote areas of Western Australia are facing the challenges for having the sufficient system to generate, store and regulate the energy in sufficient manner. Li, Wang, and Xiao, (2018) assessed that the micro grid is the system which is determined as flexible solution for the renewable energy integration for different sources. The business model of micro grids is continuously evolving and it has been moved from laboratory to community deployment so that the problems of community can be resolved. It is a new technological improvement of electronic system which is used for the several energy methods of integration as solar, wind and hybrid system that is also reliable and resilience to reduce the fossil fuel emissions. Business, (2018), reviewed that this system is also valuable for the areas where the centralized system of energy is not enough to provide the electrical infrastructure than this technological system is effective to develop for arrangements of electricity. In addition to this research, it is also identified that that the major sources of energy generation in Australia are as hydro power, wind power, solar photovoltaic, solar thermal energy, wave power and bio- energy for the society. With respect to the economic perspectives, Australia is producing the 10% of its black coal and the 88% of its used for the national energy purpose. On the other hand, Science, (2015), it is also determined that 87% of its total coal production, is exported which is a significant source of income and it is also expected that the Austria can produce for 125 years at the current rates. Moreover, it is also researched that Australia is earning the $30 billion annually from exporting the energy source in the international market.

On the other hand, it has become challenging for the government of Australia to supply the sources of energy as the cost of energy sources have been increased. Along with this, the transportation is also an issue as the price of oil and petrol is also increasing and the seasonal transportation is also critical for the government. On the other hand, Shi, Chu and Gadh, (2017) perceived that establishing of gas pipelines is also costly to set up in the remote areas of Western Australia. With respect to this, Rashid, (2017), it is also endowed that the CO2 is also an environmental issue for the energy sector to minimize the risk of environment pollution and produce the reliable and efficient energy. 

b) Evaluation criteria for energy policy in remote area of Western Australia

In order to minimize the problem of energy distribution in Western Australia remote areas, as it is the standalone system for employing the technology and generate and distribute in reliable manner. At the same time, the problem of energy consumption in the remote areas of Western Australia, the second step of Patton and Sawicki’s six step model, evaluation criteria is useful for assessment. Under the international energy policy, the objectives of policy development are clear as it requires developing the renewable micro grid standalone system so that the public issues can be resolved in significant manner. In order to evaluate the alternative policy the major criteria are essential as

Effectiveness: The effectiveness of alternative policy is significant as there are several options and opportunities are available such as wind energy, solar energy, hydropower energy, thermal power and bio mass (Manasseh, McInnes and Hemer, 2017). But the policy should be measured in successive directs and targets for the policy. In context to this, Australia is using several energies as

(Source: Laslett, Carter, Creagh and Jennings, 2017)

Over effectiveness, it is determined that the major sources of energy are traditional and in relation to the renewable source, hydropower is one of the highest percentages as 7% for generating the renewable energy (Shezan, Das and Mahmudul, 2017). In addition to this, the wind, rooftop and bio-energy are also contributing towards the energy generation as 4%, 2% and 1% respectively. In relation to this, the hydropower or hydro electronic is a valuable renewable source of energy and it is effective as it can be used through water to produce the energy for the public utility. Australia is strong in context of manufacturing sector as it is one of the most sectors which consume the both electricity and gases. The households are behind this and transport consumes the 15% and mining as 13% so it is effective to develop as the micro grids in the remote areas of Australia (Stock, Bourne, and Hussey, 2017).

Efficiency: The efficiency is another criterion for the determination of utility about the energy policy in the remote locations of Western Australia. The efficiency is measured in terms of economic aspects as it is delivered in renewable energy or it might influence the social costs (Jacobson, et al., 2017). As per the analysis of evaluation criteria, the cost is a major factor that is considered as most of them to develop and implement the policy in efficient manner. In other words, the policy should be measured in terms of financial stability that can be supportive to review the actions of government for access the policy in better manner. In addition to this, the efficiency can also be assessed in context of potential profit and benefits aspects. In addition to energy policy development, the consumer cost indicator is also a factor that should be evaluated in reasonable manner because the end user is customer not the developer of energy (Irena, 2014). On the other hand, the cost consideration can also be measured if the innovative technologies are employed in the renewable energy management.                                       

Equity: The equity consideration is also a contributor in the policy development, as it is concerned to the distribution of the policy impact. In relation to this, the changes in energy consumption can also be considered as significant factor for assessing the absolute value and the usefulness of energy in reliable manner (Breyer, et al., 2017). The targeting population and the subsidies can also be taken as measurable factor for the energy policy. At the same time, energy access matrix can also be employed as the indicator for consumer impact with respect to the electricity consumption and household connections in the perspective geographical areas. Rather than the distribution cost, the benefits of shareholders can also be taken into consideration as the cost can be reduced and the equity value can be improved (Prasad, Taylor and Kay, 2017).                             

Institutional feasibility: In relation to this, the institutional feasibility is supportive to determine the political aspects that can affect the policy in adverse manner. At the same time, the political environment is a major factor that can affect the policy implementation of energy policy in negative and positive both manners. If the institutions of government are not feasible then it might not be possible for implementing and establishing the energy policy in desirable manner (Hirsch, Parang and Guerrero, 2018). On the other hand, if the policy is not designed with the determination of political intervention then it might not lead to employ successfully. But the institutional policy is difficult to measure as it needs the matrices and tends should be qualitative. In context to the institutional feasibility, it is also included as sufficient skilled staff and the responsibilities should also be assigned in proper manner. Furthermore, the implementation and monitoring should also be considered to review the policy in resilient manner.

c) Identification of alternative policy options for energy policy development

There are many options for the development of international energy policy as the government of Australia is also taking initiative for employing the policy in order to strengthen the energy power distribution through micro grid standalone system for remote areas of Western Australia. In Australia, the major alternatives are as

Solar micro- grid: Australian societies are using only the 14% of total renewable energy; rest is generated from the traditional as coal energy. As the solar energy policy can be developed by Australian energy institutions in order to fulfill the demand of Western Australia’s remote locations. The solar energy is generated from light and heat of sun which is a natural resource. The solar energy is generated and this energy is transmitted into the electricity (Originenergy, 2015). In addition to this, Australia possesses the highest solar radiation over the globe which is also higher from any continent. Furthermore, it is also researched that around 2 million people are using the solar system on their roof top for energy. So it is a better alternative for Western Australia.         

Wind energy micro -grid: In addition to this, the wind energy is also a valuable source of renewable energy as this type of energy is produced from the wind with the development of turbine and the energy is converted into the electricity. It is opportunistic for Australia due to having viable on-shore wind resources and it is consumed around 4.9% in terms of total energy consumption (Gov, 2018).     

Hydropower energy micro grid: To generate the energy from hydropower source, it is better for Australia as it has developed the 100 operating hydropower plant in its domestic location so that it might also be opportunistic for the country to develop the policy in significant manner (Irena, 2014).

Hybrid energy power station: It is also analyzed that Australian government can also develop the combination of its policies of renewable sources as mixing the wind, solar and hybrid so the energy can be transmitted and distributed in efficient manner.

d) Evaluation of the proposed policy options

In order to evaluate the policy for considering micro-grids based on renewable energy, different methods can be used. Two of the methods are discussed below:

Cost-benefit analysis

Cost analysis is a technique through which the soundness of a decision or an investment can be determined (Dunn, 2015).

The benefits of using renewable sources based micro-grids in the Western Australia (WA) are as follows:

Reduced costs of Network: In the setup of micro-grid the electricity sources are much closer unlike traditional setup. Therefore, the networking and electricity costs will be very less even if the micro-grid works at full capacity.

Establishment of communities which are independent of energy: The people of WA will be able to create and consume their own energy which will reduce their reliability on electricity retailers. In this way, the people of WA community will be able to control the costs of services for electrification through micro-grids based on renewable sources.

Increment in the value from the management of demand side: The demand side of the management is suited well due to the local control on micro-grids. The micro-grids will respond to the instructions of Wholesale Electricity Market for reducing the net consumption so that main network of electricity can be supported (Siano, 2014).

Increased stability of system: The distributed generations will be incentivized through the micro-grids. This provides greater security to the system and significant generation outage risk is also lowered. The sources of generation will be located differently through which the system will be protected from the variations in the availability of generation.

Qualitative analysis

In qualitative analysis non-quantifiable methods are used for evaluation of any business opportunity or making any decisions (Frow, Nenonen, Payne, and Storback, 2015). According to Perth Energy, micro-grids can prove to be the potential game changers in the energy sector of WA. There is a likeliness of improving security of energy, sustainability and supply reliability which will result in lowering the long-term cost of energy for the western Australians. The micro-grids are scalable and practical solution which has relatively lower cost of implementation as compared to the ongoing need of investment in costly network of transmission with the changing need of energy of the population of WA (Moner-Girona, Solano-Peralta, Lazopoulou, Ackom, Vallve, and Szabo, 2018). The micro-grids benefits can be realized fully if they are delivered by the privately owned participants in the market by whom the micro-grids can be build and operated. This way, the private sector will bear the debt financing and commercial risk associated with the implementation of micro-grids. The burden of debt on Western Australian State Government will be reduced. The implementation of renewable resources based micro-grids in the Western Australia for electrification will also promote refinement and development of technology because the supplier will attempt to create and differentiate the market share (Feron, 2016). This way the change pace will be accelerated and will lead to solutions which are more efficient. WA has great sources of renewable energy which includes solar as well as wind resources. This will allow optimization of cost in regard to the system of storing energy. Electricity will be supplied to WA with the help of micro-grids using renewable resources of energy. It is also realized that with the improvement in the technology, a central role will be played by micro-grids in generating power in the remote areas (Koirala, Koliou, Friege, Hakvoort, and Herder, 2016).

This policy will potentially transform the existence of remote communities in the Western Australia. In the coming future, a combination of energy storage, renewable sources, and micro-grids will be utilized by the Horizon Power and Western Power who builds, operates, and maintains the network of electricity in the remote areas of Western Australia. This way the reliability will be improved and the cost of supplying power will also be reduced. The remote communities will be benefited with the access to electricity which will improve the living standard of the individuals and business will also grow in WA (Byrnes, Brown, Wagner, and Foster, 2016).

e) Summary of alternative option

The alternative options of renewable sources for micro-grids include solar energy, wind energy, and biomass. The opportunities and challenges of each source are summarized below:

Solar energy

Solar PV systems are a great source for providing electricity to remote areas of WA. There are great opportunities of installing solar micro-grids which are as follows:

Opportunities

• There is a great availability of sunlight in the Western Australia which will support the solar micro-grids (Fornarelli, Shahnia, Anda, Bahri, and Ho, 2018).

• Less maintenance and operation cost for keeping the system running for a longer period of time.

• Availability of land for installing the setup of solar micro-grids.

• It is a cleaner source of alternative

• Easy installation and having their own capacity of generation.

Challenges

• The solar micro-grids will not work properly in the absence of sunlight and the temperature of Australia is also moderate (Bermel, Yazawa, Gray, Xu, and Shakouri, 2016).

• Replacement of battery in every six to seven months.

• Absence of local commercial in the remote areas of WA.

• Logistics costs will be added due to the location of plant in the remote areas.

Wind energy

Opportunities

• Availability of wind in the remote areas of WA.

• The generated power can be used more specifically to the location.

• Laid out in the modular manner which will make update and expansion more efficient.

Challenges:

• Lack of standard on quality of power.

• Regulations and legislation are required to be addressed for regulation of the operations.

• Higher cost of installation.

• The demand for the infrastructure is high.

Hydro energy

Opportunities:

• Availability of experienced personnel for installing plant for generating electricity through hydro power as Australia has already developed 100 hydropower plant in the domestic locations (Gude, 2015).

• Development of favorable policies for supporting electricity generation through hydro energy.

Challenges:

• Australia is considered as the driest continent which receives less than 600 mm of rainfall (Boulton, Brock, Robson, Ryder, Chambers, and Davis, 2014).

• Limited availability of resource for surface water.

• The most of economically feasible resource of hydro energy has already been harnessed.

Recommendations

From the above analysis it can be said that the most feasible source of renewable energy for micro-grids is the solar energy. The rationale behind this is that the maintenance cost is low and process of installation is easy as compared to wind and hydro resources. The use of solar energy for micro-grids is recommended as the cost and maintenance are low. In addition to this, the challenges in considering solar micro-grids are manageable and cost-effective.

f) Monitoring and evaluation plan

The Monitoring and evaluation framework will be implemented in order to track the result and progress of implementation of solar micro-grids in the remote areas of Western Australia. The principle of guiding for monitoring will be based on results. It will indicate that the focus of monitoring shall be on output rather the input used in programs and projects.

As per the plan, the components such as baseline data and performance milestones will be monitored with respect to the final achievement of the project. The construction process in relation to the schedule of time will be reported on quarterly basis. The components of baseline data includes number of installed mini-grids, the capacity of electricity generations, number of total household, business, and public institutions connections (Malhotra, Schmidt, and Hemer, 2017). The abated amounted of CO2 will not be reported but a separate consultancy will calculate its aggregated amount. In order to monitor the progress, site visit will be conducted for the purpose of verification. The collected data will be entered in the database of Government projects of Australia for enabling the process of reporting and will be reviewed later on periodic achievements.

Conclusion

On the basis of the above analysis, it can be concluded that the energy policy is developed for the remote areas of Western Australia as they are facing the issues of electricity due to the higher cost of implanting the micro grid standalone system. Along with this, it can also be concluded that Australia is also consuming the most of its energy from the traditional sources as coal with 78%. In context to the developed energy policy system, the literature is developed with the defining problem in depth manner. Along with this, it can also be summarized that the evaluation criteria as effectiveness, efficiency, equity and institutional aspects are also considered. Moreover, the major alternative policies are determined as solar, wind, hydropower and hybrid solution for the energy policy. It can also be said that the solar energy is a significant solution for Western Australia to implement for purpose of resolving the public problem.        

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