Water utilities require more regulatory support

Water utilities around Australia are working under challenging renewable energy targets – Victoria’s is 40% by 2030, Queensland’s is 50% by 2050 – and one leading water researcher says some water utilities require more regulatory support in order to make the most of all production options available.

Set to present at the upcoming AWA Queensland Conference on renewable energy targets in the water industry, University of Queensland researcher Alice Strazzabosco said that while Australian water utilities have been working with renewables for decades, the sector specific targets set will require significant changes.

“The Australian water sector has been looking into alternative energy sources for quite a long time already – at least 20 years. Several utilities actually started integrating renewables before governments set renewable energy targets,” she said.

“Uptake of renewable energy solutions are one part of the new wave of energy management strategies developed by utilities to create a more sustainable water industry, which also includes energy auditing and benchmarking, energy conservation measures and load shifting.”

Strazzabosco said her research assessed renewable energy uptake in the 25 largest water and wastewater utilities in Australia, collectively treating more than 80% of Australia’s water and wastewater.

“Overall, the water industry offsets 18% of its total electricity demand with on-site renewable electricity generation. However, when you look at single utilities, a huge difference exists between larger and smaller water utilities,” she said.

“For example, Melbourne Water, the second largest utility in Australia in terms of population served, has achieved over 34% of energy self-sufficiency through on-site renewable electricity generation and it is therefore well on track to achieve its target of 40% renewable generation. Most of the small utilities instead achieve less than 5%.

“Because these targets are ambitious, it will require quite a big change in how some of Australia’s utilities will operate in the next 10 years.”

Uptake of renewables
Despite this huge challenge, Strazzabosco said there’s no specific regulations in place to help the sector uptake renewables, which will likely have an impact on what different water utilities can achieve.

“The adoption of renewable energy sources by water and wastewater utilities can increase the technical and regulatory density of an already complex sector, for example, drawing energy-related regulations into operating requirements,” she said.

“Also, uncertainty around return on investment, unclear requirements of grid connection and difficulties to match the energy produced with the energy demand are just some of the uncertainties that are impacting investments in renewable energy projects. And while the water sector has had to play by the rules the government has set for all industries, it has its own unique requirements and opportunities.

Strazzabosco  said the location and size of a utility has a huge impact on what it can do; the topography of its catchment, the size of the water distribution and wastewater collection network make a huge difference on the opportunities available to each utility.

“Small utilities usually have less opportunity because, of course, they have less options to choose from. And they do not always have access to capital,” she said.

“Larger utilities usually have finance on their side when it comes to paying for the installation of large systems upfront and the opportunities for renewable energy regeneration tend to be more abundant for them.

“For example, Melbourne Water is the only utility in Australia extensively recovering hydropower from its water distribution system, due to Melbourne Water’s reliance on a gravity-fed water distribution line; they have a long network of water distribution and 14 sites where it's convenient to recover hydropower.

“Likewise, if a utility has less wastewater, it has less opportunity to recover biogas. When it comes to solar photovoltaic (PV) instead, the existing opportunity depends solely on space availability to develop new projects, such as rooftops, land or water bodies. However, even in this case, larger utilities might have more options to choose from compared to smaller ones.”

Technology requirements
Strazzabosco said regulation depends largely on the kind of technology being implemented, and that different technologies have different requirements.

“In Australia at the moment, there's a lot of support for solar PV. The feed-in tariff, which is one of the two main policies supporting renewable energy uptake, is mostly designed for solar PV,” she said.

“Except for Victoria, every other state in Australia only gives you an incentive through the feed-in tariff if you produce and feed to grid electricity from solar PV. Victoria is the only state that also accounts for biogas and hydropower and other sources of renewables.

“If a utility has to decide on renewable energy sources and technologies based on the financial viability of the project, it makes sense for the utility to invest in an option that allows them to generate revenues when they sell to the grid.”

But at the same time, one of the biggest issues is the disconnection between different industries, specifically the energy sector, Strazzabosco said.

“They are all working towards similar targets; it would be better to see them as a system that has a strong nexus and connection, rather than thinking about energy and water separately. Otherwise, we risk losing a lot of the opportunities available for producing renewable energy,” she said.

Three main sources
Strazzabosco’s research found that water utilities use three main sources of renewable energy, which are biogas, hydropower (minihydro) and solar PV.

Due to Australia’s climatic conditions and strong regulatory support, solar is an easy technology to deploy and utilise, while there’s currently no national regulatory incentive for the water sector to continue to pursue biogas and hydro.

“From 1998 through to about 2005, biogas was the clear focus for many utilities. Once the sector recovered all the economically viable biogas, they started looking at hydropower, which was the focus for the next four to five years,” she said.

“When all the hydropower that was economically viable was recovered, the sector moved into solar. That happened around 2013, when the price of electricity started increasing and at the same time the cost of solar technology started dropping, and the sector shifted accordingly towards solar PV.

“Currently, there are no new regulations supporting further uptake of biogas and hydropower, but there's this strong support for solar, in the form of financial incentives, the feed-in tariff, and the renewable energy certificates.

“Solar PV can be seen as a great opportunity for water and wastewater utilities to actually achieve the renewable energy targets easily. But at the same time, it represents a barrier to the generation of renewable electricity from biogas and hydropower systems.

“This is an issue because biogas from wastewater and hydro from the water distribution line are only accessible to the water industry. The fact that solar is so cheap and so easily accessible at the moment is really becoming a barrier to actually doing more with other available options.”