Grid defection

For many remote islands, supplies from mainlands are very important from food, medical to
fuels. In the case of Mer Island, a barge visits on a weekly basis to refill their supply mostly food
and fuel (Passi, 2015). As we expected, ships are often olds and poor conditions making them very
inefficient. The fuel cost is the largest expense for any shipping companies. To reduce the
dependency on the weekly sea freight, 800km away from Cairns, Mer Island must develop
solutions to become more self-sustain such as higher renewable penetration, better logistic
management, urban transport strategy and increase home-grown food consumption. Knowing
every solution have their costs we must further analyse their absolute benefit. In this section, we
will discuss how an on-grid or an off-grid is the most economical option for Mer Island.
Currently, Ergon Energy solely owns and operates three of 200kW diesel generators on Mer
Island with two local technicians being on site. The plant is located in the middle of zone 1 (Northwest coastal area of the island), where most of the houses are. The fuel tanks, a total capacity of
60kL, are being refuelled on a monthly basis. If theres a problem with the plant and local
technicians are not capable to handle a fly-in team will be requested from Thursday Island, it
usually takes 3-4 days for the team to arrive (Passi, 2015). Each house is connected to the grid
through prepayment meters that only allow in remote communities in Queensland state, this is to
help the households in keeping track of their electrical expenses and avoid building debts from
electrical bills (Queensland Council of Social Service, 2015). One benefit of being a small
community is that we can experiment
The global trend of solar photovoltaic technology is always becoming cheaper and more efficient
every year. While the distributed electrical storage is also on the same trend, thanks to the mass
production of batteries for electric cars (Rocky Mountain Institute, 2015). For remote communities,
the fuel price is largely different from the price on the mainlands. Mer is paying $2.8 per litre of
diesel fuel, which is around three times higher of what we are paying here in Australia mainland.
Hence, the point which solar with battery systems reach grid parity is already present in some
remote communities.
In The Economics of Load Defection report published by Rocky Mountain Institute on April
2015, the topic of how grid-connected solar with battery system will compete with traditional
electric service has been discussed extensively. They concluded that solar-plus-battery systems
will play an important role in the electricity system of the future. Since they can offer lower and
more stable pricing compare to the grid-connected system that tends to vary with the price of fuel,
higher reliability and lower carbon alternatives than the conventional fossil fuelled power plants
(Rocky Mountain Institute, 2015).

Lithium-ion battery: how promising it actually is?

Lithium ion battery is known for its efficiency high power density, fast charging, long
lasting life cycle and light weight. Making it the ideal battery type for remote island where the
transportation cost is generally a large part of the capital cost. However, all those benefits
obviously come with a higher cost than the traditional batteries. Hence, it has been used only for
mobile electrical energy storage, such as mobile phones and laptops, and electric vehicles where
weight and efficiency matter the most. Earlier this year, the company Tesla motor presented a
disruptive Lithium ion battery packs for both commercial and residential scales at a new price
standard, at $300 USD per kWh (excluding installation cost and an inverter). Which causes the
market price for lithium ion battery to re-forecast the trend again, as shown in the chart below.
Making this to become one of the possible options for Mer Island higher renewable penetration
projects in the future. As reported Australia Geoscience (Ga.gov.au, 2015), Australia holds 7% of
the lithium unknown resource in the world and is one of the largest producer of lithium (34% of the

world total lithium production as of 2010). At the same time, lithium is becoming a scarce resource
and highly demanded by the consumer electronics market which the market can supply at a lower
amount for a higher cost.
Lithium-ion battery costs and forecasts (source: Rocky Mountain Institute, (2015))

Reference

Passi, M. (2015). A talk about The infrastructures on Mer.

CAT Projects, (2012). Torres Strait - Options to Reduce Regional Carbon Footprint. [online]
Available at: http://www.tsra.gov.au/__data/assets/pdf_file/0005/2003/final20torres20strait2020options20to20reduce20regional20carbon20footprint20-20january202012.pdf [Accessed 25 May
2015].
Ga.gov.au, (2015). Lithium - Geoscience Australia. [online] Available at: http://www.ga.gov.au/datapubs/data-and-publications-search/publications/aimr/lithium [Accessed 25 May 2015].
Queensland Council of Social Service, (2015). Empowering remote communities. Experiences of
Aboriginal and Torres Strait Islander customers using electricity pre-payment meters in
Queensland.
Rocky Mountain Institute, (2015). The Econimics of Load defection. how grid-connected solar with
battery system will compete with traditional electric service.
Rocky Mountain Institute, (2015). The Economics of Grid Defection. WHEN AND WHERE
DISTRIBUTED SOLAR GENERATION PLUS STORAGE COMPETES WITH TRADITIONAL
UTILITY SERVICE. [online] Available at: http://www.rmi.org/electricity_grid_defection [Accessed 20
May 2015].