Policy Analysis Report

Title: A policy analysis to inform the Western Australian Government about the appropriateness of considering the renewable energy based micro-grids for remote area electrification

This project has been constructed using both fictitious and actual case information. The aim of this project is to assess the students' ability to undertake an energy policy analysis using the basic steps of policy analysis. It, in no way, attempts to formulate a real case scenario.

Background

Traditional, centralized power grids--where power is generated by fossil fuel plant, transmitted and then distributed to users--are fast becoming an object of the past. Such systems are inefficient and vulnerable to natural disasters. The development of renewable energy technology, such as wind turbines and solar panels, have led to more compact generators compared to fossil fuel plant.

In Australia, remote communities are supplied by diesel and gas standalone systems. The main difficulties of such electricity generation systems are the fuel price, the difficulty of fuel transport by road trains through seasonally impassable routes, the necessity and cost involved in building and expanding gas pipelines, and their CO2 emissions. For these reasons, renewable energy microgrids are attractive for future electricity networks and microgrids with storage solutions are set to become a cost-effective approach for supplying the electricity demand of remote area customers. The main feature of a properly designed and controlled microgrid is its independence from the utility grid, which makes it the ultimate technology for electricity generation and distribution in remote areas. These systems are capable of operating as mobile or standalone systems or as a supplemental part of larger conventional power grids.

A major rollout of microgrids in Western Australia could also provide an economic boost through the use of local suppliers for procurement, construction, and maintenance of projects.

"While uncertainty in policies relating to microgrids may be holding back their deployment in Eastern states, Western Australia being outside the National Electricity Market (NEM) is an advantage that can be used for economic and social benefits for all Western Australians", says the Clean Energy Council.

Assignment

You have been hired by the Public Utilities Office (PUO) of the Department of Finance as a Senior Energy Policy Analyst to undertake an in-depth policy analysis, using the six-step policy analysis framework, and provide recommendations to the Minister of Finance via the Executive Director of the PUO. Your specific roles are the following:

a) Undertake literature review to define the problem;

b) Establish the evaluation criteria. Your criteria essentially will be based on the claims made by the different groups but will also take into consideration the Government's interests and resources including, but not limited to, financial ability, political issues and concerns, environmental strategies, and policies on energy security.

c) Identify alternative policy options. You will devise a set (minimum of three, excluding the "status quo") of alternative policy options.

d) Evaluate the proposed policy options. The choice of evaluation method is up to you and can include various methods, such as cost-benefit analysis, qualitative analysis, Marginal Abatement Cost Curve (MACC), Multi-criteria Decision Analysis (MCA), and Analytic Hierarchy Process (AHP); or a combination of these. However, socioeconomic and environmental issues of the State should be considered.

e) Summarise and present the alternative policies in a way that is easily understandable by the client and other stakeholders to capture the challenges and opportunities of the alternative options to make an informed decision. You should also make a recommendation of the most preferred policy (from your client's viewpoint) taking into consideration of the interest of the community at large.

f) Devise a plan for the monitoring and evaluation of the implementation of the preferred policy option (not for all).

You will rely on the data and information that are publicly available online. Use your analytical ability and evidence-based information to support your arguments. Please ensure all collected data and information are adequately referenced using a style guide for reference.