Battery Feasibility Study

S.O.
S BESS ISSUE [1] APOLLO BAY 1/83

ISSUE/AMENDMENT STATUS
Issue Number Date Description
12 7/7/2022 Final
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S.O.S BESS [1] APOLLO BAY

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1. Executive Summary 8
2. Introduction 11
2.1 Neighbourhood Battery Feasibility Study 11
2.2 About Southern Otways Sustainable 12
2.3 About Mondo 13
2.4 Why Apollo Bay? 14
2.5 Definitions and Acronyms 15
3. Report Intent 16
3.1 Aim 16
3.2 Problem Outline 16
3.3 The Approach 17
4. Technical Solution 19
4.1 Network Technical Information 19
4.2 Solution Selection Considerations 20
4.3 Technical Solution Options 22
4.4 Technical Recommendation 28
4.5 System Design 38
4.6 Site Selection 39
5. Community Engagement 43
6. Business Model 44
6.1 Ownership Structure 44
6.2 Key Parties 45

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6.3 Project Costs & Economic Assessment 46
7. Project Delivery 49
7.1 Project Delivery Team 49
7.2 Delivery Solution Summary 49
8. Appendix 51
8.1 Appendix A: DNSP (Powercor) information 51
8.2 Appendix B: Case Studies 52
8.3 Appendix C: Community Ownership overview 54
8.4 Appendix D: Site Selection 55
8.5 Appendix E: Features of an Advanced Microgrid 65
8.6 Appendix F: Community Engagement 71
8.7 Appendix G: Accessible value streams from a Big Battery 75
8.8 Appendix H: Business Model 79

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Figure 1 - Project phases and expected deliverables and cost estimate accuracy range 18
Figure 2 - Example of an advanced microgrid block diagram 26
Figure 3 - Delivery Solution Summary 49
Figure 4 - Third Party owned potential structure 55
Figure 5 - Site 1: Barwon Water supplementary Water Reservoir - Marengo 62
Figure 6 - Site 2: Barwon Water Reservoir and Fresh Water treatment Old Tip Site,
Roberts Road Marengo 63
Figure 7 - Site 3: Barwon Water Reservoir & Fresh Water treatment cnr Ferrier Drive
- Marengo 64
Figure 8 – Site 4: Barwon Water Wastewater Treatment Plant - Apollo Bay 65
Figure 9 - Microgrid High Level Control Diagram Example 68
Figure 10 - Asset Value Stack for BESS 76
Table 1 - Key project data 10

Table 2 – Definitions and Acronyms 15
Table 3 - Network information extrapolated from 30-min energy usage data for CY 2019 –
Apollo Bay 19
Skenes Creek 19
Marengo 19
Table 6 - Problem/Feature overview 21
Table 7 - Option 1 Benefits/Drawbacks 22
Table 11 - Option evaluation table - objectives 29
Table 12 - Option evaluation table - cost/complexity 30
Table 13 - Technical objectives evaluation 33
Table 14 - Ownership structures, benefits and challenges 44
Table 15 - Project financial metrics 47

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Table 16 - Site selection overview 57
Table 17 - Key Stakeholders 71
Table 18 - Community's (residents’) feedback from four market engagements as at 1 March
2022 (142 separate engagements) 73
Table 19 - Community's (Business) feedback from online survey 22 April 73
Table 20 - Community feedback on ownership structure 74
Table 21 - Project Costs 83

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1. Executive Summary
This feasibility study has been prepared by Mondo Services for the Apollo Bay-based Southern
Otways Sustainable (S.O.S) community energy group.
Community Objectives
The study focuses on the technical feasibility of providing localised energy solutions for Apollo
Bay and the surrounding areas of Skenes Creek and Marengo. From community feedback
conducted during the feasibility study, S.O.S and the Apollo Bay community have indicated the
desire for increased community energy network reliability for short term outages, increased
resilience in extreme weather and longer term outages, and to address community concerns
including local PV generation curtailment and renewable energy hosting capacity. The
community also has a strong desire to be 100% renewable by 2030. For more detail refer to
section 3 and 4.2.
Technical Solution
The technical solutions that are considered for the Apollo Bay community include a range of
installations located in residential, commercial and network related sites. The technical
solutions include the following:
- A network of Low Voltage (LV) Battery Energy Storage Systems
- A Grid Scale Battery Energy Storage System
- An Advanced Grid Connected Microgrid
- Targeted behind the meter resilience
This report recommends the implementation of a 4.95MW/10MWh battery with islanding

capabilities as part of an initial staged approach towards an eventual advanced grid connected
microgrid in order to best address the technical objectives raised. The benefit of using a staged
approach reduces the initial complexity and required capital inherent with implementing an
advanced microgrid and an islandable battery allows for increased reliability and solar hosting
capacity with the community. Following the initial stage, it is recommended that S.O.S. engage
the DNSP, Powercor, to negotiate the operation of the battery in an islanding mode. The Apollo
Bay community could also consider the roll out of behind the meter infrastructure, to provide
some resilience in the case of longer network outages.
The proposed solution would be able to:

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● backup for outages around the 2-hour mark in the worst-case scenario (peak
demand);
● create local demand during the day, soaking up excess solar generation and using it
to address peak demands in the evening. This would primarily address any whole
town MV constraints but would unfortunately only have minor benefits for LV
constraints that cause residential export limits;
● support development of an advanced microgrid which would allow the community to
realise its ambitions for 100% renewable energy.
At the conclusion of the feasibility study, new information provided by Powercor indicated that
the Marengo community exists on a separate feeder (CLC003) to Apollo Bay and Skenes
Creek (CLC013) and as such will not be serviced by a battery that is connected to the feeder
(CLC0013) covering Apollo Bay and Skenes Creek. Addressing the needs of Marengo should
be the focus of future investigation and may comprise of similar recommendations covered in
this report.
Ownership Structure
It is recommended that the battery be owned and operated by a third-party to minimise the
technical and financial risk to the community. This recommendation is reinforced by community
sentiment, gathered during the community engagement phase of the project, which supported a
third-party owned model, with limited support for a community owned or joint venture approach.
A third-party ownership structure would not necessarily prohibit or impede the use of the battery
in achieving the technical objectives outlined above.
Project Costs and Economic Assessment
The battery will require government funding in the form of grants to become financially viable.
This grant could comprise up to 49% of the project. The remainder of the upfront capital cost
would need to be covered by a third-party owner (or the community if a community ownership
model is considered). Funding from the DNSP may be available in the form of benefits flowing
from avoided network augmentation, however, Apollo Bay has not been indicated as an area of
concern for the DNSP, and this funding has not been included in any assumptions in this report.
An analysis of the estimated costs and revenue produces an NPV in the range of -$1.7m
(unfavourable) to $400k (favourable). The NPV assessment assumes a level of government
funding to make the project viable and has been included in the modelling.

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Risks and challenges
There exist some possible risks and challenges associated with the battery in its current form to
consider, which include:
- Uncertainty and risk with the battery being able to operate in islanded mode. This would
require significant collaboration and cooperation from the DNSP;
- The network may require significant upgrades to accommodate a battery asset;
- Costs outlined in this report may be significantly affected by supply chain issues.
Next Steps
Future actions with regards to project delivery should be the incorporation of a project team to
set up the project or engage an EPC to run the project on behalf of the community. An
expanded version of the whole delivery model should be provided during the delivery stage,
with further details of delivery partner resources and details of key personnel.
Table 1 - Key project data
Description Unit
Battery Capacity 4.95MW/10MWh
Estimated CAPEX $9,930,000.0 - $18,300,000.0
Estimated OPEX $181,000.0 - $335,000.0
Forecast cost savings to network (5MW $1,000,000.0 - $5,000,000.0*
avoided augmentation)
Forecast cost savings to customers Unable TBC**
Estimated community members positively ~2,000
impacted by project
Estimated households connected to ~1,650
neighbourhood battery*
What has been your estimated expenditure $4,500,000.0
(ex GST) for local procurement
* Refer to Appendix A
** At the time of writing this report, Mondo was unable to provide an estimate of forecast cost savings based on the
available information.

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2. Introduction
Australia is in the midst of an important energy transformation as part of Australia’s commitment
towards cutting carbon emissions to near zero.
Our energy future will be one that entails a mix of existing and emerging technologies across
solar, batteries, electric vehicles, wind farms and hydrogen. Our challenge is to leverage green
energy whilst ensuring energy access remains affordable and reliable.
Much of this transformation is being driven by the rapid uptake of Distributed Energy Resources
(DER) across households and business. Reinforcing this uptake are growing community-based
initiatives for solar and wind farm generation supported by neighbourhood batteries. As of
November 2021, Australia had more than 3 million rooftop solar PV systems installed across
the country. This is the highest uptake of solar of any country globally. These changes will
create a vastly different energy system to the one originally designed for fossil-fuel based
generation via sources located many kilometres away from the point of consumption.
The role of neighbourhood batteries is seen as important in supporting this increased solar take
up whilst addressing related grid stability issues and important community-based energy
reliability needs, in the face of bushfires and severe weather events. There is a growing interest
in the role of neighbourhood batteries which carry scale-based benefits and the ability to
integrate more solar generation into the energy grid by increasing its “hosting capacity”. Under
the right commercial models, neighbourhood batteries may also offer more equitable access to
a wider range of energy users by spreading the benefit of renewables access.
The value of battery storage will only increase over time as Australians continue to electrify our
energy system through Electric Vehicle uptake, replacement of inefficient gas appliances and
increased solar PV uptake. Energy storage will be critical in smoothing supply and demand to
avoid network congestion at local community levels whilst maximising use of intermittent
sources of renewable power and facilitating community objectives towards a low-carbon future.
2.1 Neighbourhood Battery Feasibility Study
In 2020, Southern Otways Sustainable (S.O.S.) in partnership with the Apollo Bay Chamber of
Commerce (ABCC) successfully secured funding from the Victorian Government to undertake a
study to investigate the feasibility of a neighbourhood battery for the coastal cluster of Apollo
Bay, Skenes Creek and Marengo.

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“It’s estimated Apollo Bay spends in excess of $4.5M on power, which is lost to
the local economy each year, every year. This transition offers opportunities to
empower our community in ways other than just the Renewable Energy goal.”
Lisa Deppeler - S.O.S
The study will assess the technical aspects and business case for a neighbourhood battery and
identify a process to distribute values to multiple beneficiaries including residents and local
businesses. The project also aims to create a more reliable electricity supply for the Apollo Bay
township, which will have a positive impact on local businesses and residents.
Mondo Power has been contracted as the consultant for this project. Since 2001 Mondo Power
has been pioneering community mini-grids and regional energy hubs that empower homes and
businesses to generate, manage, store and share energy.
The Colac Otway Shire Council has also provided funding for this feasibility study which is
expected to be completed by July 2022.
Community feedback is a key aspect of the feasibility study and S.O.S and the ABCC are
encouraging residents and business owners to participate in research and provide feedback as
the study progresses.
2.2 About Southern Otways Sustainable
Southern Otways Sustainable (S.O.S) was formed in 2018. S.O.S is a not-for-profit community
group of volunteers, frustrated and motivated by the lack of government action on climate
change.
The group has a vision of achieving a net zero energy future for the local community by way of:
● Building on existing ‘Rooftop Solar’ capacity through community (Bulk Buy) programs;
● Improving the energy efficiency of local businesses and homes;
● Exploring the feasibility of a neighbourhood battery and micro-grid.
S.O.S is supported by many community partners including the Colac Otway Shire, the
Apollo Bay Chamber of Commerce, Great Ocean Road Health and the Barwon Region Alliance
for Community Energy.

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2.3 About Mondo
Mondo is an energy industry leader with expertise in metering, behind-the-meter energy

solutions, community energy hubs, energy management platforms and transmission assets.
Our assets deliver energy to over 730,000 customers across Victoria.
Mondo has extensive microgrid and neighbourhood battery experience across regional Victoria
as part of the following projects:
Phillip Island Community Energy Storage System (PICESS) - a large-scale 5MW/10MWh

neighbourhood battery in Phillip Island delivering energy security to the entire island and
accompanied by tariff trials.1
DELWP Community Microgrids and Sustainable Energy Program (CMSEP) Development

Initiatives in Euroa and Yackandandah where solar, battery, and hot water systems were rolled
out in targeted community areas for aggregation.
Mondo also has a significant presence in the Great Ocean Road region having been involved in
a number of major community projects:
The Deakin University smart energy microgrid partnership: A $25M renewable energy
microgrid in the greater Geelong region. The microgrid supports a 14.5 hectare solar farm and
1MW battery contributing to an anticipated 12,000 tonnes of annual carbon emission
reductions. 2
Geelong+ Community Solar Program (G21): Victoria’s largest-ever community solar and
battery bulk-buy program incentivising regional Victorian residents and businesses to invest in
solar panels and battery systems. The program has contributed to 2.5MW of combined solar
and battery capacity across the greater Geelong region.
Apollo Bay Community Solar Program : In 2019 S.O.S joined forces with Mondo Power and
City to Surf Solar, to offer the Community Solar Program. Supported by an enthusiastic
community the program achieved over 250kW of installed Solar PV and 110kWh of battery
storage.3
1
https://mondo.com.au/community/energy-hubs-and-projects/phillip-island-battery
2
https://mondo.com.au/community/energy-hubs-and-projects/deakin-microgrid
3
https://mondo.com.au/community/energy-hubs-and-projects/oceangrove

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2.4 Why Apollo Bay?
The townships of Apollo Bay, Skenes Creek and Marengo are situated on the Great Ocean
Road within the Colac Otway Shire. The towns have relatively small permanent resident
populations (Apollo Bay: 15984), however, populations swell during busy summer months due
to tourism. In the case of Apollo Bay, the population swells to in excess of 15,000 permanent
residents and holiday makers.
Such a population increase places increased stresses on the energy infrastructure –

exacerbated by the location of these towns at the remote edges of the feeder-based network.
Energy consumption swells during Summer but also during Winter months as a possible result
of inefficient household appliance systems, namely electric hot water units.
The region along the Great Ocean Road was also significantly impacted in the summer of
2015/16 as over 100 properties were destroyed by bushfires and major tourist towns were
evacuated – at a time of year when populations were highest. Bushfires also impacted the
Otways in January of 2020.
Apollo Bay has a long history of a problematic electricity supply impacting an energy
consumption profile of 20GWh each year. Frequent and unpredictable outages typically occur
at times of peak demand. Outages at these critical times severely impact the earnings of
affected businesses, who rely on peak tourist visitation periods for a profitable full calendar
year. There were some 70-80 unplanned outages across the region during 20205.
The town is not supplied by natural gas, relying on bottled LPG, which adds to the energy costs
and emissions profile of the community.
For these reasons, Apollo Bay, Skenes Creek and Marengo were deemed to be ideal locations
to support a neighbourhood battery feasibility study.
4
2016 census
5
Powercor 2020-2021 Annual reporting RIN (AER)

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2.5 Definitions and Acronyms
Table 2 – Definitions and Acronyms
Term Definition
NEM National Electricity Market
DELWP Department of Environment, Land, Water
and Planning
CMSEP Community Microgrids and Sustainable
Energy Program
AEMO Australian Energy Market Operator
LV Low Voltage
MV Medium Voltage
V Volts
EV Electric Vehicles
DNSP Distribution Network Service Provider
HV High Voltage
AC Alternating current
BESS Battery Energy Storage System
DER Distributed Energy Resource(s)
FCAS Frequency Control and Ancillary Services
PPA Power Purchase Agreement
NPV Net Present Value
IRR Internal Rate of Return
EPC Engineering Procurement Contractor
BOOM Build, Own, Operate, and Maintain
BOOT Build, Own, Operate, and Transfer

JV Joint Venture
OTC Over The Counter
RAMPP Regional Australia Microgrid Pilot
Program

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3. Report Intent
3.1 Aim
This feasibility study was developed for S.O.S and the Apollo Bay Chamber of Commerce,
considering the Apollo Bay area and neighbouring suburbs Skenes Creek and Marengo.
In order to fulfill the intent of this report, the energy challenges facing the Apollo Bay, Skenes
Creek and Marengo community are outlined whilst capturing the community’s future
aspirations. Various technical solutions will be presented and evaluated against criteria formed
from the outlined challenges and aspirations. A recommendation on the best fit technical
solution for the community will be presented.
3.2 Problem Outline

The town of Apollo Bay and surrounding neighbourhoods of Marengo and Skenes Creek are
located at the end of long network connections, resulting in the communities experiencing
greater voltage fluctuations, system stability issues and power outages. Flow-on effects range
from minor inconveniences through to communication outages, service disruptions and
blackouts, sometimes threatening the health and safety of both this community and the many
visitors to the town. Power lines into these communities are more vulnerable to extreme
weather conditions, including bushfires. This is further compounded by extended response
times to address network issues, due to the remote locations and rugged terrain where the
poles and wires are situated.
As mentioned, Apollo Bay is a tourist destination town with an influx of temporary holiday
makers in the summer months. Network outages are a significant concern for the community
with disruptions experienced on a regular basis, and for extended durations. The network area
experienced 70 unplanned outages in 2020, with an average duration of 226 minutes per
outage, the majority of which occurred in summer. The longest outage recorded was 1,345
minutes (22hr 25min). Of those unplanned outages, asset failure represented 26% of outage
duration and 51% for weather events. The Apollo Bay commercial sector, in particular, is
affected by outages as the majority are occurring during peak season months, leading to
potentially significant revenue losses. For these reasons, the technical objectives of reliability of

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the network in the case of shorter outages (less than 2 hours), and resilience in the case of
longer duration outages (typically lasting more than 2 hours) are important considerations for
the community.
The Apollo Bay community has a 14% 6 residential solar penetration, with rooftop export for
much of the year higher due to 70% of residences being vacant holiday homes. A proportion of
which currently experiences solar curtailment due to grid capacity constraints. The community
has expressed desires to be able to increase their proportion of rooftop PV installations.
Given the majority of current rooftop PV installations installed in Australia lack the ability to
control the electricity to be exported to the grid, high penetrations of rooftop solar can lead to
network congestion in local distribution networks, especially during peak production hours (i.e.
middle of the day). This is reportedly a feature of the Apollo Bay area. In order to avoid
exceeding the technical limits of the grid and manage this issue today, energy networks like
Powercor, (the DNSP for the Apollo Bay region), impose zero or near-zero energy export limits
on new solar systems in congested areas.
The Apollo Bay community also understands, and is concerned about, the risks posed by
climate change. The community has expressed ambitions to become powered by 100%
renewable energy by 2030 in order to reduce its impact. As such, the solutions discussed in
this report will be assessed against this technical objective.
3.3 The Approach

The industry standard process for developing projects follows a converging path of maturing
engineering details and cost estimates. This process steps through five phases beginning with
concept then through feasibility, front end engineering design (FEED), detailed engineering
procurement and construction and lastly with start-up of operations.
As outlined in Figure 1 below this feasibility report forms the concept level which is a class 5
cost estimate with an expected order of magnitude of +50% to – 30% accuracy range. This is
followed at a later stage by the feasibility engineering and cost estimate phase, which can
expect an estimate range of a class 4 estimate with an accuracy range of +30% to –20%
(FEL-1).
6
Network usage data provided by Powercor

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Figure 1 - Project phases and expected deliverables and cost estimate accuracy range
This feasibility begins with the phase of engineering detail and costing by defining the technical
scope and solution, followed by a review of both regulated and unregulated revenue streams
available for the variety of proposed solutions. The ownership models for the proposed solution
are also explored in detail.
In addition, the commercial proposition for the final proposed technical solution will be
evaluated in terms of estimated costs and the business models that provide a zero Net Present
Value (NPV) against future revenue streams.

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4. Technical Solution
This section provides a summary of the technical solution to targeting the four key objectives
for the Apollo Bay community.
4.1 Network Technical Information

The following technical information was extrapolated from 30-minute interval energy data from
the 2019 calendar year for the Apollo Bay area. Apollo Bay and Skenes Creek are on feeder
CLC013 (Colac), and this feeder covers a few other towns with the network managed by
Powercor. All of CLC013 is shown to be very stable by the available data - between 240 and
245V.
Table 3 - Network information extrapolated from 30-min energy usage data for CY 2019 – Apollo Bay
Recorded on
Maximum Demand 4.19 MW 08/06/2019 at 10pm
Average Daily Energy Usage 38.6 MWh -
Maximum Daily Energy Usage 60.33 MWh 30/12/2019
Maximum Energy Usage (2hr 5.81 MWh 08/06/2019, 9:30-11:30pm
period)
Table 4 - Network information extrapolated from 30-min energy usage data for CY 2019 – Skenes Creek
Maximum Demand 0.63 MW 08/06/2019, 10pm

Average Daily Energy Usage 4.2 MWh -
Maximum Daily Energy Usage 8.3 MW 30/12/2019
Maximum Energy Usage (2hr 1 MWh 08/06/2019, 9:30-11:30pm
period)
Table 5 - Network information extrapolated from 30-min energy usage data for CY 2019 – Marengo
Maximum Demand 0.63 MW 27/09/2019, 10pm

Average Daily Energy Usage 5 MWh -
Maximum Daily Energy Usage 8.9 MWh 30/12/2019

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Maximum Energy Usage (2hr 1.2 MWh 30/12/2019 1:30-3:30pm
period)
Residential consumption comprised the largest energy use, when compared to agricultural,
commercial, and industrial categorisation. For the Apollo Bay region, residential customers
export the equivalent of up to 12% of their energy needs (in the form of excess energy) from
solar panels in the summer months. This is similar for Industrial customers (up to 11%). Despite
the swelling population in summer due to tourism, peak residential energy consumption occurs
in winter. The same is not true for commercial & industrial customers - the peak is in January,
with a relatively flat load profile throughout the remainder of the year. For commercial
customers and domestic farms there is little excess solar generation, for agriculture there is no
solar generation.
4.2 Solution Selection Considerations

The initial technical consideration covered by this report will analyse and recommend the best
technical approach for the Apollo Bay community based on the items discussed in this section.
Any proposed solution should be able to support the community downstream (Apollo Bay) for a
2-hour period. This period was outlined by the S.O.S community energy group as the target for
improving the reliability of the network. Longer outage durations are experienced regularly by
the community, with 60% of unplanned outages longer than two hours. This study and future
work will take into consideration the cost, technical viability, and community requirements for
selecting suitable solutions. The aims and considerations for each area are summarised as
follows, based on the issues discussed in the problem outline with the following four key
considerations:
● Reliability of power supply - overcome the regular outages (short term < 2hrs) that have
plagued the town for 30+ years.
● Resilience of the town’s power supply - in conjunction with supplementary local
generation, provide an emergency power supply to the community in the event of
longer-term outages (due to bushfires or similar)
● Grid Capacity constraints - facilitating the export of surplus domestic PV power to the
grid which will encourage residential/commercial uptake of PV and result in better
utilisation of local DER
● Increase Renewable Hosting Capacity - to accommodate the community's 100%
renewable energy aspirations (incl. potential wind/solar generation and micro-grid)

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A solution which targets these four areas should include the features outlined in the table
below.
Table 6 - Problem/Feature overview
Problem Feature
Reliability Short term, immediate response backup;
Islanding capabilities (inc. network management)
Resilience Dispatchable generation;

Islanding capabilities (inc. network management)
Sufficient backup and/or generation capacity to supply
the town for extended outages
Grid capacity constraints Low Voltage (LV) Energy storage, or
demand management
Renewable hosting Energy storage,
capacity network management
Additionally, the following items are also considered when developing and assessing the
various technical solutions:
Project Cost
● Minimise existing network augmentation, maintenance, and operation cost;

● Maximise utilisation of existing network assets; and
● Cost effective solutions including:
o Network and third party owned solutions proposed will seek to minimise costs
while meeting project objectives and quality requirements.
o Customer owned solutions will include an engagement period to ensure that any
installed solution will have acceptable benefits (savings, resilience, etc) for the
customer owner.
Technical Viability
● Recent reliability performance, and

● Fit for purpose products and ‘right-sizing’ the system
o how much energy is required, how much surplus is there from solar PV and how
much is available to trade on the market (influences the battery
charge/discharge cycle)

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o Based on historical and predicted community energy use
● Site selection and connection to the grid
o how far is the network apparatus from the proposed site
o Quality of the site, including the potential for co-generation with solar/backup
generation.
4.3 Technical Solution Options

This section outlines the possible technical solutions available. For the Apollo Bay area, four
options have been considered. The options summarised below are not necessarily mutually
exclusive from one another and can be combined given the requirements of the project.
4.3.1. Option 1 - LV network Battery Energy Storage System
Option 1 consists of multiple pole top or kiosk battery systems connected to the LV side of the
substation and arranged as a network. The network can exist in a front of meter, or behind the
meter arrangement. This option addresses issues at the substation and/or street level and
could be arranged to create islanding capabilities for the community, depending on the
supporting technology and total size of the network. This option would require cooperation with
the network, retailers, or aggregators to unlock benefits.
Multiple LV batteries can be coordinated as a network to mimic a larger battery, and from this
aspect are more easily scaled than a larger centralised Battery Energy Storage System
(BESS).
Table 7 - Option 1 Benefits/Drawbacks
Benefits
- Small individual footprints for batteries, potentially easier to select a site;

- Can support network reliability procedures if existing;
- Peak demand support/management, enabling deferral of network
augmentation;
- Alleviate low demand issues e.g. overvoltage, PV export limits;
- Increases PV hosting capacity at connection point;

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- Relatively (when compared to option 2) simple connection process when
BTM;
- Increased local energy generation and consumption, reducing losses;
- Increased energy affordability for the specific commercial customers taking
part in the solution;
- Improved network utilisation (and therefore productivity) compared to
upgrading the network to address infrequent peak events;
- Increased supply of wholesale and market services, placing downward
pressure on all customer bills.
Drawbacks/Challenges
- Does not provide resilience for extended outages;
- May have islanding capability but might only be able to provide backup for
short outages and only for a small area/number of properties;
- May need multiple units spread across town/area to provide desired benefits;
- Unable to participate in some National Electricity Market activities, while
others require partnership with a retailer or aggregator to unlock.
4.3.2. Option 2 - Grid Scale Battery Energy Storage System
A Grid Scale Battery Energy Storage System would comprise of a single large battery
connected to the MV network (22kV). The battery would be a front-of-the-meter connection
(meaning that it can be “seen” by the network provider for the area). This solution addresses
issues at a whole network level and can represent the initial building block for an advanced
connected microgrid. Cooperation with the network, retailers or aggregators is recommended to
unlock commercial benefits.
Benefits
- Participation in National Electricity Market activities, which represents a
potential revenue source;
- Can support peak demand management, enabling deferral of network
augmentation for the network provider, which represents potential support
from the network provider;

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- Can support network reliability procedures if existing;
- Alleviate low demand issues e.g. overvoltage, PV export limits which allows for
increases in PV hosting capacity;
- Improved network utilisation (and therefore productivity) compared to
upgrading the network to address infrequent peak events or constraints;
- Increased local energy generation and consumption, reducing losses;
- Increased energy affordability for the specific commercial customers taking
part in the solution;
- Increased supply of wholesale and market services, placing downward
pressure on all customer bills;
- Increased economies of scale compared to similar storage size of LV battery
network (option 1).
- High initial cost;
- Suitable site selection;
- May have islanding capability but might only be able to provide backup for
short outages and only for a small area/number of properties;
- Requires a more rigorous connection process when compared to option 1.
4.3.3. Option 3 - Advanced Grid-Connected Microgrids
The advanced grid-connected microgrid is a system built around a network of LV batteries

(option “3a”) or a grid forming MV BESS (option “3b”).
In addition to the battery system an advanced microgrid includes:

– An Microgrid Integration & Orchestration Platform also known as an energy
management platform;
– Network augmentation and support to enable microgrid operation;
– Suitable local generation to support objectives where required.
An advanced microgrid can also integrate with and incorporate:

– Essential Services Systems – Solar & Storage with Diesel Generator Backup;
– Businesses (Commercial and Industrial (C&I) or Small Medium Enterprises (SME))
Solar & Storage Systems;

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– Electric Vehicles (EV) Charging Stations;
– Demand Management;
– Residential Solar and Storage Systems;
– Additional generation sources.
The benefits and challenges of an advanced microgrid, in addition to those outlined in options 1
and 2 above are outlined in the following table.
Benefits
- Higher network reliability and resilience - System can island in the case of a
network outage or disaster (when paired with appropriate solar generation
and diesel backup, islanding duration can be extended);
- Orchestrates any integrated distributed energy resource (DER) to better
support the network during grid connected and islanded modes;
- Improved reliability and resilience provides another avenue of project
payback.
- Regulatory, e.g. in networks with REFCL protection;
- Orchestration of different microgrid components for safe and reliable supply;
- Highest cost solution;
- Technologically complex, requires very high cooperation from network
provider.

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Figure 2 - Example of an advanced microgrid block diagram
The centralised systems are the most critical component of an advanced grid-connected
microgrid for supporting a community during network outages, consisting of a grid forming
(islandable) battery supported by solar and/or generator connected to one of the 22kV HV
(High Voltage) distribution lines. It combines the benefits of renewable and conventional power
generation while offsetting the weaknesses.
Advanced grid-connected microgrids provide high flexibility in terms of which technologies the
solution incorporates by including focus on an orchestration platform and the integration
between technologies. It can also include future installations and new technologies in the
network by having them integrated with the existing platforms.
4.3.4. Option 4 - Targeted behind the meter resilience
Targeted behind the meter resilience differs from the advanced microgrid solution above in that
it does not have the function of providing backup supply to the wider town during an outage.
This solution installs energy resilient backup systems on sites that are deemed essential
services or hubs for emergencies where people without access to power can shelter in the
event of network outages and emergencies such as bushfires. Additionally, a larger amount of
residential solar and storage backup systems can be targeted to minimise the chance of hubs
being overwhelmed during emergencies. The number of residential backup systems will
ultimately be based on customer interest and uptake after the community engagement. This
system is comprised of significant behind the meter resources.
The components that make up this solution can include:

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PRICE
- Essential Services Systems (outlined in section 4.4.3.6) - Solar & Storage with Diesel
Generator Backup (short term off-grid supply);
- Businesses (C&I or SME) Solar & Storage Systems (outlined in section 4.4.3.7);
- Electric Vehicle Charging Stations (outlined in section 4.4.3.8);
- Residential Solar and Storage Systems (short term off-grid supply) for outer cluster
customers (outlined in section 4.4.3.10).
Benefits
- BTM assets have mature connection process and do not need high
cooperation from network provider;
- Community Resilience for essential services;
- Increased resiliency against extended outages during natural disasters;
- Relatively simplified solution when compared to option 3 a/b;
- Highly scalable and simplest participant contribution;
- Can be used in combination with option 1 or 2 as a way of adding resilience
for targeted area to the battery solutions;
- Solution requires the lowest implementation capital.
- Only limited islanding (resilience to extended outages) ability for
essential/targeted areas/sites;
- Does not prevent outages for the wider community;
- Helpfulness to community as a whole depends on the sites being targeted;
- Requires more significant individual contribution and a more targeted
community engagement plan.

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4.4 Technical Recommendation
A high-level summary outlining the options and their technical suitability is shown in the tables below.
Table 8 outlines the available options and assesses them based on the technical criteria outlined in section 3.2.
Table 9 analyses the four options based on their cost, complexity, footprint scalability and available revenue streams.

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Table 11 - Option evaluation table - objectives
Technology Reliability Resilience (Longer Alleviate Grid Increase Renewable Recommendation
(option) (outages <2hr & duration outages) Capacity or hosting Capacity

power quality) Constraints
Not recommended as does not

LV network No – only possible No, the BESS, on its own, cannot Yes, an LV battery network Yes, a network of LV BESS
when supporting supply the network for longer will be able to discharge can reduce reverse power adequately satisfy the four technical
Batteries (1)
network reliability outages during peak demand flow by charging during objectives. An LV battery as an initial
process peak PV hours step building towards option 3a

doesn’t adequately address the whole
town resilience and reliability goals.
On its own it would only partially
Large central No – similar to option 1 No, similar to option 1 Yes – similar to option 1 but Yes
to a lowered degree due address the technical objectives.
Battery System
to primarily addressing MV However, a central MV battery
(2)
network concerns represents the best first stage if the
end goal is an advanced microgrid
(option 3b) that encompasses the
whole town.
Preferred solution as it achieves all
Advanced Yes – microgrid Yes – through a combination of 3a - Similar to option 1 Yes, this option would allow
orchestration that distributed energy resources, 3b – similar to option 2 with for the highest penetration four technical objectives.
Grid-Connected
incorporates network demand management, battery increased capability of renewables through
Microgrids depending on DER
coordination allows for storage and backup centralised control and
(3a/b) integrated into
sections of the network generation demand management.
orchestration platform
to island Dependent on integration.

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PRICE
Would not achieve the same
Targeted BTM No – only for selected No – however, some selected Yes - similar to option 1 Yes
sites sites will have resilience and 2 technical objectives as a more
resilience (Simple
capabilities in longer outages advanced microgrid.
Microgrid) (4)
Table 12 - Option evaluation table - cost/complexity
Technology Cost Complexity* Footprint* Scalability* Available Revenue

streams
Network Support
LV network Low/Medium* Low/Medium Low Medium
Contingency FCAS
Batteries (1)
Aggregation
Network Support
Large central Medium/High Medium Medium/High Medium
Cont./Reg FCAS
Battery System
Aggregation/NEM
(2)
Same as option 1 with addition

Advanced Medium Medium/High Medium Low/Medium
of islanding network support
Grid-Connecte
and aggregation
d Microgrids
proportional to DER
(3a)
Same as option 2 with addition

Advanced High High Medium/High Low
of islanding network support
Grid-Connecte
and aggregation
d Microgrids
proportional to DER
(3b)

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PRICE
Aggregation
Targeted BTM Low Low Low High
BTM Savings
resilience
(Simple
Microgrid) (4)
Legend High: > $5M Low/Medium/High Low/Medium/High rankings are Low/Medium/High rankings
Medium: $500k to $5M rankings are relative to relative to other options as they are are a measure of how
Low: < $500k other options dependent on the size of battery repeatable/upgradable
and associated equipment an option is relative to
others
* Price will vary depending on the number of substations targeted to meet objectives

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PRICE
The community objectives outlined above would be well targeted, by an advanced
grid-connected microgrid (option 3b). This solution is recommended to be delivered in
stages/tranches with the initial activity being the installation of an MV centralised battery with
grid forming capability. This should be supported by an orchestration platform integrated with
networking monitoring and control signals as well as backup generation to manage peak loads
to provide islanding capabilities in the event of outages.
The MV BESS represents a more elegant initial building block when compared to using LV
batteries due to the simplified nature of locating a single site for an MV BESS. This is opposed
to finding locations for multiple LV BESS units which need to be deployed within community
neighbourhoods – requiring more rigorous community buy in and potentially increasing
opposition.
Over time as battery and other technology becomes cheaper and the community strives for its
ambitions of 100% renewable energy, the diesel capacity could be replaced by additional
batteries or larger renewable energy generation assets. Additionally, new DER being installed
could also be integrated with the existing microgrid technologies.
As outlined in the table above:

- Option 1 does not meet the full suite of technical objectives outlined – namely the ability
to provide reliability for shorter-term outages and resilience against emergencies and
longer-term outages. As a building block for an advanced microgrid (option 3a), a
network of LV batteries represents a solution more difficult to implement compared to an
MV BESS for a similar coverage.
- As a standalone solution, option 2 is not suitable as a long-term strategy because it
does not provide resilience against long-term outages and may only have limited
islanding abilities. When used as a building block for an advanced microgrid and paired
with backup generation, it represents an achievable first step.
- Option 3 meets all the technical criteria outlined in this report and is the preferred
solution. 3b is preferred as an option to 3a as the footprint of an MV battery requires
less engagement and buy-in from the community and is potentially easier to locate than
multiple LV battery installations.
- Option 4 on its own is not suitable because the reliability and resilience benefits it offers
to the community are limited to certain key areas and locations. As a standalone
solution this does not meet enough of the technical objectives to be considered a
suitable solution.
SOS BESS [0] APOLLO BAY NEIGHBOURHOOD BATTERY

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4.4.1. Grid Scale Battery Energy Storage System
As discussed above, an advanced microgrid would meet the technical objectives outlined in this
report. A centralised MV battery would represent a valuable first stage and when supported by
additional hardware and generation backup, it meets three out of four community objectives.
As mentioned in the previous section and when the full suite of community objectives is
considered, the MV BESS represents an ideal initial building block.
Targeted behind the meter generation and storage installations could also be considered to
protect vital community hubs in the case of longer network outages and emergencies.
As Marengo exists on a separate feeder to Apollo Bay and Skenes Creek, a central grid scale
battery energy storage system would not be able to service the Marengo community.
Addressing the needs of Marengo should be the focus of future investigation and may comprise
similar recommendations covered in this report.
A summary of how the proposed solution meets the technical objectives is outlined in the table
below.
Table 13 - Technical objectives evaluation
Problem Feature Solution

Reliability Short term, immediate An appropriately sized MV BESS would
response backup; be able to backup for outages around
Islanding capabilities the 2-hour mark in the worst-case
(network management) scenario (peak demand).
System would be able to island with

the necessary Energy management
device.
Resilience Dispatchable generation; An MV BESS on its own would not be
Islanding capabilities able to provide extended outage
(network management) backup, however, generation backup
Sufficient backup and/or would be able to assist in the short
generation capacity to term. This could be replaced over time
with renewable generation.

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supply the town for extended
outages Targeted BTM resilience for key sites
could also support the community in
the event of an emergency. This
solution could be deployed in the short
term as the overall advanced
microgrid is being developed.
Grid LV Energy storage, or An MV BESS would create local
capacity demand management demand during the day, soaking up
constraints excess solar generation and using it to
address peak demands in the
evening. This would primarily address
any whole town MV constraints but
would unfortunately only have minor
benefits for LV constraints that cause
residential export limits.
Renewable Energy storage, An MV BESS would support
hosting network management development of an advanced
capacity microgrid which would allow the
community to realise its ambitions for
100% renewable energy.
4.4.2. Islanding
As discussed in Table 13, an islandable battery allows the community to achieve two of the four
technical objectives (reliability and grid capacity constraints) outlined by S.O.S and the Apollo
Bay community. However, there are some key challenges with this approach to be considered.
Firstly, a third-party may not gain any additional benefit from an islanding arrangement and
therefore would be less supportive of the extra costs and responsibilities – which would add to
the need for a portion of funding to be covered by grant funding or the community. This
functionality would need to be addressed with any third-party owner, likely during the tender

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process. This can also be partially mitigated by entering into network support agreements with
the DNSP to share the benefits of islanding enablement.
An islandable battery would also require significant negotiations with the DNSP, Powercor, to
introduce islanding capability into their network operations. The support from the DNSP is a key
requirement since enabling islanding will need their involvement for many activities including
but not limited to distributed feeder automation integration and protection coordination, control
room operations, field procedures, communication/system integration and connection support.
A battery operating in island mode would also require negotiations with the third-party owner.
Should the DNSP be hesitant to accommodate an islandable battery on their network it is

possible for the project to progress with a battery that has future islanding capabilities.
The inverters selected and the design of the battery solution (i.e. inclusion of controller,
requisite protection system) should ensure that the system can be capable of islanding a
portion of the network with minimal augmentation in the future.
The full islanding capability can be realised at a future stage when Powercor expresses their
interest in this functionality and will require working together with them. The main drawbacks
with this approach are that the project may have to redo islanding studies, protection studies
and generator modelling and this would add extra inefficiencies into the project. This approach
is additionally reliant on the future plans Powercor has and their interest in the initiative.
However, the main benefit of this approach is that you can progress the project without it being
held up by negotiations with Powercor. Similarly, the initial CAPEX may be reduced with such
an approach.
Another final option could be to progress with a battery without any future islanding capabilities.
This would be the option with the lowest CAPEX and would not require coordination with
Powercor. This is generally not recommended as it does not achieve any of the technical
objectives outlined by the community and any future work to retrofit the battery to become an
islandable asset would be prohibitively costly.

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4.4.3. Future steps
Advanced Microgrid
In order to unlock the full value of the initial BESS building block, diesel backup generation and
an energy management platform would be recommended from a purely technical position to
allow the BESS to island the town in the case of a network outage and act as an advanced
microgrid. Over time as battery and other technology becomes cheaper and the community
strives for its ambitions of 100% renewable energy, the diesel capacity could be replaced by
additional batteries or larger renewable energy generation assets. The energy management
platform can also play a role in orchestrating the DER assets in town to better optimise the
operation of the microgrid when islanding. Further development in order to better service the
technical objective (e.g. protection against longer outages, better resilience for emergency
situations and a higher renewable energy hosting capacity) could be delivered in future stages
outlined below.
Advantages & benefits:

- Would allow the community significant progress to their 100% renewable ambition;
- Would allow the whole community to operate in the case of a sustained network outage;
- Optimises integrated DER assets installed within the microgrid area.
Drawbacks & challenges:

- Very high cost associated with an advanced microgrid;
- Would require backup generation such as solar & diesel;
- Individual DER installations will have additional integration costs for any orchestration;
- The benefits gained from such an approach may not justify the large investment
required, given there would only be a handful of days each year where the battery
would operate in an islanded state for an extended period of time.
The layout of the three areas of interest (Apollo Bay, Skenes Creek, Marengo) has been
reviewed in relation to an advanced microgrid. The consequent size of a microgrid covering all
three areas would be very large and potentially detrimental to the operation/resilience
operations of the islanding microgrid. It is, therefore, recommended that the microgrid is only
applied to Apollo Bay which has the highest number of connections and includes a large
amount of commercial and essential service sites. For reference, Skenes Creek is
approximately 11% and Marengo 13% of the load of Apollo Bay.
During emergency events, residents from Skenes Creek and Marengo, including in the
surrounding areas, not covered by a microgrid can congregate in Apollo Bay. If it is desirable to
have a similar central microgrid solution for Skenes Creek and Marengo then a separate

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microgrid is recommended to be constructed. Targeted behind the meter resilience and
Stand-Alone Power Systems could also be considered for these areas.
Given that resilience was high on the community’s original objectives, a more cost effective,
albeit less comprehensive approach may be to employ targeted behind the meter resilience as
outlined in 4.3.4 and stage 3 below.
Future stages to achieving an advanced microgrid:
Stage 1.5 (optional):
If S.O.S and the Apollo Bay community decide to pursue a battery with future islanding
capabilities instead of full islanding capability on installation, stage 1.5 would include engaging
the DNSP and/or the third-party to operate the BESS in islanding mode. As previously
discussed this would progress the community on its path to 100% renewables and provide
reliability in the case of network outages.
Alternatives to this approach could include the update of behind the meter assets as outlined in
stage 2 below.
Stage 2:
Could involve a rollout of behind the meter generation, storage and back-up for targeted
essential services, this would begin to improve the community’s resilience in the face of
longer-term outages and emergencies such as bushfires without the high capital cost of
converting the town into a full microgrid. The second stage would include the following
advanced microgrid components:
- Essential Services Systems – Solar & Storage with Diesel Generator Backup;
- Businesses (Commercial and Industrial (C&I) or Small Medium Enterprises (SME))
Solar & Storage Systems;
- Residential Solar and Storage Systems.
Approaching network resilience like this would represent a cost-effective initial step to making
the community more resilient.
Note that this approach can be pursued prior to stage 1 / 1.5 provided that allowances are
made for the installations to have future microgrid integration.

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Stage 3:
If the decision is made to pursue an islandable battery and the Apollo Bay community seeks to
build on a successful implementation, stage 3 could form the final step of the advanced
microgrid, allowing the town to become islandable for extended periods of time. This step would
include the following components:
- Inclusion of co-generation (e.g. wind and solar farms);
- Further development of energy management platform to optimise DER orchestration;
- Electric Vehicles (EV) Charging Stations (optional);
- Demand Management.
4.5 System Design

Table 9 below outlines the size of the MV Centralised BESS representing the initial building
block of the advanced microgrid. The battery component system was sized to be capable of
providing full backup power to the area for a duration that would cover most sustained outages,
without becoming cost prohibitive, or too technically challenging.
The following preliminary specifications for the central MV battery are recommended based on
a high-level analysis of the available 30-minute interval data for the 2019 calendar year
provided by Powercor.
Table 9 – BESS and generator sizing
Apollo Bay
Centralised MV BESS Inverter Capacity 5MW
Centralised MV BESS Storage Capacity 10MWh
* A 4.95MW solution would avoid additional connection/generator requirements at minimal
increased supply shortfall risk.
Per table 9, the battery has been sized to have a storage capacity equivalent to at least 120
minutes of maximum load for the worst-case scenario – i.e. maximum demand for a 2-hour
period during the 2019 calendar year data. Actual backup time will vary due to a range of
circumstances such as the current demand and load during the outage, the operational
agreements for the battery, as well as the battery’s state of charge and other existing
generation.
The inverter capacity of the battery was modelled on the maximum power demand extrapolated
from the 30-minute energy usage data for the 2019 calendar year. Storage capacity was

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modelled to meet the maximum demand recorded over a two-hour period in the 2019 calendar
year. A de-rating factor of 20% was applied to the inverter capacity and a 60%* de-rating factor
applied to battery size to account for factors such as:
- Voltage network requirements;
- Power Factor;
- Diversification of load requirements (data based on 30-minute energy intervals);
- Temperature rating;
- Battery Degradation over 10 years;
- System Efficiency;
- Area Demand Growth;
- Depth of discharge.
A primary driver is battery degradation over 10 years, other factors mentioned above also
contribute to degradation. Due to this de-rating, the amount of backup capacity at the beginning
of life is longer than 2 hours, as mentioned above. This degradation can also be addressed with
the inclusion of battery replacement or upgrade plans instead of having a larger size at
installation.
4.5.1. Solar Generation
For an advanced microgrid operation to operate in a sustained network outage (such as in the
case of a bushfire) an MV battery would need to be supported by local generation. A mix of
solar generation and diesel backup would be the most economic mix. A 1.5MW sized solar
farm would be sufficient to charge the battery system within a day of operation during the
summer half of the year.
4.6 Site Selection
A list of shortlisted sites was identified by S.O.S, which include:

● DELWP - Barham River streamside reserve/crown land adjoining Barwon Water’s
Apollo Bay basin site (Barham River Road) – ‘Site 1’
● Colac Otway Shire - former Marengo landfill (Roberts Road) - ‘Site 2’
● Barwon Water Marengo Basin (Ferrier Drive) - ‘Site 3’
● Barwon Water Apollo Bay Water Reclamation Plant (Montrose Avenue) – ‘Site 4’

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Of the shortlisted sites identified by S.O.S and outlined in further detail in Appendix D, from an
electrical network perspective:
● Site 1 represents the most ideal location for the proposed battery. The nearby
connection to the 22kV network appears to be part of the ‘network backbone’, which is
more likely to have a larger network capacity and therefore has a higher likelihood of
being able to accommodate the full output of the generating system.
● The nearest connection points to sites 2 and 3, as well as site 4 all appear to be spur
lines which are less ideal to connect the proposed battery to. While these locations may
actually have the same conductor type (and therefore network capacity) as the
backbone, there is a chance that the spurs have reduced capacity and so will more
likely require additional line upgrades in order to enable the connection of significant
generation capacity. Similarly, sites 2 and 3 appear to be in proximity to the feeder
supplying Marengo (CLC003) and would not be adequate for a solution targeting Apollo
Bay and Skenes Creek (CLC013).
● Further actions during detailed design, regarding the location of the proposed battery
should include confirmation of the connection capacity of the locations in order to
determine the extent of any network upgrades that may need to occur to enable the
generation connection.
Of the shortlisted sites outlined above, from a land use and planning perspective:
● Site 1 - The Colac Otway Shire Council will need to be engaged to discuss the
construction of the BESS on land managed by them. As the land is still classified as
crown, direct purchase or easement/lease may not be possible, however, a licence
could be. As Figure 5 above shows the available land is approx. 73m wide providing
plenty of room for the footprint, however, the land does gently slope towards the south
which may require benching to be undertaken.
● Site 2 - Colac Otway Shire will need to be engaged to discuss the construction of the
BESS on land managed by them. As the land is still classified as crown, direct purchase
or easement/lease may not be possible, however, a licence could be.
● Site 3 - Barwon Water will need to be engaged to discuss the construction of the BESS
on land managed by them. Powercor may also need to be engaged if the proposed
works encroach into their easements, although consultation with Powercor will be
required regardless of site choice.
● Site 4 - Barwon Water will need to be engaged to discuss the construction of the BESS
on land it owns.

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4.6.1. Connection & Protection Requirements
All of the proposed sites exist on the same feeder of the Powercor network and will be subject
to similar DNSP requirements for sub 5MW generation connection. This includes the
requirements detailed in the ‘Customer guidelines – High Voltage Distribution Connected
Embedded Generation’ and ‘Sub 5MW Generator Performance Standard Guideline’ on
Powercor’s connection page. Additional/adjusted requirements may be stipulated by Powercor
based on the network conditions at the connection point, such as additional control schemes to
accommodate upstream events on the network (faults, underloading, overloading, etc.).
In addition to the above, in order to enable network islanding, further control and protection
requirements will need to be in place on site. These exact requirements will be determined in
detailed discussions with the DNSP but can include things such as:
- Islanding allowance signal to DNSP to ensure the system doesn’t island by mistake;
- Upstream Synchronization signal to allow reconnection to the network;
- Additional site status integration with DNSP systems;
- 22kV Neutral-Earth switch on site that closes during islanded operations;
- Additional set of protection and control settings for islanding operation;
- Protection settings to accommodate fault conditions during islanding.
4.6.2. Network Constraints
The exact network constraints (and subsequent network support potential) on the above sites
will require further engagement with the DNSP to determine. However, based on network
engagement provided by S.O.S for another site in the region, various high-level conclusions
can be determined on the potential for a large battery connection in this region. This analysis is
done for information purposes only and does not replace the detailed discussion required with
the DNSP for determining what’s possible and required for a new connection.
The information provided by S.O.S had the following connection feedback:

- Colac (CLC) zone substation isn’t constrained;
- Upstream terminal stations from CLC likely aren’t constrained;
- The connection between CLC and upstream terminal stations may experience thermal
constraints at times for generation;

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- The CLC Feeder does not have 2.5MW of charging capacity. 1MW or less of charging
is recommended;
- The CLC Feeder does not have 4.95MW of generation (ie. export) capacity. 2.5MW or
less of export is recommended;
- Network augmentation may be required to address voltage stability;
- Approximately 10km of line augmentation required for 2.5MW of export;
- System studies required to confirm the above;
- Feedback is specifically for distribution network.
The capacity limitations mentioned above would benefit from further discussion to determine
the methodology utilised. Although static charging limits have been provided in the feedback, it
is noted that when assessing the load profile of Apollo Bay, it greatly varies throughout the day
and seasons (reaching a maximum over 4MW at its highest). This implies that the 1MW limit
that is mentioned may be based on worst case scenarios that don’t accommodate the actual
operation profile of a battery. This is similar for the generation, however, in reverse and also
relates to how much line augmentation it’s estimated is required.
While further discussion is still required to clarify the above, it is apparent that any battery
system that is installed will benefit from a control system that is more extensively integrated
with the DNSP. When combined with the flexible capability of a battery, it provides the
possibility of maximising the battery operation while also potentially supporting the network at
the same time. One example of this is that the loading or availability of the feeder can be a
DNSP input into the site control system that would then ensure that the battery doesn’t
exacerbate any feeder constraints. This kind of integration/agreement with the DNSP can also
go a step further, where the battery can operate to help alleviate network constraints under a
network support agreement with the DNSP.
It should also be noted that for a system to be able to island Apollo Bay, it is not necessarily
required for all upstream constraints to all be addressed since when islanding, only the ‘local’
network remains connected. However, it is greatly beneficial to have fewer constraints
upstream to allow the battery to more optimally operate during grid connected BAU.

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5. Community Engagement
At the time of this report, S.O.S. and Mondo have collaborated on a community engagement
strategy which has focused on acquiring feedback and buy-in from the local community of
Apollo Bay, Skenes Creek and Marengo on two key issues. The first of which involved
determining what were the most important issues facing the community in terms of their local
energy supply. This information was used to help determine the technical solution proposed in
this feasibility study. The second engagement involved determining community sentiment
towards the various ownership structures available to a neighbourhood battery given the
various risks and benefits of each model.
Future community activity engagements will focus on knowledge sharing through community
town hall meetings, where S.O.S. and Mondo will provide project updates and address any
questions or concerns that the community may have on the proposal.
With regards to the first phase of community engagement, the residential and business
community were asked to rate their preferences for which technical objectives were most
important. The residential community rated ‘100% renewable’ then ‘reliability’ as more
important than ‘resilience’ with ‘increased capacity for solar’ a last priority. The business
community provided similar results, however, rated ‘reliability’ as slightly more important than
‘100% renewable’.
For the second phase of community engagement, the results pointed to a preference for a
third-party owned model to operate the battery.
Refer to appendix F for a further description of the community engagement including key
results from both stages.

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6. Business Model
6.1 Ownership Structure
In general, for the Apollo Bay neighbourhood battery, three possible ownership structures could
be considered: community owned, a joint venture agreement or third-party owned. For further
information on each model refer to appendix C.
Ownership/Revenue Summary
The revenue that a battery can obtain depends on the operations and agreements it has in
place. The ownership model determines the distribution of benefits and responsibilities. A
summary of the different ownership structures challenges and benefits are in Table 14 below.
Table 14 - Ownership structures, benefits and challenges
Ownership Benefits Challenges/risks

structure
Community - More say in the battery operation; - Exposed to commercial/market risks;
owned - Community can directly benefit - Requires high capital contribution;
from revenue generated by - Ownership responsibilities (operations,
battery operations; maintenance, etc.)
- Reliability can be better guaranteed
Third-Party - Community is exposed to less risk - Getting operational changes

Owned and still benefits from any reliability proposed/implemented;
improvements system is set up to - Potentially less input into System design and
provide; operation;
- Third party is responsible for owning, - A third-party will have expectations of a return
operating and maintaining the on investment
battery
Joint Venture - Community is exposed to less risk - Competing interests;

than sole ownership - Can be a difficult relationship to manage;
- Community is still exposed to risk owning the
asset;
- JV partner will have expectations of a return
on investment

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It should be noted that any third-party owner or Joint Venture partner will have expectations of a
return on their investment.
Given the feedback gathered from the community engagement initiative on ownership
structures and the benefits and challenges outlined in Table 14, it is recommended that S.O.S.
adopt a Third-Party ownership approach. Given the lack of community appetite and inherent
risk with a community owned and joint venture approach, as well as the lack of proven
examples for successful projects from which to draw upon, a community owned, or joint venture
approach is not generally recommended.
A third-party ownership model exposes the community to the least amount of risk. Whilst there
is a risk that the third party and community’s objectives won’t be aligned, this can be mitigated
through negotiations and a tender process.
6.2 Key Parties
Within the ownership structure and business models, there are a number of key stakeholders to
consider, these include:
The retailer: responsible for the relevant market settlements of the costs.
Network Operator (DNSP): Powercor is responsible for the operation, maintenance and
upgrade of all physical network assets upstream of the customer connection point. In addition,
this may include the revenue-grade metering of the neighbourhood battery in which case,
Powercor would also be responsible for provision of the meter data to a retailer. To enable a
connection to the network, Powercor is responsible for outlining the connection process and
any technical requirements that must be met in order to connect the asset. Should network
islanding be enabled for this community then Powercor will need to coordinate their network
assets with the battery to allow safe operation as well as potentially upgrading their network
and processes to suit the new mode of operation.
Asset owner: This is the owner of the MV battery. This will either be a third party or the
community itself and depending on the ownership model chosen, the owner may be separate
from the operator of the battery.

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6.3 Project Costs & Economic Assessment
6.3.1. Model Inputs and Assumptions
The total project costs include capital and operational expenditures over the design life of each
solution package. The model is based on the following assumptions and exclusions:
Assumptions
- Cost estimate accuracy of ± 30%
- The system configuration is only indicative
- Design life for the MV battery is 15 years
Exclusions
- Construction specific costs not included beyond the +/-30% margin
- No allowance has been made for environmental studies
- No allowance has been made for additional network connection works
- No allowance has been made for permits or planning complexities such as discovering
cultural heritage on site.
6.3.2. Economic assessment
An indicative scenario analysis has been developed for this service and is based on the general
cost assumptions as provided in above and on the technical system descriptions provided in
Section 4 of this report.
The analysis is an indicative cash flow modelling exercise and does not take into consideration
the requirements and commercial positions of the parties involved which may influence items
such as estimation of fixed and variable revenue streams, pricing of risks, return expectations,
offtake agreements etc. A detailed assessment would require further consideration to such
variables and potentially a comprehensive market sounding and/or procurement exercise for
greater accuracy. It should also be noted that this revenue stack is accessible regardless of the
ownership structure.

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With regards to the areas for funding, three contribution components should be considered:
- Government funding grants which could constitute up to 49% of the project and would
increase the likelihood of third-party funding. Government grants would be required to
provide funding that is not subject to an internal rate of return, usually expected by a
third-party investor. Funding has been included in the NPV assessment. Government
funding options are considered in section 10.4.4;
- Potential DNSP contribution. Given this is highly variable it is not included in the
modelling. This option is evaluated in more detail in Appendix A;
- Third party or community funding for the remainder, dependant on the ownership model
chosen by the community.
The revenue and cost (CAPEX/OPEX) were modelled with a sensitivity analysis using the
determined most likely scenarios. The outcome is shown in the table below. The NPV was
modelled assuming a government funding contribution of 39%. Note that the results below
exclude the costs to make the battery fully islandable but includes components to make the
battery island-ready for the future. A solution package cost summary can be found in Appendix
H.
Table 15 - Project financial metrics
Metric Name Results

Total CAPEX $9,900,000.0 - $18,000,000.0
Total Revenue $7,400,000.00-$13,700,000.00
Project NPV (IRR of 8.65%) * -$1,700,000.00 to $400,000.00
* Modelled with inclusion of government funding at 39% of project cost.
Based on the financial analysis there is a high likelihood that there will be a gap in the
commercial case. This gap refers to the shortfall in revenue created by the project compared
with the upfront and ongoing costs of the battery. The battery system is likely to be not
financially viable and would struggle to attract third party owners and investors without
additional government funding.
6.3.3. Recommendations
Given the likely shortfall, a list of possible next steps or actions to make the project financially
feasible may include the following:

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Reduce the size of the system
Reducing the size of the system to reduce capital and operating costs. LV batteries may be
considered here, these would realise many community benefits, such as acting as a solar
sponge, and reducing outages on localised areas of the network, as discussed in section 4.
These could be complemented with targeted behind the meter resilient backup systems on
sites that are deemed essential services or hubs for emergencies where people without access
to power can shelter in the event of network outages and emergencies such as bushfires.
Seek grant funding to close the gap

Possible avenues for funding could include:
- RAMPP (Regional Australia Microgrid Pilot Program) funding from ARENA;
- DELWP funding;
- Risk and Resilience Grants program (Energy Management Victorian).
Delay the project

Consider delaying the project for a number of years until the cost of lithium-ion batteries has
reduced. This option would allow the project to be financially viable in the future whilst
maintaining the same technical specifications. Whilst the cost of lithium-ion batteries increased
for the first time in 2022 due to supply chain issues and increased demand, they are still
predicted to reduce in cost over the coming years.
Quantify the value of reliability for the community

The community could quantify the value put on improving the reliability of the network which
would improve the economic assessment of the project.
Factor in impact of possible future scenarios

Possible future scenarios may improve the revenue potential of the battery. These would
include further economic analysis to factor in the likelihood/risk of occurring:
- Introduction of an emissions trading scheme. A future government action may be to
introduce an emissions trading scheme. This would improve the revenue potential of
the BESS as it would increase the amount of renewables on the grid which would in
turn increase the need for peaking support (support around the “peak” times, usually
occurring in the early evenings, or at the tail of the solar ‘duck curve’);
- The extension of the Renewable Energy Target would have a similar effect to an
Emissions Trading Scheme.

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7. Project Delivery
7.1 Project Delivery Team
The next immediate action with regards to project delivery should be the incorporation of a
project team to set up the project or engage an Engineering and Procurement Contractor (EPC)
to run the project on behalf of the community. An expanded version of the whole delivery model
should be provided during the delivery stage, with further details of delivery partner resources
and details of key personnel.
7.2 Delivery Solution Summary

Since this feasibility report provides an overview of the overall delivery based on a preliminary
design, there are various aspects that would require a step further into detail/tender design,
community engagement and market testing to refine the delivery approach. Overall, the
recommended delivery approach is summarized into the following stages:
Figure 3 - Delivery Solution Summary
Incorporate project team (1-3 months)

● This phase commences after the approval of the feasibility report.
● Incorporate a stand-up project team or go to an EPC who runs the project on behalf of
or in partnership with S.O.S.
● Additional funding should be sought here in order to carry out the preliminary works.
Preliminary works (3-6 months)

● This phase commences after the project team has been incorporated.
● Aimed at refining the business case by stepping further into tender design for the
neighbourhood battery.
● Provides an opportunity to deep dive into feasibility, market testing and community
engagement before committing to a large expenditure approvals.

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● At the end of this phase, project should be in a shovel ready state, i.e. groundwork is
done so project can go ahead.
● Activities should include:
o Detailed cost estimation with +/- 10% margin
▪ Market pricing test
▪ Tender documents and process

o Connection enquiries
o Initial stakeholder engagement
▪ Council
▪ CFA
▪ DNSP
o Site selection/confirmation
o Landholder lease agreements
o Technical Specifications
o Funding/Revenue investigation
o Business case and model development
Pre-Delivery (3-12 months)

● Business case finalisation and funding to be sought and finalised based on the
outcomes of the preliminary works for the rest of the project, this could include (but not
limited to)
o ARENA RAMPP (Regional Australia Microgrid Pilot Program)
o DELWP funding
o Risk and Resilience Grants program (Energy Management Victorian)
Execute (9-15 months)

● Implementation is estimated to be 12 months, subject to international supply chain
constraints
● Detailed Design
● Procurement
● Development Application
● Connection application and studies
● Construction
● Testing and commissioning
● Fully functional MV battery at the conclusion of this stage

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Appendix
8.1 Appendix A: DNSP (Powercor) information
8.1.1. Network Support
Avoided network augmentation can be valued by the DNSP in the order of $0.2 - $1.0m per
Megawatt of capacity. This has been outlined as a reference, but not included in the economic
analysis. Total estimated Powercor revenue potential given the battery’s ability to provide 5MW
of avoided network augmentation is in the range of $0 – 1,350,00.00. Note that this is a
potential benefit to the network if network augmentation is required.
Powercor participates in the Service Target Performance Incentive Scheme (STPIS) which
encourages improvements in reliability by setting targets and penalties in relation to customer
outages. A battery that can island part of the network and help Powercor achieve its STPIS
targets could potentially be eligible for revenue equal to a portion of the avoided penalties.
The avoided penalties are up to $1.5M* based on 2020 outage data, although this benefit is
limited to the next STPIS target reset period and so cannot be claimed perpetually. This value is
outlined as a reference, but not included in the economic analysis. The total estimated
Powercor revenue potential given the battery’s ability to provide islanding for Apollo Bay is in
the range of $0 – $200,000 per annum.
*This was approximated using the following information:
- AER’s Powercor determination for STPIS 2021-2026
- AER’s Powercor determination for Revenue 2021-2026
- Apollo Bay outage data from 2020
- Powercor total customer count assumed as 870,000 from their DAPR
- Assumed that 20% of customers are connected to feeders classified as ‘Rural Long’
o This is the same as Apollo Bay

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8.1.2. Powercor tariff factsheet
8.1.3. Powercor Easement
8.2 Appendix B: Case Studies

Yackandandah7
Yackandandah is a 274kWh behind the meter battery instigated and owned by the local
community group Totally Renewable Yackandandah (TRY) and operated by Indigo Power
which is a community owned energy retailer. The battery is co-located (BTM) with a
privately-owned solar array. TRY is interested in transitioning their community to 100%
renewable energy and creating islandable microgrids within their community. The project was
installed as a pilot and TRY is currently investigating expanding their battery portfolio into the
MWh range. In order to meet the project costs, TRY applied for and received grant funding for
the battery from the Victorian State Government.
Phillip Island 8
The Phillip Island BESS is a 4.95MW/10MWh Lithium-Ion Battery and is owned & operated by
Mondo. Its primary role is to play a network support role, reducing the need for network
upgrades and maintenance on the AusNet network. It also participates in market activities (e.g.
FCAS trading and Energy arbitrage) to generate revenue/returns.
7
https://totallyrenewableyack.org.au/watts-happening/yack01-community-battery/
8
https://mondo.com.au/community/energy-hubs-and-projects/phillip-island-battery

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MAGS9
The Mallacoota Area Grid Storage System is a 1MWh BESS owned and operated by the DNSP
(AusNet). It was installed to provide power to the town during the frequent outages on the
feeder which is particularly prone to problems caused by storms, vegetation and wildlife.
Hornsdale Power Reserve (HPR)10

A 150MW/193.5MWh battery owned and operated by Neoen Energy. Neoen is a large
international renewable energy developer with multiple projects in Australia. HPR participates in
NEM activities through FCAS and energy arbitrage services. The Hornsdale Battery was able
to recuperate its costs fairly quickly, mainly through FCAS trading, by being a ‘first mover’ with
regards to a large battery on the NEM.
Alice Springs “Big Battery”11

A 5MW/4.6MWh battery owned and operated by Territory Generation (who are owned by the
NT government). The battery was funded by Territory Generation. The battery was primarily
installed for generation stabilisation, however, generates revenue by providing grid stability and
increasing the penetration of solar in the area. Vector Energy, a New Zealand Engineering firm
were responsible for designing, engineering, constructing and installing the battery as well as
taking responsibility for operations and maintenance. Modelling conducted by engineering firm
Aurecon has determined that the cost of the battery system is expected to be recouped within
four to five years due to efficiencies and savings.
MPower 1.5MWh BESS trial & BESS network12

A renewable energy developer, who is reportedly installing a series of 5MW batteries
co-located with solar farms after the successful trial of a 1.5MWh battery on the Endeavour
Energy network (NSW DNSP). The trial was designed to assist in reducing network costs,
augmenting grid supply and reliability to customers in the Illawarra region of NSW. The
batteries will be owned, operated and funded by MPower.
Gippsland BESS13
E22 is installing a 5MW/7.5 MWh Li-ion battery in Longwarry, VIC which aims to provide
AusNet with many network services in particular during periods of summer congestion. The
battery will be owned, operated and maintained by E22.
9
https://www.ausnetservices.com.au/en/About/News-Room/News-Room-2018/AusNet-Services-to-Install-
Gippslands-First-Big-Battery-at-Mallacoota
10
https://hornsdalepowerreserve.com.au/
11
https://www.pv-magazine-australia.com/2018/11/09/5-mw-battery-storage-launches-in-alice-springs/
12
https://www.mpower.com.au/post/landmark-battery-storage-project-reaches-major-milestone
13
https://www.pv-magazine-australia.com/2020/11/26/spanish-newcomer-e22s-5-mw-li-ion-battery-to-provi
de-network-services-in-west-gippsland/

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Yarra Energy Foundation (YEF)14
Yarra City Council established the YEF as an independent not-for-profit in 2010, and the council
remains the core funder. YEF partners with others to bring expert sustainability services beyond
Yarra’s borders, and are governed by an independent board of directors. YEF also leads the
Metropolitan Community Power Hub, funded by Sustainability Victoria. Among the number of
projects YEF has been involved in, the latest has been the installation of a 250kWh battery in
north Fitzroy.
8.3 Appendix C: Community Ownership overview

Community owned battery
Under this ownership structure, the community would own the battery outright. It is
recommended that a retailer be engaged to provide a route to market, renewable generation
exposure and customer management. This will assist to minimise the exposure of risk to the
community. As the owner, the community has direct input in how the battery should operate.
Within this ownership structure, 'direct equity' and debt are the key means of funding the asset.
Under the direct equity funding arrangement, members of the community would contribute
funds and thereby become shareholders in the battery. Alternatively, the community could loan
the funds to a community-run holding company where the holding company owns the asset (i.e.
the community members do not) and is liable to repay any loan(s) to the community at a point
in the future.
Company structures applicable to community ownership would include 'for' and 'not-for' profit,
co-operatives (e.g. several community organisations and/or the Chamber of Commerce form
the structure), public and private companies.
Example – Yackandandah (see section 8.2)
Third-Party owned
Under this ownership structure, a third party would own and operate the battery. Possible
third-party owners are outlined in Figure 4 below. During the project development, construction,
and operations, the community will be a key stakeholder providing input into the battery but
otherwise by default is not involved in the day-to-day operations (except passively experiencing
the benefits) unless an agreement is in place.
Example – Phillip Island BESS (see section 8.2)
14
https://www.yef.org.au/

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Figure 4 - Third Party owned potential structure
Joint Venture
Under this ownership structure, the battery would be partly owned by the community and partly
owned by a third party. This approach is generally not recommended because it exposes the
community to unnecessary technical and commercial risk. This option also raises potential
competing interests between the community and the third-party owner.
8.4 Appendix D: Site Selection

8.4.1. Planning permits
Planning permits – Battery over 1MVA
As of Amendment VC192 (16 March 2021) whereby Clause 72.01-1 of the Victorian Planning
Scheme was amended, the Minister for Planning is the responsible authority for new planning
permit applications for all energy generation facilities or facilities that store electricity of 1
megawatt or greater.
Applications will need to be made via DELWP, starting with a free pre-application meeting with
DELWP representatives and progressing through several stages until a permit is granted.
DELWP may seek additional information prior to approving the permit such as the following
(site dependent):
- CFA input;
- Environmental Input (Arborist/Environmental Consultant);

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- Offsetting of Vegetation;
- Aboriginal/Non-Traditional Landowner Cultural Heritage Impacts.
Vegetation removal permits which are normally handled by councils, will also be included in the
DELWP permit process, however, the same information which would be supplied to council will
need to be provided to DELWP.
The High-Level Desktop Assessment will, therefore, not cover permit triggers under the zone(s)
due. However, it will provide information and recommendations based on the overlays, native
flora/fauna and cultural heritage within the proposed works area.
On 30 May 2022, the Minister for Planning approved Amendment VC220. Published in the
Victorian Government Gazette, the notice relates to changes to the Victoria Planning Provisions
(VPP) and all planning schemes in Victoria to support the delivery of neighbourhood batteries
into the electricity distribution network by amending Clause 73.03 Land use terms. The
changes include ‘a battery connected to a section of the electricity distribution network
operating with a nominal voltage not exceeding 66,000 volts’ in the definition of ‘minor utility
installation’ and removal of ‘including battery storage’ in the definition of ‘utility installation’.
8.4.2. Shortlisted sites
The following table does not represent an exhaustive list of site assessment criteria.

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Table 16 - Site selection overview
CRITERIA: Site 1: Barham River streamside Site 2: Colac Otway Shire – Site 3: Barwon Water Site 4: Barwon Water– Apollo
reserve adjoining Barwon Water’s Former Marengo landfill Marengo Basin (Ferrier Bay Water Reclamation Plant
Apollo Bay Basin (Barham River (Roberts Road Marengo) Drive – Marengo) (Montrose Avenue)
Road)
Location: Located next to water reservoir. Relatively (c. 200m) close Close (c. 20m) proximity Close proximity to industrial
Distance/visibility/access/ Crown land. proximity to residential area. to residential housing. estate & treatment plant.
Noise 3km SW of Apollo Bay town. 0.5km west of Marengo town High visibility from main Private land.
centre. road.
Area: 0.40 HA total 3 HA total 0.53 HA total 0.36 HA total
Current Land Use: Open area next to reservoir. Degraded land – former tip Within Barwon Water’s Open area next to
Degraded? Not highly visible from nearest main site. Marengo basin site. wastewater treatment plant.
Opportunity cost road. Barwon Water says the area Not highly visible from main Identified area is largely Not highly visible from nearest
Complimentary uses potential identified on the map is mostly road, high visibility from occupied by water, main road.
neighbouring within the crown reserve, not access road (Roberts Road). power and Barwon Water says the area
uses/compatibility Barwon Water land - suggest communications marked is largely occupied by
focussing on the crown land, infrastructure. site roadways & accessways -
instead of Barwon Water land. Transmission Australia not likely to find space in this
infrastructure (satellite location. Could the private
dishes etc.) on site, area land (paddock) adjoining the
fenced off to the public. site be considered?
Barwon Water suggests a
limited area, if any, may
be available. Could the

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private land on the
opposite side of Roberts
Road be considered?
Planning & Environmental: PCRZ PUZ6 PUZ1 PUZ1
Zoning
Overlays (BF/Flooding/other?) Property is covered by Aboriginal A planning permit will be A planning permit will be
Cultural Heritage Overlay. A required to remove, destroy or required to remove,
Cultural /native veg assess? A planning permit is required
Cultural Heritage Desktop lop native vegetation, unless destroy or lop, native to remove, destroy or lop any
Assessment will be needed, with the said vegetation is dead or less vegetation. native vegetation (unless the
high likelihood of a full Cultural than 20% of the biomass is to vegetation is dead).
Heritage Management Plan be removed. A planning permit for
(CHMP) being required. As it is subdivision will need to An environmental
unlikely that the proposed works will A planning permit for be applied for with the walkthrough will need to be
disturb less than the 25m2 ground subdivision will need to be Colac-Otway Shire undertaken prior to works, due
disturbance trigger. applied for with the Council. This permit to the dual vegetation
Colac-Otway Shire Council. process is outside of the specific overlay and Clause
A planning permit will be required This permit process is outside DELWP planning permit 52.17 being present. The
to remove, destroy, or lop native of the DELWP planning permit for the works. follow up report will only be
vegetation. Unless the native for the works. needed if vegetation likely to
vegetation removal is less than 20% An environmental trigger a planning permit (as
of the biomass of the vegetation. An environmental assessment assessment will be per the overlays) is located.
will be needed, due to the needed, due to the
Works - As a permit is already being presence of native presence of native Changes to the EPA
triggered under the zone, a second vegetation and the multiple vegetation and the regulations in 2021 has
one won’t be needed under the vegetation specific overlays. multiple vegetation deemed it essential for
LSIO. However, DELWP will ask for specific overlays. purchases of properties to
extra assessments and information The property is a former mill undertake Soil Contamination
to be provided to them due to the and therefore is registered on Assessment(s) prior to

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risk of inundation on the land (see the Victoria Unearthed If this site is selected, a undertaking the purchase
decision guidelines). database as previously being Contamination and reporting any findings to
Subdivision - A planning permit will used as a landfill. As per the Assessment Consultant DELWP.
be required to subdivide the land, new regulations a will need to be hired to Therefore, despite nothing
the same decision guidelines will Contamination Consultant will undertake these showing on the database, a
apply. This permit process will be be needed to undertake a assessments. Contamination Assessment will
undertaken by the council, not Baseline Contamination need to be undertaken by a
DELWP. Assessment prior to utilising A Cultural Heritage Contamination Assessment
land. Management Plan will Consultant.
An environmental assessment will not be needed.
be needed, due to the presence of A Cultural Heritage Desktop There is no Aboriginal Cultural
However, it is advisable
native vegetation and the multiple Assessment will be needed, to Heritage Overlay within the
to limit impacts on the
vegetation specific overlays. determine what types of property, as there aren’t any
artefacts were found within southern section of the named rivers within 100m.
the registered location, if property. There is a Registered Artefact
they’re still there and what within 100m of the western
depth they were located at. boundary of the property, if
Best Case –The artefact is no works are planned in this area
longer there and/or the a Cultural Heritage Desktop
finding was minimal and the Assessment will be needed, to
works can proceed without a determine what the artefact
Cultural Heritage was and if there is a likelihood
Management Plan. of impact to the works.
Worst Case –The artefact is still However, works occurring at
there and the impact of the any other location will not
ground disturbance works require a Cultural Heritage
(which will be over 25m2) will Management Plan to be
trigger a full Cultural Heritage undertaken.
Management Plan.

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Topography: Open (mostly) area with close Open, cleared, elevated, Open, cleared, Open, majority cleared,
Orientation/shading etc. proximity to water storage basin. northerly aspects available. elevated, northerly sloped, northerly aspects
Land gently sloping towards south aspects available. available.
which may require benching to be
undertaken.
Ownership/Control/Interest? Crown land managed by local Crown land managed by Crown reserve for water Private land owned by
Public/private/status council (Colac Otway Shire Colac Otway Shire. Colac supply purposes, Barwon Water.
Purchase/lease? Council) Otway Shire will need to be managed by Barwon
engaged to discuss the Water. Barwon Water will need to be
construction of the BESS on engaged to discuss the
The Colac Otway Shire Council will
land managed by them. As Barwon Water will need construction of the BESS on
need to be engaged to discuss the
the land is still classified as to be engaged to
construction of the BESS on land land managed by them.
crown, direct purchase or discuss the construction
managed by them. As the land is Powercor may also need to
easement/lease may not be of the BESS on land
still classified as crown, direct be engaged if the proposed
possible, however, a licence managed by them. As
purchase or easement/lease may works encroach into their
could be. the land is still classified
not be possible, however, a licence
as crown, direct easements.
could be.
purchase or
easement/lease may not
be possible, however, a
licence could be.
Network Access: 22kV lines on site – High likelihood 22kV lines c.150m. south of site 22kV lines on site – High 22kV lines on site – High
transformer size/22 kV line constitutes a backbone. To – High likelihood line is a likelihood line is a spur likelihood this line is a spur and
distance/access be confirmed in detailed design. spur and is unsuitable for and is unsuitable for the is unsuitable for the battery
the battery arrangement - battery arrangement - To arrangement - to be
to be confirmed in detailed be confirmed in detailed confirmed in detailed design.
design. design

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Access/roads/Traffic: Excellent sealed road access Excellent sealed road access Excellent sealed road Excellent sealed road access
access
Overall footprint for technical Available land is 73m wide Would support co-located Limited space for Limited space for
solution providing plenty of room for solar PV array co-generation co-generation
footprint. Land does gently slope
toward south which may require
benching to be undertaken

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Figure 5 - Site 1: Barham River streamside reserve, adjoining Barwon Water’s Apollo Bay Basin (Barham River
Road)

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Figure 6 - Site 2: Colac Otway Shire former Marengo Landfill (Roberts Road), Marengo

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Figure 7 - Site 3: Barwon Water Marengo Basin (Ferrier Drive) - Marengo

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Figure 8 – Site 4: Barwon Water Apollo Bay Water Reclamation Plant - (Montrose Avenue) Apollo Bay
8.5 Appendix E: Features of an Advanced Microgrid

8.5.1. Central solar generation
Central solar system is a ground-mount fixed-axis solar system. While ground-mount solar in
the central system requires higher capital and significant space, it has minimal impact on the
community and relatively low operating and maintenance costs. It provides a renewable and
clean source of local energy for operations.

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8.5.2. Wind
Wind can be considered as an alternative, or compliment to central solar generation and may
reduce the need for additional storage, however, represents a higher cost and construction time
when compared to solar.
The generation profile of wind greatly reduces the storage requirements for achieving 100%
renewable targets that rely on PV and storage only. Although this would also be very beneficial
as a source of energy in an islanded network, due to the remote nature of wind installations
there is a chance any wind installation won’t be included in the islanded network backup area.
8.5.3. Generator backup
Generator sets are fully dispatchable and can deliver reliable energy when renewable sources
are offline or producing at less than required capacity, or when battery storage is low. They offer
high power density, the ability to follow loads, and provide inertia into the microgrid system that
can help with the operation of network safety and protection systems.
In order to supply the community during longer outages (>2hours), backup generation would be
required. Additionally, this can also support shorter outages (<2hours) where the battery charge
is in a reduced state due to operating commercially or providing network support.
8.5.3.1. Diesel
Diesel generation represents a mature and cost-effective technology that would be relatively
easy to deploy. This report acknowledges, however, that this solution may not be in line with the
community's 100% renewable aspirations. However, as the price of batteries and other
potential solutions such as hydrogen storage reduce, or as more solar PV systems are
incorporated into the community, diesel generation could be scaled back and retired over time.
8.5.3.2. Hydrogen
Hydrogen generators would represent a clean alternative to diesel generation and would be
compatible with a 100% renewable ambition for the community where green hydrogen is used.
The technology, however, is in its infancy and is not commercially viable at this point. As costs

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are reduced and the technology matures, hydrogen backup generators could replace diesel
generators over time.
8.5.4. Central System Control
The expected operation is that the solar panels will charge the batteries to ensure they have
the minimum required capacity. During an upstream outage, the microgrid will disconnect from
the rest of the network and form an island, the batteries will then supply the microgrid for the
duration of the outage, ensuring customers in town have access to electricity. If the outage is
for an extended duration, such as in the case of an emergency like bushfires, the generator will
kick in to supply additional power to the microgrid and other components in the microgrid will
orchestrate to ensure electricity for as long as possible. Supplied customers will be able to use
energy as normal for multi-day periods, with the exact duration depending on the available
energy storage and generation. The duration can also be extended if customers reduce their
energy usage or if sufficient demand management is in place.
As such, locations with an Advanced-Grid Connected Microgrid will supply electricity for a
sustained period if disconnected from Powercor’s Distribution network. Ideally, after the grid
power is back, Powercor is able to reconnect the microgrid back to the distribution network to
run as normal.
8.5.5. Microgrid Platform
The microgrid platform (powered by the Mondo Energy Management Platform as an example)
includes an Internet of Things (IoT) device (for example Mondo’s Ubi device) with edge
computing capability, cloud data store, customer portal and control for monitoring and
managing fleets of Distributed Energy Resources (DER) assets.
The Ubi platform acts as the brain of microgrid integration to ensure all controlled power
systems within the microgrid are orchestrated in a safe and efficient manner. Four major inputs
are proposed to feed into the microgrid platform, including energy market signals, Distributed
Network Service Provider (DNSP) Supervisory Control and Data Acquisition (SCADA) signals,
weather forecast and major network events. Based on a comprehensive analysis of received
information, the platform aligns to a pre-programmed operation mode at a microgrid level, then
decomposes the task to a lower individual power system level via the Ubi device.

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The entire control system operates dynamically via constantly collecting real time data from
both inputs and individual power systems through the Ubi device within the microgrid. System
alarms are triggered if critical measurements are close to or are over safe operating ranges of
the current mode. The system then switches automatically into another designed mode or can
be manually switched through human intervention to ensure reliable power supply. Over time
the logic of the Mondo platform will be enhanced and evolve to better manage microgrid assets
in the locations.
Figure 9 - Microgrid High Level Control Diagram Example
8.5.6. Essential Services Systems
An electricity power backup system for essential services is proposed to further increase
community resilience during extreme weather events. The advanced microgrid won’t be
available during a network outage when the outage duration has exceeded the supply capacity
of the central system or there is a network fault within the microgrid supply area that cannot be
isolated. Therefore, it is critical to install a power backup system for essential services such as
community centres, service stations, and first responder stations, enabling them to continue
their respective missions.

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Each back up system for essential services includes behind the meter solar panels, a battery
and a diesel generator and power inverters with islanding capability. This configuration enables
the system to contribute to network demand management in grid connected mode; and hold the
supply to critical load of the sites during sustained outages. The sites will be initially selected by
considering the nature of their services and a detailed site assessment for each location should
be further explored in the community engagement phase. Initial consultation will be conducted
with potential site owners to gauge owner interest and ensure there aren’t any obvious barriers
to implementation.
8.5.7. Business Solar & Storage Systems
Similar to essential services backup systems, solar and battery solutions are designed for
medium and large businesses to provide an uninterruptible power supply (UPS) during network
outages. These sites are selected to be able to act as hubs for larger amounts of people if
necessary and include sites such as colleges. Potential sites are identified, and initial contact
can be made in order to determine whether they would be open to accepting a battery backup
system.
8.5.8. Electric Vehicle Charging Stations
Electric Vehicles (EVs) will be a major feature in Australia’s emission reduction roadmap. Public
EV charging stations have been considered as critical infrastructure for future sustainable
societies. Therefore, this feasibility study includes EV charging stations as an option to
investigate within the design, not only to benefit EV owners but also to actively manage the EV
charging as a network demand management solution. The inclusion of EV charging stations
also increases community resilience by providing an additional source of fuel for community
vehicles that are not reliant on gasoline or diesel fuels. The energy storage built within the EV
charging station can not only stabilise highly fluctuated demand due to charging but also has
the potential to support local electricity networks during an emergency event.
8.5.9. Demand Management
There are many benefits in having residential demand management including enhancing
network stability, prolonging microgrid islanding time during sustained network outages, as well
as reducing customers’ energy costs during business-as-usual times. To deliver those benefits,
a number of demand management solutions have been proposed in this study. Demand

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management is expected to achieve the following outcomes through the use of a device such
as Mondo’s Ubi (installed at each customer’s premises) for orchestration:
- Reduce peak demand: When the customer’s residential controller receives a high
demand signal from the microgrid platform, it will reduce customer load such as hot
water systems and air conditioners via pre-programmed DRED control logic according
to Australian Standard 4755 or contactor control;
- Mitigate reverse power flow: in islanding mode, the microgrid central system must
shutdown if total microgrid demand is too much below zero (also known as the sign of
reverse power flow) when all batteries are fully charged;
- Load control (increase load): turn on a customer’s load such as a heat pump or hot
water system when the microgrid load is close to its minimum demand limit;
- Load shift: schedule heat pump or hot water systems to operate in the middle of the day
to harvest rich residential solar generation; and
- Dynamic solar curtailment: as residential solar is the only source of reverse power flow,
curtail residential solar export via the customer’s residential control device to reduce the
reverse power flow.
In order to utilise demand management, customers need to be engaged and there needs to be
an agreement made that outlines the permissions and extent of demand management at each
site. This is particularly important to better understand the customer's situation such as
expectation on usage and whether there are any vulnerable people on site that need to be
considered. In addition to the above, further demand management can be implemented by
contacting large energy users in town to enter agreements that reduce their operations upon
request to reduce the town load when necessary.
Examples of demand management proposed can include the following:

- Replacing electric hot water systems with heat pumps to reduce peak load and provide
load control;
- Installing variable solar curtailment on existing solar systems to reduce peak solar
output with a preference for sites with larger installed solar systems; and
- Installing additional load control where suitable to supplement solar curtailment.
Customers who participate in a demand management program will be able to opt in/out through
the project’s community engagement phase, however, this will be regulated by terms and
conditions in the participation agreement. Installing load bank in central system is another way
to manage reverse potential power flow – due to increased PV uptake - during islanding mode
if there is not enough distributed customer demand management system recruited. This is not
preferred due to the lack of additional benefits of installing a load bank, it does allow the system
to operate, however, the underlying excess energy issue isn’t resolved, any excess energy in

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the network will be wasted, and an available function of the microgrid controller isn’t utilised to
its full potential.
8.5.10. Residential Solar and Storage System
For customers who are outside of an advanced grid-connected microgrid, this solution offers
solar plus a battery system with islanding capability to keep customers on supply during
network outages. Interested customers can express their interests during the community
engagement process. Sites could be identified based on submitted EOIs and be subject to site
conditions such as roof conditions and shading. This option is not available to customers within
an advanced microgrid as their network is more resilient with central system installed.
8.6 Appendix F: Community Engagement

8.6.1. Key Stakeholders
A list of key stakeholders is provided below.
Table 17 - Key Stakeholders
Stakeholder
Colac Otway Shire
Apollo Bay Chamber of Commerce
Powercor
Southern Otways Sustainable
Great Ocean Road Health
Barwon Water
DELWP
8.6.2. Community objectives
The primary aim of the initial round of community engagement was to ascertain the most
important issues to the community that were to be addressed by the technical solution, from
both a residential and business perspective. The survey was also designed to identify priority
areas for outage protection and gather relevant demographic information, such as residential

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solar ownership. A QR code linking to the online survey was distributed via direct mail to 1083
post boxes and also conducted face to face at a number of community market stalls. The
survey was divided into two parts – one aimed at residents, and the other at local businesses.
With regards to priority areas during a significant outage, those identified by S.O.S were
backed up by the results of the engagement:
● 'Emergency services': (likely to be dictated by emergency authorities) but likely to

include, the Hospital including the Ambulance Station, CFA headquarters,
Telecommunication services, Barwon Water, Police;
● 'Essential services': Refuge centres (AB SLSC, Senior Citizens Hall, AB P-12 College);
● 'People Services': Supermarkets, Petrol Station.
With regards to the demographic makeup of the respondents, a high proportion of respondents
have solar, live locally, own their places of residence, are older rather than younger and think
achieving 100% renewable is important. This study notes that there are likely to be some data
correlations between these variables to consider. Those that had solar think solar exports are
important.
Even though it was prompted in the question, 44/80 responses (55%) nominated outages as a
challenge/issue but with a heavy proportion noting this as an annoyance rather than serious
(with notable exceptions such as the commentary around home-based medical equipment).
The businesses identified as key during a bushfire/extended outages were emergency/

essential services and supermarkets. Someone noted the hospital already has existing
back-up. Interestingly, petrol stations came up high on the list. This is useful if targeting any
funding for Behind-the-Meter business systems.
In terms of priorities for a neighbourhood battery, "reliability" and "100% renewable" were
identified as more important than "resilience" with "increased capacity for solar" an obvious last
priority.
Table 18 below summarises the responses gathered during market stall engagements and
were consistent with the results from the online surveys.

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Table 18 - Community's (residents’) feedback from four market engagements as at 1 March 2022 (142 separate
engagements)
TOTALS
Resilience Reliability Grid 100% renewable

Capacity
Preferences Votes Points Votes Points Votes Points Votes Points
First (4 points) 19 76 37 148 6 24 78 312
Second (3 points) 51 153 36 108 25 75 24 72
Third (2 points) 39 78 46 92 31 62 27 54
Fourth (1 point) 22 22 28 28 80 80 14 14
Total Points 329 376 241 452
The responses from the local business community were similar to the responses from the
residential community, with the key difference being that businesses were more likely to rate
reliability as the most important issue, with 100% renewable ambitions as a close second.
Table 19 - Community's (Business) feedback from online survey 22 April 2022
TOTALS
Resilience Reliability Grid 100% renewable

Capacity
Preferences Votes Points Votes Points Votes Points Votes Points
First (4 points) 11 76 19 44 5 20 19 76
Second (3 points) 16 39 13 48 15 45 12 36
Third (2 points) 14 22 11 28 19 38 11 22
Fourth (1 point) 12 13 13 12 14 14 14 14
Total Points 132 150 117 148
8.6.3. Ownership Structure
The primary aim of the second round of community engagement was to test community
appetite for the different ownership structures associated with a neighbourhood battery.

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The three ownership models outlined in section 6.2 were posed to the community, with the risks
and benefits clearly laid out for each model. The community was asked to vote for the
ownership model they preferred
The results were as follows:
Table 20 - Community feedback on ownership structure
Votes Market Stall
Market Stall Online Engagement

Ownership Structure Votes % Votes %
Third-Party owned 13 68% 14 35%
Joint-Venture 4 21% 14 35%
Community Owned 2 10% 12 30%
Also included in the responses for the ownership models was the following qualitative
feedback:
Third-party owned – The feedback on this model was that the community would need a
water-tight agreement with the 3rd party that the battery would provide for the community in the
areas required and that a reserve would always be left in the battery (it would never be fully
drained by the 3rd party) to cover for unplanned outages.
Community Owned - Both voters conceded this option would only be possible if the community
didn't have to pay for the battery. They were very vague about who in town had the smarts to
operate and maintain the battery, but the sentiment could be summed up as "we'll be right”.
Joint Venture - The vendor contracts should include an option at the 5-year mark where the
community can buy out the vendor. At this point we (the community) will likely understand what
we are capable of. This would need to include items to ensure the vendor could not gouge us
such as:
- Independent valuation of the vendors part;
- Payment options e.g. once off or over time;
Identification of any ongoing costs e.g. they will likely have cloud services for network
management and reporting etc.

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8.6.4. Town Hall
Once the feasibility study stage has concluded, Mondo will act as technical support assisting
S.O.S. for the planned Town Hall or community forum. The purpose of which is to provide an
opportunity to engage with the community and act as a knowledge sharing opportunity for the
outcome of the proposal at the heart of the feasibility study. The session should also aim to
cover questions raised by the community and informally gather community sentiment and
feedback on progress to date.
8.7 Appendix G: Accessible value streams from a Big

Battery
Within the set of wholesale revenue streams, there are two key markets: “energy” and
“frequency”. Energy represents the commodity of electricity described earlier and is
represented in the same way as electrical energy on a customer bill (though in much larger
units of measure), in ‘dollars per Megawatt-hour’ or $/MWh. In addition, there is a separate
market for frequency – in Australia the power system frequency is set at 50 cycles per second
(50Hz) and is governed by strict technical standards to maintain this at all times. To encourage
participants to play their part, the market has a mechanism to reward market players for
frequency stabilisation in the form of a price signal.
Aside from the wholesale market revenue streams, the remainder of the value stack is made up
of customer bill savings, reduced DNSP maintenance and upgrade costs and potential
off-market agreements with third parties. This is summarised via the example below and
outlined in detail in the subsequent section.

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Figure 10 - Asset Value Stack for BESS
8.7.1. Merchant energy
Excess energy from the storage solution can be sold on the NEM. It is expected that excess
energy will exist at various times of the day and throughout the year, for example in daylight
hours when customers cannot use all of their solar energy. This will then flow into the storage,
where there will remain a shortage of takers for this energy during the day. The excess energy
can either go to non-solar customers or the grid – the latter giving rise to participation on the
wholesale market.
Typical average prices in the Victorian pool of the NEM were around $46/MWh in 2021 or
around 4.6c/kWh15. For reference, a typical customer bill is about 20-25c/kWh for the usage
component.
15
AEMO NEM Data Dashboard

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8.7.2. Merchant (FCAS)
Essentially, the system frequency is balanced by quickly increasing or decreasing power output
(measured in Megawatts). The price signal described earlier applies a dollar value to each
chunk of power that is increased and/or decreased rapidly and is measured in ‘dollars per
Megawatt of change’ or $/MW. It is important to recognise the difference between the energy
($/MWh) and the frequency ($/MW) markets and units of measure. The frequency market is
known as ‘Frequency Control and Ancillary Services’ (FCAS).
The FCAS market is further segmented into the “contingency” and “regulation” markets, where
only the contingency market is considered within the scope of this report. Further, there are six
sub-markets within the contingency market but for simplicity, it will only be discussed as the
“contingency FCAS market”.
Participation in the FCAS market is considered to be a valuable opportunity for the energy
solution. In a similar way to energy prices, the Australian Energy Market Operator (AEMO) also
publishes FCAS prices on its website, although these are not shown in the ‘headline’ fashion
that energy prices are. From this data, a number of financial analysts formulate forward
estimates of what the FCAS price will do (as they do with energy prices). These forward
estimates enable Mondo to evaluate the FCAS opportunity for this project.
Capture prices are expected to be within the range of $1/MW to $12/MW.
8.7.3. Offtake agreement
The BESS could also sell electricity to a specific user similar to a Power Purchase Agreement
(PPA), where the purchaser (often called the ‘offtaker’) agrees to buy a percentage of the
electricity produced by the asset on an ongoing basis. This arrangement could also work in
reverse with the BESS acting as a buyer for a local community solar farm, thereby charging for
a reduced cost when compared to the grid. Potential offtakers include large-scale generators
and large industrial energy users like Barwon Water.
8.7.4. Network support (voltage and power)
Similar to FCAS (outlined above) as a service that is used to support the network but through
voltage, active power, and reactive power control. Agreements are made with the network

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provider to operate the battery in a certain manner upon their request or when the network
experiences certain constraints.
It is worth pointing out that Powercor has recently published (and can be expected to do so in
future years) an EOI for such network support services.
8.7.5. Energy usage offset
By storing and re-using excess energy from community solar PV, less energy is bought by
Apollo Bay customers from the grid. Not only does this positively contribute to the 100%
renewable goals of the community - it also provides a financial benefit. The difference between
the cost to serve customers’ energy from the battery versus the cost to buy from the grid
represents value that can be shared between the battery asset owner and the community. That
value sharing mechanism would likely be implemented in the form of a tariff - e.g. a localised
network charge.
8.7.6. Load shifting
A centralised battery would allow the community to avoid periods of peak energy prices -
typically around the early evening. The battery can either buy from the grid when prices are low,
or store energy from excess DER (or a combination of both), and feed back into the community
during peak pricing periods.
8.7.7. DER enablement (e.g. solar sponge)
Due to voltage and system strength issues, solar PV export (from businesses and households)
can be limited. A battery, or network of batteries would increase the amount of solar that can be
exported by the community and allow a higher penetration of DER within the community,
reducing the need to buy energy from the grid. DER enablement is strongest on the bus that
the battery is connected to. In this case it’s the MV with a lowered effect on LV.
8.7.8. Energy arbitrage
The term ‘arbitrage’ refers to the ability to buy a commodity from one market and sell into
another market at a premium within a short space of time, thereby exploiting a mismatch in
pricing between those markets. In the case of community energy, arbitrage opportunities are

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likely to arise intra-day where cheap (and/or free) energy can be obtained during sunlight hours
and sold during evening peak times. The battery facilitates this through storage of energy and
enabling the time-shifting of energy prices from morning to evening.
Arbitrage is applicable to wholesale trading, retail pricing and network tariffs.
8.8 Appendix H: Business Model

The business model ultimately governs how the storage solution is owned, managed and
operated from a commercial perspective. Common examples of business models are joint
ventures (JV) and build, own, operate and transfer (BOOT) arrangements.
Whilst there is more than one possible business model, these models will also apportion the
costs and benefits of the project. On the cost side, expenditures can broadly be categorised in
terms of capital and operating, fixed and variable. On the benefits (or revenue) side, these also
apply along with additional categories of revenue, known as “revenue streams”. Revenue
streams represent different types of income but importantly, the cost savings of various
stakeholders are also considered as revenue streams for the purposes of this project – e.g. bill
savings for customers. The collection of these revenue streams is also known as the “value
stack”.
Typical revenue streams for these types of projects mirror those of any other commodity
market, at a basic level revenue is simply price x volume:
● The commodity is produced and sold on a wholesale market where price is dictated by
market forces;
● Other commodity sales may be negotiated with a counterparty directly, this is known as
“over the counter” (OTC);
● Additional derivative markets may be used to complement physical commodity sales or
hedge against various market risks (e.g. currency movements). These derivatives often
take the shape of ‘futures’, ‘swap’ or ‘cap’ instruments.
In the case of this project, the commodity is clearly electricity and there is a wholesale market
for this product called the National Electricity Market (NEM). If the storage solution is sufficiently
large, it will be eligible to participate directly in this market and trade energy at a wholesale
level, alongside large coal, wind and gas generators. Clearly there are many other players

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between the wholesale market and end-customers – for the purposes of this study those key
players are the distribution network (DNSP i.e. Powercor) and the retailer (over 20 in Victoria).
In addition to the ownership models, there are a range of business models to consider for the
development and operation of an MV battery, these are outlined below.
BOOT – Build, Own, Operate and Transfer

Under this type of engineering contract, a third party would build, own and operate the battery
for a set amount of time to recoup costs, following which they would transfer it back to
community ownership.
Advantages
● Reduction in risk for the community by outsourcing to a third party;
● Potential to reduce upfront Capex costs;
● Makes the engagement more attractive to a third-party developer.
Disadvantages
● Third party would own and operate the BESS for a period of time;
● Community would have a significantly reduced input for the period of third-party
ownership;
● Risk that the third party’s costs are not recouped before the end of the asset life.
BOOM – Build, own, operate and Maintain

A third party would build, own, operate and maintain the BESS. This is the model associated
with a third-party ownership structure and shares the similar benefits and challenges as a
third-party ownership model. The key advantages and challenges are outlined below
Advantages:
● Reduces the risks (for the community) associated with owning and operating the
battery;
● Third party is responsible for owning, operating and maintaining the battery.
Disadvantages:
● May be difficult to enact operational changes proposed/implemented;

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● Potentially less input into system design and operation;
● A third-party will have expectations of a return on investment.
EPC – Engineering Procurement and Construction

This would accompany all ownership models, however, would lend itself most to a community
ownership model. A contractor would be responsible for all related engineering services, the
procurement and production of all necessary construction materials and parts, as well as
construction and commissioning. At the completion of the project the contractor would hand
over the neighbourhood battery to either the community or the third-party owner, depending on
the ownership structure.
Advantages
● Simple contract, turnkey product available to the community at the completion of the
contract.
Disadvantages
● Higher upfront cost (CAPEX) – would require grant funding or investors;
● If fully owned by community, exposes community to high risk during construction and
after completion;
● An ‘Owner’s Engineer’ would be recommended to manage relationship with EPC
Contractor.
8.8.1. Third-Party Agreements
Should the community decide on pursuing a third-party owned or operational model once the
MV battery has been completed, the following agreements/contracts would service to dictate
the revenue streams from the third party
Lease Payments/Annuities
A lease payment or annuities are regular payments, similar to rent, that are formally agreed
upon under a contract between the third-party operator and the community, granting the third
party the right to use the neighbourhood battery for a specified amount of time. A lease
provides the lessee with limited right-to-use without transferring ownership in return for
payment to the lessor.

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Service Level Agreement
A service level agreement (SLA) in this instance would be an agreement between the
community and the third-party vendor. The agreement would dictate the service that the
community would expect from the vendor including any penalties should the service not be
achieved. For the MV battery the SLA relates to the ownership and maintenance and would,
therefore, correspond with a third-party ownership model.
8.8.2. Revenue
The figures below represent a conservative estimate of the potential revenue from the modelled
value stack sources. This figure is considered a good estimate of potential revenue from the
BESS given the storage capacity. The exact configuration of the value stack may vary
depending on the intended use of the BESS, however, this would only represent minimal shifts
in overall revenue, as you will be reallocating capacity from one objective to another.
Estimated NPV revenue range from the modelled value stack (arbitrage including spot price
volatility & FCAS) for 5MW/10MWh: $7,400,000.00-$13,700,000.00.
It should be noted that avoided network augmentation is not a guaranteed revenue stream, and
may substitute only some, or none of the quoted.
Other value stack items, such as offtake agreements, have not been included in the economic
assessment because of the significant number of associated variables they introduce, without
providing more valuable insight into the financial viability of the project. These include, but are
not limited to customer bill savings, offtake agreements, and revenue from/generation of green
certificates. Decisions involving additional value stack streams, such as negotiating an offtake
agreement, can be evaluated in comparison against this “base case” scenario provided to
evaluate their value.
It should be noted that this analysis assumes that all of the capacity of the battery is used for
revenue generation on the market. If the owner of the asset decides to reserve capacity for
alternative use cases, for example the community reserving capacity for local usage, this will
impact the revenue streams from energy trading and FCAS participation.

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8.8.3. Solution Package Cost Summary
The capital and operating expenditure is estimated in the table below. Mondo is aware of
supply chain issues which may mean that the figures quoted below might change significantly
due to future price rises.
Table 21 - Project Costs
Item Cost (CAPEX) range Cost (OPEX) range

(p.a.)
Battery System Cost $7,400,000.0 - $13,800,000.0 $42,000.0 - $78,000.0
Charging and network Costs $130,000.0-$240,000.0
Balance of Plant $1,800,000.0 - $3,400,000.0 $9,000.0 - $16,900.0
Network Connection Cost $330,000.0 - $440,000.0*
Project delivery and management $400,000.0 - $600,000.0

costs
Total with contingency (5%) $9,930,000.0 - $18,300,000.0 $181,000.0 - $335,000.0
Required government grant $4,200,000.00-$6,900,000.00

funding (up to 49% of project)
* Note that this figure assumes the majority of the connection will be allocated as load connection costs
by Powercor and would be captured via network charges such as DUOS charges. This number could
increase dependant on the decision by the DNSP and may increase to $1-1.5M

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S.O.

S BESS ISSUE [1] APOLLO BAY 1/83

S.O.S BESS [1] APOLLO BAY

S.O.S BESS [1] APOLLO BAY

2.1 Neighbourhood Battery Feasibility Study 11

2.2 About Southern Otways Sustainable 12

2.3 About Mondo 13

2.4 Why Apollo Bay? 14

2.5 Definitions and Acronyms 15

3.2 Problem Outline 16

3.3 The Approach 17

4.1 Network Technical Information 19

4.2 Solution Selection Considerations 20

4.3 Technical Solution Options 22

4.4 Technical Recommendation 28

4.5 System Design 38

4.6 Site Selection 39

6.1 Ownership Structure 44

6.2 Key Parties 45

S.O.S BESS [1] APOLLO BAY

7.1 Project Delivery Team 49

7.2 Delivery Solution Summary 49

8.1 Appendix A: DNSP (Powercor) information 51

8.2 Appendix B: Case Studies 52

8.3 Appendix C: Community Ownership overview 54

8.4 Appendix D: Site Selection 55

8.5 Appendix E: Features of an Advanced Microgrid 65

8.6 Appendix F: Community Engagement 71

8.7 Appendix G: Accessible value streams from a Big Battery 75

8.8 Appendix H: Business Model 79

S.O.S BESS [1] APOLLO BAY

Table 1 - Key project data 10

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This report recommends the implementation of a 4.95MW/10MWh battery with islanding

The proposed solution would be able to:

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Project Costs and Economic Assessment

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Table 1 - Key project data

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2.1 Neighbourhood Battery Feasibility Study

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Lisa Deppeler - S.O.S

2.2 About Southern Otways Sustainable

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Mondo is an energy industry leader with expertise in metering, behind-the-meter energy

Phillip Island Community Energy Storage System (PICESS) - a large-scale 5MW/10MWh

DELWP Community Microgrids and Sustainable Energy Program (CMSEP) Development

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Such a population increase places increased stresses on the energy infrastructure –

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BOOT Build, Own, Operate, and Transfer

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3.2 Problem Outline

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3.3 The Approach

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