Off-grid projects are defined as those requiring a power supply above 10 kW and that are not connected to one of Australia's large-scale electricity grids: the National Electricity Market, the South West Interconnected System or the North West Interconnected System.

Most off-grid power supplies currently use diesel to generate electricity. But with diesel fuel prices forecast to continue rising, many off-grid projects are beginning to look to renewables as an alternative power supply.

In Australia, solar power and wind power are the most popular forms of off-grid renewables because they can be installed virtually anywhere. Solar power is the preferred choice for northern parts of the country while wind power is more popular in the southern states. Both technologies can be supported by energy storage systems such as batteries.

Hydro Tasmania's King Island Renewable Energy Integration Project (KIREIP) combines wind and solar power generation with energy storage and smart-grid demand-side management. The project has drastically reduced the island's diesel dependence and resulted in periods of 100% renewable energy use.

Hydro power and geothermal power can also be used in off-grid applications. However, the use of these technologies is not as common because they require specific site conditions.

Many emerging wave and tidal energy technologies are showing promise. The commercialisation of wave and tidal power generation will create off-grid opportunities for island communities in the future.

The off-grid market includes both domestic-scale and commercial-scale customers. Demand for off-grid systems also often tends to be driven by load.

Most of the demand for off-grid renewable energy in Australia comes from:

  • households
  • pastoral stations
  • rural and indigenous communities
  • tourist facilities
  • small industrial projects
  • pumping and irrigation
  • mine sites
  • mini-grids or islands

The future of off-grid renewables in Australia

The Australian Renewable Energy Agency (ARENA) currently administers Regional Australia's Renewables, an initiative that assists industry and communities in remote and regional locations to invest in off-grid renewable energy systems. The program aims to deploy at least 50 MW of off-grid renewables in regional Australia by 2020.

Two groundbreaking off-grid renewable systems will be constructed at major mining sites over the next few years. Rio Tinto's Weipa bauxite mine is set to get a 6.7 MW solar PV and storage system, while Coober Pedy will receive an 8.9 MW solar, wind and diesel hybrid plant thanks to Energy Developments Limited. Both projects were created with the support of ARENA.

The diesel currently used for remote power generation is usually subsidised. As the price of diesel continues to increase, the cost of these subsidies will also rise. Meanwhile, renewable energy solutions are getting cheaper every year and already make economic sense for many off-grid sites.

It is only a matter of time before renewable energy is the preferred source of power in remote areas of Australia.