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TENDER CONSIDERATION PLAN - COMMUNITY BATTERY (Referred from P&E 6 June 2023) · Report - Tender Consideration Community Battery
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GENERAL COMMITTEE MEETING 12 JUNE 2023
5.1 TENDER CONSIDERATION PLAN - COMMUNITY BATTERY
(REFERRED FROM P&E 6 JUNE 2023)
Author Carbon Reduction Officer, Anne Nolan
Environmental Services Department
Index Subject/21.42 - Carbon Emission Reduction
Attachments 1. Attachment 1 - Tender Consideration Plan - Community Battery Grant
EXECUTIVE SUMMARY
Noosa Council identified an opportunity to take the lead in applying for grant funding for the
installation and operation of a Community Battery as a pilot to determine the benefits of such an
initiative to both the community and Council. It is intended that this pilot will enable Council to make
informed decisions moving forward regarding further rollout of batteries across the Noosa
Shire. Noosa Council, applied for funding under the Federal Government’s Community Batteries for
Household Solar - Delivery of Election Commitments Stream 1, which stipulated Noosaville as the
location for the community battery.
Initial research identified that community batteries are an innovative emerging piece of infrastructure,
and a number of trials are being undertaken to determine the operational parameters and revenue
models. Council recognised it would need to partner with an experienced industry expert to
successfully apply for the grant funding and if successful, install and operate the community battery
to achieve the most beneficial outcome for the Noosa community. Yarra Energy Foundation (YEF)
is currently the only not for profit organisation operating an 'in front of the meter' community battery
for community benefit and emissions reduction. Zero Emission Noosa Inc (ZEN Inc) is Noosa’s
community group focussed on achieving net zero emissions for the Noosa LGA.
Noosa Council was advised they were successful in their application for the Federal Government’s
Community Batteries for Household Solar - Delivery of Election Commitments Stream 1, and, subject
to the acceptance of the grant agreement, will be awarded $500,000 for the completion of the
installation of a community battery in Noosaville.
Generally, for a procurement of this value a public tender would be required under Chapter 6
Contract - Part 3 – Default contract procedures - Local Government Regulation 2012, as the value
exceeds $200,000 ex GST. However, community batteries are a new and complicated piece of
infrastructure and as such there are very few entities within Australia that have installed and operated
an ‘in front of the meter’ community battery for the purpose of community benefit and emissions
reduction. Council recognised that it does not have the resources to be able to execute a project of
this nature on its own, largely due to the specialised expertise required. Therefore, an alternative
procurement strategy is proposed.
Under Chapter 6 of the Local Government Regulation 2012 a Tender Consideration Plan (TCP) is
an exception that enables Council to enter into medium sized (ex. GST $15, 000 - $200,000) and
large sized (ex GST. $200,000+) contracts without first inviting written quotes or tenders.
Accordingly, this report recommends the preparation of a TCP as an appropriate procurement
strategy for the establishment of a Community Battery in the Noosa Shire.
RECOMMENDATION
That Council note the report by the Carbon Reduction Project Officer for Tender Consideration
Plan - Community Battery to the Services and Organisation Committee dated 6 June 2023 and:
A. Resolve to prepare a Tender Consideration Plan, substantially in accordance with the draft
plan in Attachment 1 for the procurement of the supply, installation and operation of a
Community Battery, under section 230 of the Local Government Regulation 2012 and;
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GENERAL COMMITTEE MEETING 12 JUNE 2023
B. Delegate authority to the Chief Executive Officer to:
i. Prepare and adopt the Tender Consideration plan;
ii. Approve the negotiation and enter into contracts, within the Chief Executive Officer’s
financial delegation, in order to achieve the objectives of the Tender Consideration
Plan.
REPORT
BACKGROUND
Noosa Council Environment Strategy 2019 and Climate Change Response Plan sets an ambitious
target for the Noosa Council and Community to achieve net zero emissions by 2026. Around 58% of
Noosa LGA emissions comprise stationary electricity. Noosa has over 83.3MW of rooftop solar
installed in residential and business premises across the Shire.
The Australian’s Government Community Batteries for Household Solar grant program enables
excess solar generated during the day to be stored in a community battery for use during peak times.
Noosaville was identified as an eligible location in Stream 1 of this program to be allocated funding
for the installation of a community battery.
The grant application required the applicant to identify the technology and the project implementation
partners for this battery. Following considerable research into community battery implementation
and operating models for community benefit and emission reduction, Council identified YEF, a Not
for Profit organisation, as an appropriate partner in its application for the funding, largely in
recognition of their expertise in the implementation of batteries for the primary purpose of community
benefit and emissions reduction. This includes YEF having successfully installed, and is currently
operating, the only community 'in front of the meter' battery in North Fitzroy Victoria.
The grant application also required community engagement to be undertaken to involve the local
community in understanding the need for the battery, its operations and any risks associated with
the location of the battery in the local area. ZEN Inc had undertaken considerable work to identify
potential locations in Noosaville and commenced community consultation with residents throughout
the Shire. Therefore, it was logical for Council to partner with ZEN Inc for the battery application to
utilise ZEN Inc expertise in community consultation and site selection.
Noosa Council was recently advised they were successful in their application for the Federal
Government’s Community Batteries for Household Solar - Delivery of Election Commitments Stream
1, and, subject to the acceptance of the grant agreement, will be awarded $500,000 for the
completion of the installation of a community battery in Noosaville. A procurement strategy has been
developed in partnership with Council’s Procurement Team to utilise proven experience and
expertise in the establishment of the community battery in Noosaville and to provide value for money
for the grant funding.
PROCUREMENT PROCESS
Due to the complexity of the project, Council identified a need to engage with expertise for both the
grant application and the subsequent delivery of the community battery to the community. As such,
and in accordance with Section 230 of the Local Government Regulation 2012, a Tender
Consideration Plan (draft attached- Attachment 1) was considered the most appropriate method of
procurement as it covers a range of key elements and considerations of the procurement.
Subsequently, in accordance with the Section 230 (2) of the Regulation the draft Tender
Consideration Plan (TCP) addresses the following:
1. The objectives of the Plan
2. How the objectives are to be achieved
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GENERAL COMMITTEE MEETING 12 JUNE 2023
3. How the achievements of the objectives will be measured
4. Alternative ways of achieving the objectives
5. Proposed Terms of the Contract
6. Risk analysis of the market.
Considering an initial market analysis undertaken by the Carbon Reduction Project Officer, and
considering the elements of the draft TCP, a proposal to undertake the installation and operation of
the battery in accordance with the grant application was sought from YEF.
FINANCE
Capital Funding for the Community Battery
Funding of $500,000 for the purchase and installation of the Noosaville Community Battery has been
provided by the Federal Government’s Community Batteries for Household Solar grant program.
Ongoing operational costs
Ongoing operational costs will be incurred for the following activities:
• IT Support
• Dispatch control and performance monitoring
• Battery Maintenance
• Site Maintenance
• Retailer feed for the provision of electricity market access services for both transaction and
Frequency Control Ancillary Services (FCAS).
Revenue
The battery will generate revenue by participating in the electricity market via a licenced
retailer/aggregator. Initial financial modelling shows an average conservative profit of $3900 per
annum. However, it should be noted that these estimates are based on current considerations of the
wholesale electricity market over the next decade and it is likely that new revenue streams may
become available as the transition to renewable energy, away from coal fired power increases.
It is proposed that profit from the battery is reinvested in further community emission reduction
initiatives.
Link to Corporate Plan
Theme No. 4. - Future
Objective 4.7 - Fund and implement the Climate Change Response Plan to support Council,
community and the local economy to build resilience and preparedness for climate risks and to
achieve net-zero emissions by 2026.
Objective 4.8 - Deliver best practice approaches to combat and plan for natural disasters and
climate change including supporting safety, preparedness, resilience and recovery capacity.
Key Actions
Identify and implement a contemporary revenue diversification and strategic investment approach
that identifies innovative and alternate revenue streams for Council.
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GENERAL COMMITTEE MEETING 12 JUNE 2023
Previous Council Consideration
Nil
Finance
Funding of $500,000 under the Federal Government’s Community Batteries for Household Solar -
Delivery of Election Commitments Stream 1, subject to acceptance of the Grant Agreement.
Risk & Opportunities
Program Risks Mitigation
Council does not have the expertise to The TCP mitigates this risk by utilising the expertise of YEF
go directly to market and assess
tenders
Project does not meet the required The TCP has been identified as the most expedient method
timeframes stipulated in the grant to achieve the timelines stipulated in the grant funding
agreement agreement by direct engagement with YEF.
The TCP has been identified as the most likely method to
Project deliverables deviate from
achieve the deliverables of the grant agreement as YEF has
those stipulated in the grant
experience and expertise in delivering a community battery
agreement
in accordance with grant deliverables
Financial Risks Mitigation
Indicative costs of similar projects informed the grant
Installation of the Noosaville
application. The TCP enables the opportunity to engage YEF
community battery exceeds grant
to deliver the project in accordance with the budget and
allocation funding
deliverables stated in the grant application
All other jurisdictions in Australia have trial battery tariffs.
Commercial returns not realised and Energex is currently determining their battery tariffs to
community benefit fund limited accommodate the forthcoming community batteries into Qld.
The financial risk is low.
Insurance Cost of battery could Insurance will be provided as part of Council’s general
exceed budget and therefore insurance for assets.
community benefit fund could be
limited
Resource Risks Mitigation
The TCP enables direct engagement of YEF to manage
resources and subcontractors in accordance with the project
Quality, safety, and service are plan stated in the grant application. YEF is a highly
affected due to resource shortages experienced team with experience in implementing
community batteries for community benefit and emission
reduction.
Legislative Compliance Risks Mitigation
The Tender Consideration Plan is an appropriate
procurement exception under the Regulation, for a
Compliance issues
procurement of this nature, including due to this being a pilot
project for Council.
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GENERAL COMMITTEE MEETING 12 JUNE 2023
Safety Risks Mitigation
Injury or illness to contractors or the The TCP allows for the direct engagement of YEF to conduct
public as a result of the project. the project in accordance the risk management plan outlined
in the grant application
Community acceptance Mitigation
The community does not accept the The TCP allows for the engagement of YEF who has
battery in their local area. considerable experience in community engagement to gain
acceptance of Victoria’s first in front of the meter community
battery
Consultation
External Consultation - Community & Stakeholder
Yarra Energy Foundation
Zero Emissions Noosa Inc.
Community representatives
Energex
ZEN Inc has undertaken considerable work to identify potential locations in Noosaville and
commenced community consultation with residents throughout the Shire.
Internal Consultation
Departments/Sections Consulted:
Mayor Community Services Corporate Services
Councillors X Director X Director
Community Development X Financial Services
X Chief Executive Officer Community Facilities Fleet
Executive Support Libraries & Galleries ICT
Local Laws X Procurement
Waste & Environmental Health X Property
Revenue Services
Executive Services Environment & Sustainable Development Infrastructure Services
X Director X Director X Director
Community Engagement Building & Plumbing Services Asset Management
Customer Service Development Assessment Buildings and Facilities
Governance Economic Development Civil Operations
People and Culture X Environmental Services Disaster Management
X Strategic Land Use Planning Infrastructure Planning,
Design and Delivery