Low Carbon Urban Precincts – From Mythology to Reality

Low Carbon Urban Precincts emote visions of local renewable energy generation, vertical farming and energy efficient business and residents using efficient appliances and driving electric vehicles.  So do we find the establishment of these precincts elusive? How do we encourage them? How do we measure them?

Creating a low carbon precinct in the City of Sydney

I have been working with a group of industry and government leaders in the development of research on low carbon precincts.The focus on the research is on an existing precinct in the city of Sydney called the Broadway precinct. This precinct includes the University of Technology, Sydney Institute of Tafe,  and CentralPark which include residental, commercial and retail   The purpose of this research is to look at how we can retrofit such precincts to make them more sustainable. Such retrofits are common on the basis of single buildings, however cross boundary retrofits between building owners have not been successful to date. 

What is precinct sustainability?

Sustainability within these precincts (and particularly ecological sustainability) can be driven by energy and water efficiency, deployment of renewable energy, deployment of recycled water treatment plants, fuel switching, local pollutant sequestration, reduction in embodied energy and some form of demand management (which may or may not lead to environmental benefit). At the same time it is critical to view precinct sustainability in the context of total impact on the community more broadly , which brings into focus the impact of any changes in such a community on the wider energy and water macro-grids.

What are Microgrids?


Microgrids are one enabling technology related precinct sustainability. The focus of the work for this research will be on how to best configure microgrids to deliver precinct sustainability in urban contexts. Microgrids can be defined as :

“… electricity distribution systems containing loads and distributed energy resources, (such as distributed generators, storage devices, or controllable loads) that can be operated in a controlled, coordinated way either while connected to the main power network or while islanded (CIGRÉ C6.22 Working Group).”


These grids do not, in and of themselves solve any particular environmental issue. Microgrids need to be implemented with the genuine intent of driving environmental benefit. But what are the mechanisms for influencing these outcomes?

Are there other precinct sustainability initiatives?

Many existing microgrid sustainability projects involve either new precincts, large existing campuses, or islands.  The following is a list of campus style microgrid projects, which most resemble the Broadway Precinct :

There are also a number of wider microgrid projects such as Beach Cities Microgrid Project which integrate across the boundaries of sites. In Australia you could argue that Barrangaroo and CentralPark are leading sustainability precincts which deploy “behind the meter” electrical and thermal grids. Another key market for Microgrids are islands. Many pacific islands have by necessity implemented simple microgrids (often involing solar integrated with deisel generators). Or for the Rich and Famous why not buy your own microgrid, as per the recent announcement by Richard Branson of his very own island microgrid.

But there are few, if any examples of retrofitting microgrids in urban contexts “accross the fence” which refers to between two building owners.

So why has this not been done?


The challenge with executing on this vision can be traced back to the fundamental drivers of creating such an outcome. To be successful, a retrofit of a precinct for environmental efficiency must navigate one primary barrier – that all stakeholders will require sustainability measures to pass threshold of economic benefit. Many of the campus examples above were government subsidised and involved collaborations with industry as a pilot format. 


If the economics can be made to work , there is a second issue. These projects must manage stakeholders who often have self interest in the status quo. There must be a clear governance structure to be able to manage ongoing behavioural aspects and benefit distribution. And then all regulatory barriers must be confronted and managed as well as the related (and substancial) task of working with incumbent grid participants (such as electrical distribution companies). Finally there is significant complexity in managing billing and tarrifs on a local scale

So how do we go about ensuring Microgrids drive sustainability?


So how do we establish such a strategy for managing microgrids to achieve environmental outcomes. Firstly we need a way to contextualize the environmental benefits of microgrids within the myriad of issues outlined above. I have done this by creating formula’s which can demonstrate correlations.    Secondly, one can use these drivers to map a number of likely scenarios of microgrid configurations that can solve for the higheset environmental benefit.

The following is an outline of the thinking behind the formulas that I have created below :


1. To measure anything we have to find a common unit of currency. In this case I am using dollars as the universal language. My first formula outlines that in this context the benefits of a particular environmental outcome for a precinct is based on comparing that outcome with others within a time (t) frame, discounted by the time value of money (i) . The Net Present Value (NPV) is a useful measurement for understanding the value of a particular option over the long term (See Formula 1)


2.  The Return (Rt) of any given option is based on a combination of Environmental Benefit (Ev) , Economic Benefit (Ec) and Social Benefit (So). Although I am focused in this debate on Ev, this must be given in context of Ec as most decisions will be based primarily on economic outcomes. While this formula is translating all measurements into dollars, the Ec in this context means direct increases in the capital of any key stakeholder in the precinct. This is a function of the finances of residents, building owners, the wider community and the microgrid owner.


3. Once you have an understanding of the Rt we can get down to the business of really understanding the Ev. To do this we have to price (or internalise) the environmental impoact externalities. While such impact goes far beyond greenhouse gases, for the purpose of this exercise we will use the notion of Carbon equivalence as the metric. 


4. We can then focus in on the key area of interest for my research which is the environmental benefit at  time t of a microgrid. This is based on a formulate of population of the precinct, the affluence, and technology change at any one time. This is then multiplied by the improvements in energy efficiency of the precinct (Ef), the % of renewable energy (Re), the level of fuel switching (ie using generation that is less carbon intensive such as gas fired cogeneration), local carbon sequestration (Ls), embodied energy (Ee) and Demand management. So the question then becomes, how does a local microgrid help to optimise these various mechanisms?


5. There are two key factors that then need to be added. The first, and potentially the largest factor is the impact of behavioral change on all of the factors above (which will impact on affluence, energy efficiency, embodied energy and demand management.)  It could also be argued that behavioral change could impact scope 3 emissions (for example in switching modes of transport). The final mediating factor is then the impact of all of these measures on the macrogrid.

By that I mean that if these measures adversely effect large scale generation that has a higher positive environmental impact, then this must be taken into account. 



So given the description of these functions a number of optimisation scenarios will be presented…. in my next blog.

By Daniel Hilson

4 Comments Add yours

  1. Jane Lambert says:

    This looks like a very robust mathematical approach to “selling the microgrid”. What I’m wondering is – how do you propose that this approach will be used? Who is the audience for this analysis?

    1. Jane,

      Thank you for this very good question. The concept of “governance” within an existing precinct is a very complex problem (and definitely beyond the scope of my research). In the CRC I am working in we have a number of stakeholders and I guess that speaks to the types of people that are interested. We have : UTS, Sydney Tafe, Brookfield Multiplex, AECOM, Property Council, City of Sydney and Better Buildings Partnership (BBP). They are motivated by different factors. The universities in the precinct would like more environmentally and economically efficient buildings, Brookfield (who I work for) wants to be able to establish differntiated DSO’s (Distribution service operators), and the others (City, BBP and Property Council) want to understand how to drive these environmental outcomes.

      In a non-research environment, it is likely that the user is most likely to be a DSO who is approaching a precinct with the economic concept of joining such a community. I am hopeful that the existence of a framework for evaluation of environmental outcomes will ensure that there is a clear pathway to realistic improvement in sustainability outcomes also.

  2. Ailin Sun says:

    A very fascinating piece of research Daniel and very relevant given the population boom in Sydney (i.e. inner west). Do you know of any successful microgrids implemented purely for linking up private residential areas? I recall of some examples in Europe but not as state of the art as that mentioned in your research.

    1. Ailin,

      This is a tough question. I have been seeking residential community microgrids and it is tough to find them. There are quite a number of islands and remote communities which are microgrids. Traditionally they have been based on Deisel generation which is reliable but very environmentally and economically inefficient. Recently they have integrated many more forms of renewable energy and used smart controllers.

      One exciting recent example in Australia is the King Island project : http://www.kingislandrenewableenergy.com.au/

      Have a look, and thanks for the question.

      Dan Hilson

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