Ausgrid to buy solar power from Syd businesses.

Electricity network operator Ausgrid has reacted to ballooning infrastructure maintenance and repair costs by investing in a pilot trial for solar power. They’re offering to buy solar from local Sydney businesses in a trial area to see how renewables can help move a company, which has been called “possibly the least efficient network in Australia” (via Hugh Grant (no, not that one!) from the Australian Energy Regulator) into the future.

Ausgrid’s Solar Trial

Ausgrid Solar
Ausgrid’s $2m Solar Pitch (source: ausgrid.com.au)

Ausgrid, Australia’s biggest network operator, was privatized and sold to two Australian super fund managers late last year. Technically the deal was a 99-year lease of their assets, while the New South Wales government holds 49.6% and a consortium of IFM Investors and AustralianSuper holds the other 50.4% interest.

With electricity networks now utilising PV solar to cut costs and future-proof their businesses, it’s clear the cat is well out of the bag in terms of Australia’s energy future. 

Via a $2 million trial investment, Ausgrid is offering $250 per kilowatt for companies in certain Sydney suburbs (Auburn, Erskineville, Alexandria, Redfern, Randwick, Waterloo and Kingsford Smith, according to RenewEconomy) to install solar panels on the top of warehouses and industrial facilities.

A tender document noted: “We consider solar power systems and energy efficiency retrofit activities would offer permanent demand reductions over the typical network need period once installed.”

They hope to reduce grid demand and subsequently lessen the amount required to fix existing infrastructure – and if this pilot is successful Ausgrid could potentially roll the offering across their entire network, which spans Sydney metro, the Central Coast, and the Hunter Valley.

The future for Ausgrid and Solar Power

Now that they’re starting to realise the inexorable march towards renewable energy means adapt or perish, there are myriad pathways Ausgrid could take from here.

Assuming their trial project is successful, they could roll the entire 1.6 million customers into a bunch of microgrids, implement local energy trading, and they could also consider looking at further decentralising their grid – they could offer incentives for energy storage, not just solar panels. 

Whatever ends up happening, Australia’s solar power future is clearly starting to shine brightly when companies like Ausgrid start to turn to renewables to save money! 

 

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‘National Energy Guarantee’ a national disgrace.

Malcolm Turnbull’s leadership has been fraught with spineless (or a complete lack of) policy and the Government’s announcement of a National Energy Guarantee yesterday was congruent with what we’ve come to expect. In short, their national energy policy removes the Clean Energy Target, has 0 renewable energy policy after 2020, and defers critical decisions to state Government, the Australian Energy Regulator, and the Australian Energy Market Operator. The ‘National Energy Guarantee’ policy is based on a unanimous recommendation by the independent Energy Security Board, chaired by Dr Kerry Schott.

National Energy Guarantee

As per the official document, the National Energy Guarantee will actually comprise of two separate guarantees, determined and enforced by different bodies: 

The reliability guarantee will be set to deliver the right level of dispatchable energy—from ready-to-use sources such as coal, gas, pumped hydro and batteries—needed in each state. It will be set by the AEMC and AEMO. The goal of this is to help stop blackouts like those seen in South Australia last year and reduce prices by using long-term contracts rather than short-term spot prices. 

The emissions guarantee will be set to contribute to Australia’s international commitments. The level of the guarantee will be determined by the Commonwealth and enforced by the AER. This means that renewable subsidies and incentives have been scrapped completely – retailers will be responsible for ensuring their power is efficient enough to help Australia meet its international obligations (our Renewable Energy Targets signed up during the Paris climate change conference). No word yet on what the penalty would be for those not reaching this target but presumably they’d be able to make up for it the next year or face a light slap on the wrist. 

This is a ‘technology- neutral’ position which does not ‘pick winners’ – so it’ll be interesting to see how this pans out. What impact will it have on the myriad Australian solar farms currently in various stages of development? What about future plans? 

Residential Energy Prices

The Government estimates this Guarantee ‘could’ lead to a reduction in residential bills – around $100-115 per year over 2020-2030. They’re hoping to reduce spot price volatility without using subsidies or taxes – which theoretically could help the ballooning cost of electricity in Australia. See the graph below which is labeled ‘% increase’ on the Y axis – which may make it a little more difficult to see that the price has more than doubled every year since 2012. With Australian wages stagnating and underemployment at an all-time high, something needs to be done about these gigantic increases. But is this really the way to go about it? 

National Energy Guarantee - Average Retail Electricity Price Increases 2004-2017
National Energy Guarantee – Average Retail Electricity Price Increases (source:energy.gov.au)

We understand it’s difficult to balance this rapidly increasing price with the subsidisation of new technology which can take time to show results, but this 50c/day saving is hardly the ‘game-changer’ it’s hailed to be – so the myopic choice of ignoring Chief Scientist Alan Finkel’s recommended Clean Energy Target in favour of a 50c / day saving Turnbull can’t even guarantee is a perfect metaphor for the endemic, anaemic, short-sighted policy we’ve come to expect from Australian politicians over the past decade or so. How far can we kick the can down the road? I guess we’ll find out. 

It’s becoming increasingly clear that coal-fired generators have no future in Australia. Have renewables reached the point where they don’t need any help from the Government with regards to subsidies or tax breaks? Prima facie this looks like an atrocious plan for renewable energy and Australia’s energy future as a whole.

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2017 NSW Tariff-Tracking Report released.

The St Vincent de Paul society has released its fifth NSW Tariff-Tracking report and it shows the huge disparity between deals the retailers are offering – with the best offers saving almost $840 p.a. compared to those on the worst plans. In regional NSW this range is even worse, with the difference reported by the SMH as up to $1230. Australian solar power plans are in need of a shake-up and this week the government have taken the retailers to task by asking them to change the way they deal with discounts and rolling over plans.

2017 NSW Tariff-Tracking Project Report Vinnies
2017 NSW Tariff-Tracking Project Report (source:vinnies.org.au)

NSW Tariff-Tracking

Despite ballooning wholesale energy costs, retailer AGL reported a net profit of $539m for the 2016/17 financial year. The profits of energy retailers have been in the crosshairs of the government over the past few months as their dubious tactics of offering short term discounts and then rolling customers onto more expensive plans without the discounts have been examined.

On Wednesday the government met with eight power companies (Energy Australia, Momentum Energy, Simply Energy, Alinta Energy, Origin Energy, AGL, Australian Energy Council and Snowy Hydro) to discuss the rapidly increasing prices and come up with a solution to the murky short-term ‘discount’ based business model they are employing. After the meeting Prime Minister Malcolm Turnbull discussed the issue and the government’s fix, saying  “They are on … discounted plans that have run out, and they are now on a standard offer and paying too much for their electricity. The retailers have agreed that they will write to their customers who have reached the end of a discounted plan and outline, in plain English, alternative offers that are available,”

Given that the Energy Market Commission found 50% of households haven’t changed retailer or plan in the last 5 years, there’s a lot of money being left on the table. According to Energy Minister Josh Frydenberg the Australian Energy Regulator (AER) have told the government households could save over $1,000 per year by changing retailer/plan.

In terms of the power companies, they were mostly happy to agree to Turnbull’s plan, but there was ongoing discussion about Canberra’s dilly dallying with regards to the Clean Energy Target. Origin Energy’s chief exec, Frank Calabria, was quoted by the SMH as saying that “to deliver a genuine reduction in prices for Australians, we must also find a way through on energy policy, including a Clean Energy Target. This is necessary to unlock investment in much-needed new supply to replace our ageing coal-fired power stations, and transition us to a cleaner, more modern energy system”.

Click here to view the full report directly from the Vinnies website.

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South Australia Renewable Energy

South Australia Renewable Energy targets are being smashed for 206/17. The SA government’s official target for renewable energy is 50% of demand and they were hoping to reach this by 2025. Recent figures released show that large scale wind power and rooftop solar PV in South Australia has already reached that target easily – measuring at 57% this financial year.

South Australia Renewable Energy –

South Australia Renewable Energy 2017
South Australia Renewable Energy 2017

The Australian Energy Regulator released a report last week that shows wind+solar has reached 57% in the 2016/2017 financial year.

According to the AER, “In the nine months to 31 March 2017, the contribution of wind generation was even greater, supplying 50 per cent of South Australia’s electricity,” – this is as a result of Snowtown Wind Farm (currently 368.7MW) and Hornsdale Wind Farm (currently 315MW) reaching key stages in construction and affecting the output considerably.

Although wind power is currently generating huge numbers of energy for South Australia, The Australian Energy Market Operator (AEMO) expect that the amount of PV solar rooftop will double by 2025 (this will result in over 1500MW). The most important thing at this point is figuring out an intelligent way to organise battery storage of solar energy as this technology continues to evolve. South Australia has had a torrid 12 months with regards to energy blackouts and it’s imperative that we find a way to manage situations where the wind doesn’t blow and the sun doesn’t shine. The Bungala Solar Project (220MW, to scale to 300MW) is slated to start supplying power by summer 2018 and reach full capacity (220MW) in August 2018.

Last week we also released information on the Clean Energy Australia Report for 2016 which showed that SA generated 5,508Gwh in renewables, with a penetration of 48%. RenewEconomy have estimated that Bungala and the Lincoln Gap wind farm (212MW) will take the state to 65% renewable – by far the biggest of all the states in Australia. Although South Australia has battled with power issues over the last year it is exciting to see how motivated they are to ensure they generate as much renewable energy as possible. As the state upgrades its ability to manage rapidly evolving technology whilst mitigating the swings in available wind/solar we are sure they’ll continue to lead Australia in the industry and are excited to see what this means for the future of renewable energy in South Australia.

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