Energy Prices

I don’t understand any of it but not impressed by huge increases. Why is our gas cheaper overseas?
If I invest in a solar battery (I have solar panels) can I ‘go off grid’ and not have to pay supply charges or useage?

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I created a new topic for your great questions @wend.

These have been discussed here and there on the community, but not in an easily found and concise manner. Hopefully others will address your questions.

As for going off grid, if you disconnect from the grid you do not need to pay supply/connection charges, but depending on your locale today, and what government may do in the future it is not a simple yes/no although for now it is probably a yes across all Australia (I could be corrected by ordinances for some of our major metro areas).

In the USA some local jurisdictions made going off grid illegal or so difficult is is the equivalent. It was done to protect the power companies P/L in some cases, PV prohibited to protect the local beauty and ‘real estate values’, and some (water/sewerage) for what seem legitimate health issues. A site that covers them today, and what might creep into Australia although we tend to be more environmentally conscious on our worst days than Americans on their best (taken as stereotypical wholes)

Going off grid for electricity requires an adequate battery capacity, a system designed as an island (eg no grid connection), and depending on locale a backup generator is advised just in case. Generators require periodic maintenance and running, and petrol/diesel powered ones need to always have fresh enough fuel by running them or draining and refilling them; gas less problematic. Some of the many types of gensets available are shown in this random ad.

For gas, this is boring reading, and I hope others will make more interesting replies, but the ACCC is what it is…


We are halfway with no town water or sewage services. Our PV system annual production comfortably exceeds our annual total electricity consumption. We have nearly 3 years of history on which to make an informed decision on battery cost vs risk. In our instance staying connected to the grid remains the lowest cost. Supply security varies.

It’s worth considering that the systems installed to enable totally off grid for power, water and waste treatment are not maintenance free or 100% reliable. If one is capable some of the needs can be self managed. Work/repairs to electrical installations depending on the voltages or to waste water treatment (subject to local councils) are regulated, IE Licensed trade work.

For SE Qld, we are familiar with a rural property that has no connection to the electricity line passing the front gate. There is currently no requirement to connect to the service or pay if it is not used. As @PhilT noted this could be changed by Government.


Because the exporters arranged it that way. There is much to the topic but I will be as brief as I can.

The market is divided by distance and connections, WA is separate from the eastern states. Twenty years ago the east was supplied mainly by fields in Victoria, in Bass Straight and the Cooper Basin (NE corner of SA). All these are connected by gas pipes to the capital cities except Perth. Gas was fairly cheap in that time and somewhat lower than global markets mainly because we were not connected to those markets so an equilibrium was reached between local suppliers and consumers.

Since then technology has advanced which allows directional drilling and access to gas that is embedded inside the structure of rocks through fracking. For example coal seam gas in QLD and NSW and shale gas in the USA. These are different to the petroleum gas in Bass Straight for example. This turned the market upside down as vast new fields became possible. Huge new fields are in production in QLD and WA and both are linked to the world market via shipping. Thus the extractors can charge global market prices in places like Japan and Korea. There are large fields in NT and smaller ones in NSW and other states that have not been developed yet.

The result of these changes are that gas produced from all sources can now be exported through the shipping terminals in WA and QLD. So domestic users, both household and industrial, are paying more. This is an interesting example where increased supply produced a price rise instead of a reduction according to classical economics.

The price has risen to about 2-3 times what it was before all these changes - much faster than inflation. When the Cooper Basin was opened a pipeline was built to supply Sydney, so the gas was running south east to the big smoke. Since the QLD export started there have been times when it ran the other way - which sounds mad. The reason is that Cooper Basin was also connected to QLD so the pipeline was used to send gas from VIC to QLD for export. So not only was the new gas going offshore but the ‘old’ gas that used to supply the east coast as well. It may not have been the gas from Bass St that physically went overseas but it was used to make up for other contracted supply so that it could go overseas, which amounts to the same thing.

We now have the absurd situation where there are five (at last count) projects at various stages of completion to build terminals to import gas.

Why? Because the small group of extractors who own the fields and export terminals were allowed to do as they wished. Licenses were issued at a huge rate without any consideration of the impact on the domestic market. The extractors function as a cartel and decline to compete too hard with each other as that would drive prices down. If prices stay inflated they all make more money more easily.

So we have situation where the then NSW Minister for Energy Anthony Roberts berated the industry for their obscure dealings because it made it impossible for him to do one aspect of his job, to ensure energy supply. The industry laughed at him but not to his face. In the meantime then Prime Minister Turnbull threatened them at the national level and got the same result - polite words, no action and one thinks smirking behind hands. Where a federal government ought to have ensured country-wide supply as a priority ours did nothing.

We are told the only way to fix this is to open more fields and to extract more gas. The hope is that if this happens it will become available for domestic use and keep prices down. Without any legal framework to ensure it goes that way it will still be open for the industry to export more gas if they expect to make more profit out of it. Either we do not have an adequate legal framework to prevent cartel behaviour and prioritise the local market or the political will to use it, or both.


To go ‘off grid’ you will need a new inverter as well as adding battery to your existing set up.
Size of battery will depend on (a) your guestimate of how many overcast/rainy days in a row you need to cater for, and (b) how much you would be prepared to reduce your electricity usage when running completely off batteries during an extended period of no sun to recharge your battery.


Or (c.) use a generator to charge the batteries when there’s no sun. A liter of diesel can make about 3kWh so is not outrageously expensive. Also a wind generator is a good supplement, overcast and rainy days are usually windy days, and there is some wind at night.

I have crunched the figures a few times. Most batteries have shorter lifespans if cycled deeply, the sweet spot seems to be about 20% discharge so if daily draw from the battery is say 6kWh then batteries should be sized at least 30kWh. Of course draw doesn’t = total daily use, if the washing is done while the sun is shining then the batteries may not be touched. And adding more panels is cheaper than adding more batteries.

Solar Quotes has a handy tool - payback calculator for Solar PV with or without battery.

Disconnecting from the grid saves the daily connection charge, while the ability to export surplus PV is lost. Of value in staying grid connected is the low cost of top up power, which is partially offset by any export. It is less problematic and less costly than investing in and maintaining -

While importing grid energy has a carbon cost, the emissions from a diesel generator are much greater. It’s a solution, but not the best.

This may be correct for lead acid or lead carbon batteries. Lithium technology batteries can be cycled daily to near the full capacity without loss. EG Tesla Powerwall 2.

SolarQuotes has a cost comparison of the battery options and base costs per kWh of energy stored. Excluding the hybrid inverter cost there are options listed at less than 20c/kWh. Competitive with grid energy supplied to residential customers.

The basic Solar PV estimating tool provides results within 10% of the power and payback/financial outcomes achieved by our homes Solar PV installation.

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It’s not a solution that gets used much.Sizing the batteries to 5 times the daily draw figure and allowing the occasional 75% discharge when there’s no sun, it may get fired up a few hours a year. Assume a top up of 10kWh/day and 10 days a year, that’s 100kWh or 33L of diesel a year. Less than a tankful for a 4WD. It is the power source of last resort, just a guarantee that the system will always deliver power.

But are they cost effective. The lead-carbon batteries claim a 12 year life and much better cycling than lead acid at half the cost of the power wall. In an off grid situation surely it is better to have that overcapacity to draw on than using the deep cycle capability of lithium. The powerwall is a better for grid connected systems but off grid it may not be.

I’m not really looking for a discussion, I was just adding to vombatis comment. As I said, I crunched the numbers. I looked at the options. I set up an off grid system with 9.6kWh of NiCd batteries (second hand), a petrol generator, inverter, 1kW of panels. Enough for a weekender for one person.

Double or triple the price is not outrageous?

Double or triple the price of what? Diesel is currently $1.50/l yielding 3kWh. That’s 50¢ per kWh. At the moment I am paying 53.5¢ per kWh for peak power from the grid (if I use it). And as I pointed out to mark_m, it is not something that gets used every day. It is not possible to know beforehand how long the longest run of cloudy weather will be, but it is possible to get statistics. Those statistics allow one to calculate enough battery to cover most cloudy runs. The generator covers the unpredictable outliers. It may never get powered up, but it’s there for security. Like an insurance policy on your house.

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$0.30 peak (++/-) is about the norm in metro Melbourne, could I ask where you are and if this is the best offer you can get, with recognition some people make choices for other reasons than pure pricing (periodic reward $ of loyalty, points, etc) that offsets the banner amount?

Good comment. Local costs affect the equation and discussing what is double or triple or half would not be productive in any sense without taking local and personal circumstance into the context.

I hope it gets powered up to avoid stale fuel and for periodic maintenance checks.

The sources that I read say you burn 0.4l litre of diesel per kWh. Most people pay 25-35 c per kWh, why would you recharge from the grid at peak times at 53c per kWh? Then there is the cost of the motor generator, a few thousand dollars depending on size, plus the cost of wiring it in, for something that will be used infrequently. I guess it depends on your definition of outrageous.

If you read the full context, we were discussing an off-grid situation.

I no longer have the system, sold the land. However I recently stayed at an eco cabin, completely off grid but you wouldn’t know it. The cabin had a 7kW inverter running off 36kWh of battery, and a diesel generator that was run for half an hour each week for that reason. And the owner said that is the only time they are used.

Oh, and I live in Newcastle, and get my power through Red Energy. They give a 10% pay on time discount on the whole bill. Our usage is so low (between 4 and 6 kWh/day) that supply charge of 90¢/day is a big part of the bill so getting 10% off that is good. I am not a good example of a Choice reader in this respect, I got fed up with the annual ring around for a better deal. I had to put in a switch request before the existing provider would offer a decent discount for another year. It seemed like a waste of time all round so I just settled with Red who don’t cut their not particularly competitive deal after a year.

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Refocusing on the OP.

The bases were covered in a prior reply:

The Chair of the ACCC last 12 months back said,

I am yet to hear a compelling reason from LNG producers as to why domestic users are paying substantially higher prices than buyers in international markets.”

“When we have lower gas prices around the world, and the Australian market linked to world gas markets, it is vital that Australian gas users get the benefit.

The resolution by the ACCC was for the ‘heads of Government to take action.

Not much has changed.

On the question of

The most recent posts have covered some considerations. There are other Choice topics that look at battery systems for solar PV. It’s a very dynamic fast moving area of technology. Australia often pays a premium for imported technology.

How close are we to a situation where average consumers can make an informed decision that to be off grid is cost competitive?

For a specific recommendation and solution, note there may be a number of different options. A detailed history of past electricity usage, current lifestyle choices, and future needs are all considerations. The consensus is ‘off-grid’ for electricity is a niche market. As a simple economic decision, the average home owner is unlikely to be able to justify the decision.

For any consumer who is serious about going off grid, the analysis and advice of an independent Design Consultant and or obtaining at least three proposals from reputable CEC approved businesses are options. Solar Quotes provides a free service to assist in selecting experienced businesses to provide quotes. A reliable quote should include a comprehensive assessment that compares the annual cost including capital of staying as you are and going off grid.

We are rural (just out of town). The quote we had to go off grid was well over $30,000 for two people in a small home. Or a loan costing around $4,000 pa over 10 years, typical battery life. Before installing Solar PV our annual electricity bills were around $250 per quarter. With Solar PV only we are in credit including being able to run RC air conditioning. For us a battery or off grid is not yet economic. If the decision is about reducing our environmental footprint, putting the $30,000 towards a BEV that is V2H/V2G (running the home off the electric car battery) would be a better decission!

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Then what is the relevance of the figure you say is peak price if it does not represent the alternative to using a generator?

You questioned my use of the phrase “not outrageously expensive” and implied the price would be “Double or triple the price” but you didn’t specify of what. I assumed you were talking of grid electricity (having not noticed I was referring to an off grid context) so I compared the cost of generating 1kWh from diesel with buying 1kWh from the grid at peak times. They are similar. So either a peak grid kWh is outrageously expensive or generating from diesel is not. It is a value judgement and each can come to their own conclusion. My opinion is 50¢/kWh is expensive but not outrageous. I also came across a paper by the NSW department of primary industry that works the figures for a farm where they can claim a rebate on the fuel costs, their figure was 23.8 ¢/kWh.

Going off grid depends a lot on the climate and the latitude. To go off grid in southern Victoria requires that the solar energy harvested during the day charges the batteries sufficiently to cover the night time load (zero solar) in winter, when the days are shorter, the nights longer and the sun is low in the sky. So, lower solar harvest, bigger night time load. See my paper at

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