This seems to be a good indication that solar is having an impact on the bottom line of ‘Big Power’ - and why shouldn’t it? that is exactly the intent, cheaper, cleaner, renewable. It must hurt the power cartels
Seems like an opportunity for a CHOICE campaign …
The main lobby group representing Australia’s electricity and gas networks has renewed its push to hit households exporting solar back to the grid with additional grid charges – to the horror of some consumer groups and industry experts.
Energy Networks Australia on Monday circulated an “opinion” piece written last week claiming that the lack of specific network tariffs on solar exports from homes back into the grid amounted to an unfair “ban” on charging.
This relates to a rule, 6.1.4, introduced in 2007 as rooftop solar started to become a thing in the Australian market. It was designed to avoid the double billing of solar power and was consistent with market rules that charges the customer for network usage, not the generator.
Proposals effectively double billing consumers are about as stupid and as clearly wrong as they get!
From the Renew report.
solar households exporting into the grid are paid substantially less by utilities for their exports, and yet these same electrons are then sold to other customers at the normal retail rate, which includes the network charges. Charging the seller for the export would be double counting.
Many of us must be wondering again about the priorities for reducing the cost of electricity, and who is running the country?
At an enterprise level the major players in the Generation, Distribution, and Retail sectors have significant capital investments. Separate to any operating costs, the return on investment is driven by the Capital Investment over time. The lower the revenues the lower the return against the investment.
Will the enterprises involved walk away simply writing off the value of the investments at nil value? Has this situation been made more complex by the Federal Govt encouraging the states to sell off their electricity assets for vast sums of money?
Customers are finding ways to reduce useage of electricity through improved efficiency at home and solar or hybrid solar. Surplus solar exported from rooftop PV is typically only travelling a few metres down the street to power the neighbours who do not have solar PV.
One way for government to mitigate the risks and not needing to compensate or buy back the private investment in the industry is to hand control and effectively ownership of rooftop solar to the same businesses!
What price going off grid then? Assuming it is not regulated against or as for some other services, you pay for the benefit of the service passing your property, whether you connect or not.
There are two different issues, power generation and power transmission/distribution. The article relates to power transmission and not power generation…these are quite different. The cost of renewable power has little to do with the hypothetical change to network charges.
I do have an issue with ENA opinion piece as the network charges for the consumer of the exported small scale roof top solar is borne by the consumer of this power, no differently to conventional forms of power generation. Large scale generators do foot the bill for their connection to the main grid, but don’t pay for their electricity to run through the main grid. The consumer through network charges pays for this.
Small scale solar generation connection pay for their own connection to the grid (e.g. for a new house, this connection may include many metres of poles and cables to the house and cost of installing metering systems). I can’t understand why such would be tabled other than implementing a socialist scheme where everyone (well maybe mainly the wealthier) subsidises the less well off or pays the same for everything.
Nothing more than a greedy attempt to gouge consumers.
As the article states. consumers are being paid only for the generation component whilst the retailers sell the electricity for retail prices which include generation, distribution and retail components.
It already is a socialist scheme, given a core part of the cost is a daily connection and metering charge. The same also applies for reticulated gas services, or water and sewage services.
The charges are also equalised when the cost of network upgrades are attributed to the demands of all users and distributed to each customer, exclusive of relationship between the customer and costs incurred.
That is users in established burbs or locals having already paid off their infrastructure (true cost or notionally), are partially funding the upgrades due to expansion, to supply increased demand as new customers come into the system. Many older uses having seen their taxes pay for the original network and ongoing maintenance have moved on to be lower small family users. It is arguable they are now saving expenditure due to their lower usage? These customers are in many instances now paying a second time for theirs and others needs.
Is it really a simple discussion?
Not when the prior work and reports by the ACCC on the cost of electricity is considered.
The ACCC simplified matters by looking at the industry on a current business model. The prospects for remedy, unsurprisingly recommended writing of investment in the network as one action necessary to reduce consumer charges!
The more the public purse is used to prop up the current system, or subsidise change, the more equal the outcome. It’s doubtful the private investment in the network sees this as a priority given the current reporting?
The network whether locally at the front of a residence or in distribution and transmission nationally is essential to the current mixed renewables energy future. Ownership and control of these assets is an assured path to profit if privately owned and deregulated?
Not quite true since AEMO has whacked the big solar and wind farms with increases in what they call a ‘marginal loss factor’. This means that the renewable energy generators will only be paid for some fraction of their actual output, as low as 75% in some cases. Broken Hill Solar Farm are losing 25% of their income due to lack of grid capacity - in effect they are paying to export electricity.
Yes, the marginal loss factor. This factor still relates to the generation component and corresponding (calculated) losses from meterage at generation to that delivered by the customer. While it occurs on the main network, it isn’t a charge for the use of the network.
Distance is the tyranny of the electricity grid where losses are magnified by greater distances (and some other factors, but principally distance). As many renewable sources are removed from the existing transmission network (more remote locations), the corresponding losses are greater than those generators connected directly to the main transmission grid.
It is worth noting that using DC rather than AC for long distance transmission can reduce the magnitude of the loss over such distances.
The loss for DC is the same as AC, and DC has a much more restricted distance over which it can be distributed.
AC can be distributed at very high voltages thus greatly reducing transmission losses and transformers reduce the voltage to be fed to consumers.
Thomas Edison made the mistake of believing that DC was the answer only for Nikola Telsa to demonstrate that AC was the correct solution, resulting in Edison being booted from the power company he founded.
Edison’s power stations could only serve an area of around 20 miles each so he had to construct many to service a city.
Yes there are some examples but they have their own challenges. Basslink is a 400kV DC undersea cable. This article sums up DC in HV transmission quite well…
There has also been discussion in Australia about connection of some renewables using DC, such as the geothermal (hot rocks) in SW QLD and also remote cities. I also expect it has been a consideration for connections such as NT to the east coast grid or SA to NSW.
Keeping the discussion about AC vs DC from the engineers and their principles, I find this a simple if not simplistic and easy to understand explanation of why AC prevails, but one can also then see why DC is good for special cases.
If you charge the solar generator as well as the consumer of that power isn’t that charging twice for the same service? Does this mean the consumer will get a reduction or will the total charges go up for no added benefit?
If it is reasonable to move away from the model where consumers pay the network costs to where generators are going to pay why would this concept not apply to the existing commercial generators too? By what logic is it only domestic solar that should pay?
The article looks to me like an attempt to re-frame the debate nearer the prefered position closer to heart’s desire, or put another way, to run new flag up the pole to see who salutes. That doesn’t mean the policy is necessarily going anywhere soon, or at all.
From many sources this is not considered true eg the sparkfun article reference by @PhilT has in it
" High-Voltage Direct Current (HVDC)
Swiss engineer René Thury used a series of motor-generators to create a high-voltage DC system in the 1880s, which could be used to transmit DC power over long distances. However, due to the high cost and maintenance of the Thury systems, HVDC was never adopted for almost a century.
With the invention of semiconductor electronics in the 1970s, economically transforming between AC and DC became possible. Specialized equipment could be used to generate high voltage DC power (some reaching 800 kV). Parts of Europe have begun to employ HVDC lines to electrically connect various countries.
HVDC lines experience less loss than equivalent AC lines over extremely long distances."
“Furthermore, every electrical engineer knows that losses accumulated by AC transmission can exceed the losses incurred by DC due to Skin Effect and capacitive coupling, phenomena where, because the energy flows on the wire’s surface, it is absorbed by objects beneath it. The transmission slows down due to these resistances, consequently diminishing its efficiency”.
A further interesting insight to why DC may end up being used more from the same scienceabc article is this
“Another reason why – and this seems to be the most important – DC might return is its compatibility with environmentally friendly electronic devices. As all solar cells are based on semiconductor substrates, they all generate or operate on DC power. DC might have to return for the sake of renewable energy. Of course, we can recruit AC as well, but this would require tedious conversions from DC to AC using an inverter and then to DC again, where 5-20% of energy is lost as heat. In fact, data centers spanning whole acres do use these converters, but they not only consume huge amounts of energy, but there is also the additional cost of cooling systems for the heat generated, which exacerbates their financial plight”.
As a child Tesla, pinned flying insects to wheels such that their beating wings caused the wheels to rotate. And as an adult played tricks with very high voltage, and high frequency AC to create an illusion all AC was safe. Edison as a grown up fried (demonstrated electrocution of) an elephant using AC power.
Science and clever Engineering set the foundations for both options. Both are of benefit today!
Fortunately we no longer need to torture wildlife to improve our knowledge of either.
However AC power continues to torture the minds of young Engineering students with the complexities of unreal power, imaginary numbers and the mathematics of Laplace! The world of DC has it’s own special form of insanity!
Perhaps we can move on and address the real issue at hand? The prospect of a call for change in the Federal electricity market regulations that would drive a stake through the inverters of most residential PV systems!
I hope it is just a bad dream, as often changes under regulation do not require Parliamentary review and approval.
Not only are the retailers pocketing the dirtribution portion of the price that they retail the FIT electricity for, but where they have sold it as “green power” they are also pocketing an extra 10% on the FIT, distribution and retail components.
In the case of Ergon in regional Qld, they are paying approx 9 cents per kw for FIT and selling power for approx 28 cents per kw for non-green and approx 30.8 cents for green.
A gross profit of up to 21.8 cents per kw.
And our FIT power would flow to the house next door and a few other nearby properties who do not have solar
If the networks want more money, they should ask the retailers to pay them the distribution portion of the retail price that they are pocketing.
To see what charges other than energy are included when consuming electricity from the grid, one just has to look at one’s power bill.
The retailer only keeps their retail margin. Network costs charged to tbe consumer goes back to the regulator and used to pay for the augnmentation, operations and maintenance of the existing network, the energy component goes to the generator, the metering charges goes to the metering company, the GST to the Commonwealth government etc.
The 9 cents FIT correlates to a average energy market pool price of $90/MWh. The 2017 average pool price for Queensland was in the order of $93/MWh, whilst 2018 price was around $73. The 2019 price is tracking around $80/MWh. These figures indicate that the FIT is possibly a little more generous than past pool prices received by other generators with exception of 2019.
The FIT is based on the average pool price and not what a retail customer pays. The reason for this is traditionally the consumer pays for the use of the network, their metering costs and also other service/electricity delivery charges. When exporting to the network/grid, the FIT treats a amall scale PV generator no differently to other generators on the network…that being they don’t pay network charges as it is the consumer which traditionally has done this. This is the reason why the comment about the hypothetical small scale solar generator charge by ENA changes the current rules was made.
Highly possible or used by a consumer in that part of the distribution network which your house resides.
The consumer of the solar feedin would be paying the current tariff rate for the power they use which includes the costs as outlined above.
A flat system of network charges is used as one would otherwise argue that if they lived next to a power station, their network charges (proportional network costs) would be negligible or almost zero. Others at the end of the network (say at the end of a rural swer line) would be proportionally responsible for all changes between their residence and the generators connected to the grid…which would be excessively expensive for these users.
The system assumes that the whole of the neteork is needed by all to provide and maintain reliable power, thus costs associated with the delivery of the energy should be spread across all consumers. This is a reasonable assumption and a fair system.
The network operators (distribution and transmission) already receive all the monies collected. The monies are returned to the regulatory who then distribute it back to the operators based on their approved revenue resets (5 years costs for the operation, maintenance and augnmentation of the grid).
The only way for more money to go to the network operators would be for the retailer to collect additional money and pass it directly to the network operator. I am sure that both politically it would be unpalatable and would also go against the current legislated and regulated costing regimes.
I understand where @fred123 is coming from. Keeping it very simple
but called it ‘gross profit’ when the selling price includes more than just Ergon’s overheads, and as noted
some of it is essentially collected on behalf of other profit centres. If one backs out the energy, network, and metering charges one would get a comparable amount to the $0.09 FiT. Not being in Ergon’s territory I do not have those numbers but they should be easily derived from a bill, or close enough to get an idea of the buy-sell spread from rooftop solar inputs.