Look on the bright side … the worse the gap between FIT and retail price, the better the business case to install a battery - assuming that you can’t consume all of the energy that you produce (so that the FIT is even relevant).
My bills in this dreary autumn are about 50% service fees. It has been a rainy cloudy month around Melbourne - what a surprise - but unless one disconnects from the grid methinks the case for batteries will remain nebulous for most of us down here for at least the short-medium term.
When the sky is clear (in Melbourne?) no worries, but I went 4 days with (theoretically) not enough generated to supply the house and charge batteries, then 1 with marginal export, then another 2 with not enough, so would have needed a fairly robust battery installation (or fired up a generator) if I went off grid. I suspect the equation would be quite different in @draughtrider’s and other parts of the country.
I figure I am already paying a flat per day fee to access the grid - Our local supplier says this:
Supply charge – This is a fixed charge applied per day which covers the cost of supplying electricity to your property.
51.16 c/day inc GST - $186 per year, once connected.
Of course our grid supplied electricity has traveled a maximum of about 30 km from point of generation to point of consumption, so its a bit different to the big smoke.
To me it’s like the council charging me to put a driveway entrance in the street, then charging again to allow me to use it to exit the property. It’s already there. I want to visit the guy on the next street - he’s paid for his driveway, why should I? Probably guilty of a massive over-simplification there
We had one really cloudy day in May …
If you have lived in North Qld and the SE of Qld, as we have, it is easy to see why @Fred123 is making a very clear and valid point. As the recent Federal Election commentators point out regional Qld is structurally different to the rest of Australia. Large regional cities scattered over a coast line that stretches more than 1,700km North from Bris-Vegas.
If you live in the SE of Qld you are connected to the same electricity network which stretches all the way up the coast. In the SE of Qld supply is contestable. In the north, well?
Today in Brisbane solar PV owners can get 20c FIT with AGL or 16c FIT with Origin! Same network!
Something is seriously wrong for Qld customers served regionally by Ergon and feeding solar PV into Cairns or Townsville etc. The nearest major power station is Stanwell, nearly 1,100km to the south. Although there are the hydro stations on the Barron and Tully rivers as compensation, to cheaply fill in the gaps as needed. Solar PV in NQ saves on transmission costs and losses. Go figure!
With Loy Yang A having a unit outage since May 18 - which is likely to extend to a 7-month outage - you’d think we would want to incentivise extra grid exports from distributed renewables during times of peak demand. https://www.theage.com.au/business/companies/agl-energy-flags-seven-month-outage-at-victoria-s-loy-yang-power-plant-20190607-p51vq0.html
When temperatures in Victoria reached the 40s last summer and, at the same time, a Loy Yang A unit was down and Yallourn was operating at reduced capacity, the Australian Energy Market Operator had to order a load shedding event - forcing rolling blackouts - and the wholesale market price reached the cap of a whopping $14,500 MWh! It was a disturbing and very, very costly event.
Rooftop solar not only reduces grid energy demand - particularly during the summer months when generation is highest - the excess energy exported to the grid reduces the reliance on aging and costly coal-fired generation when it is most needed.
Solar householders have already invested substantial capital in purchasing generation assets - and they get puny export credits for their grid exports. Why impose additional network charges on them?
If household battery prices come down, it will just push more households to opt for storage, rather than making their excess generation available to other households on the grid when it is most needed.
Accepted there is good reason to complain, but the industry might desire a different direction.
Consider that paying more for feed in from residential rooftop PV on its own may not deliver what is needed. It is simply pushing base load out of the market and suppliers to make more use of the limited peak demand capacity available to the national grid.
Unfortunately Solar PV is most available during the middle of the day on the east cost where most of the demand is. Peak demand is consistently associated with morning (breakfast) and evening (meal time) peaks. True in mid summer on extreme hot days peak solar PV does help during part of the day but is not sustained in late afternoon when air conditioning loads remain high or increase as people arrive home from work. In winter heating demands during the daytime are less significant than those of the cooling evening.
The solar uptake has pushed the market to drop some of the base load coal. This has left us customers more reliant on peaking power supplies which include hydro and gas turbines as the most effective. Hydro power is cheap, but limited. Direct generation using gas turbines is relatively expensive. The fixed capital investment is high. Hence the less gas turbines are used, the more expensive it becomes. We appear to be more reliant on gas for peak power, and the NEM. The NEM discourages the use of gas turbines for peak power generation through the pricing structure. Equally the owners of the assets are determined to ensure those assets when in use return full value on the investment. Solar PV will not change that for the better?
What ever changes are made to generation and supply strategies, they cannot be considered in isolation to the investments currently supplying and delivering to the market. The changes likely include more pumped hydro storage (Snowy 2), more battery storage, and other sources of power that do not depend directly on sunlight.
Yes we need a strategy! Although pushing coal out of the market is not a solution to our immediate energy needs. It is akin to telling everyone to stop driving their cars to work or to and from the school pickup and shops by this December. The greatest resistance to such a proposal might not be the inconvenience arising. It would be the added bonus that the government is not going to buy all the vehicles back at market value. They are but scrap for the metal merchants!
The electricity generators face a similar scenario, while the purpose and need for the national grid is changing. Even the electricity retailers face an uncertain future as demand is reduced through increased residential self consumption and more battery systems. Would you pay more for feedin for solar PV if it hastens the end of your business?
Most of the market may not say so, however it could be looking for ways to pay less for feedin while continuing to take advantage of the cheap solar PV from rooftops. And delay further change!
It looks like a long wait for a way forward that will meet all needs, except for those who can afford to speculate good money on expensive batteries.
It’s the same grid that extends throughout NSW, Victoria, South Australia and Tasmania, yet the FiT varies rather a lot, some people getting zero return for their solar generation exports!
The demand profile on the network has changes in the past 20 years.
In the past, peak demand in summer more of less followed the temperature curve, that being, the peak occurred in the early to mid afternoon. Peaks were influenced by commercial and industrial loads responding to higher temperatures. In such cases, domestic solar generation, in theory, could have had reduced the early to mid afternnon peaks as this is also a time when solar generation was also at a near daily high. This also assumes that the network is also a upwards flow system where energy can flow from one network area (e.g. residential where solar is generated) to a different network area (containing heavy electricity users) - unfortunately the system doesn’t work that way at this present time, but could with significant augnmentation of the network…but is possible.
More recently, peak demand occurs in the late afternoon to early evening and is influenced by domestic demand (residents returning home from work, turning on the aircon and prepsring/cooking the evening meal). This means that unfortunately solar generation which peaks late morning to early afternoon does little to reduce these late after/evening peaks.
What solar would do is if there is a energy deficit around late morning to early afternoon, say through a major transmission outage/fault, solar could support the network until the outage/fault is rectified. Whether this hapoens of not will depend of a number factors including the size of the dfault, its location, generation sources and location, capacity of the remaining operating network etc.
Frid installed batteries have the potential to change this by charging at peak domestic solar generation times (late morning to early afternoon) and discharing during peak demand on the network (late afternoon/early evening), thus potentially reducing the peaks at that time.
See my previous post about FIT…
If one wants to make money and profit from exported solar, then yes, the FIT could be seen as ‘puny’. But is one is looking at the market price of energy on the grid, the current FIT is similar to the existing pool electricity price. In this case the FIT is fair and is no different to other large scale generators providing electricity on the network.
Locally in Victoria the FiT varies with $0.09 and $0.11 being the most common amounts. What is constant is that the solar plans seem to each price roughly and simplistically as follows:
Off Peak price: $off_peak_price
Peak price: $off_peak_price+$FiT_price
Sans batteries on an overcast day the retailer is doing well and on a sunny day the customer is doing well, seasonally dependent for most of us.
Solar also begets a peak off-peak tariff that appears gamesmanship because most of us, as posted above, use most of our power at wakeup and dinner times, before and after the PVs are generating much. Overnight use when possible takes advantage of off-peak rates but we pay more for what we consume from the grid 24x7 than what the grid pays us for our generation, so maximum cost savings are to use power when the sun shines.
This website has info on FITs…
The whole sale/pool energy prices also vary significantly from state to state as well. These prices are influenced by generation and demand. Flows between the states are restricted by the capacity of the interconnector transmission lines. If these interconnector transmission lines had unrestricted capacity, electricity could flow anywhere on the grid unimpeded and there were no losses in the system, then in theory the electricity prices from state to state would be the same. To get a network which operates like this would be called diamond or platinum plated and someone would need to pay for it.
We all know who that would be.
An alternate solution is to develop micro grids and focus more towards local generation and storage.
Done well local small grid areas would be balanced in generation, storage and demand. Hence they would never export or only export limited amounts of power.
The national grid and interconnects would remain primarily to distribute power from major generation sources or mass storage. And as the grid is supplying make up or balancing loads the peak demand for transmission will typically be much reduced on current needs. The strategy effectively removes the need to cater for large reverse flows of power between residential users and the main distribution network.
This would seem to make better use of these assets and limit the need for additional investment to the lowest level of community power distribution?
Residential feedin benefits and hence price for such power with this way forward would align more to localised factors.
Amazing that the NT can pay a FIT around the same as the retail price of electricity whilst the rest of the country pays a mere pittance and then have the temerity to want to rip-off the FIT providers for more money.
Most of the other states also had FITs earlier on which also were similar to are greater than the retail tariffs and also significantly greater than the pool price. These inflated prices were used to encourage the installation of PV systems by the state governments…however…these inflated FITs were dropped as the premium benefited those who had PV systems installed and exported electricity (many earlier PV systems were set up to maximise export to maximise profits/returns on investment).
Someone has to pay the price difference between the average electricity pool (wholesale) price and the inflated FITs…and it ended up being the consumers who couldn’t afford PV systems (low socioeconomic households and renters). These non-PV solar households saw a significant increase in their power bills as a result and after government inquiries, the state govenments reduced the FITs to around the average electricity pool prices so that those who couldn’t afford PV systems weren’t disadvantaged financially further.
NT isn’t currently connected the the eastern state main grid and relies on its own local/state generation to support its own network. I am not sure why its FIT is high, but it could be due to the marginal cost to introduce new generation to cover increased demand.
Australia, and Queensland has done this in the past with the old boards which generated power for its local networks. These boards/local networks were integrated to balance out generation and demand profiles. Not doing so creates a lot of unnecessary redundancy which consumer have to pay for.
Counterpoint is that the competition we have every day for utilities, internet services, and many other aspects of modern life are needless repetitions of repetitions. One provider has one management overhead; 10 have 10 management overheads. One might have 10x the dividends where 10 have 1 x the dividends each.
Unnecessary redundancy is government policy as well as dogmatic economic liberalism as applied to small markets such as ours as some of us see it. Others just see it as capitalism.
May be its time that the Government passed legislation that all new homes must have solar. That is if they are truly concerned about climate change and the consequences of burning fossil fuels!!?? Fat chance of that!
Why is it that business in Australia is always out to “get” the consumer?
Interestingly enough the Qld State Govt when Anna Bligh was Premier had mandatory requirements for new housing which followed on from the housing sustainability ratings that were being touted with every house sale.
There were a variety of incentives available to exisiting home owners to reduce electricity and water usage. New homes were required to meet minimum insulation requirements, resistance HW systems were banned and in our current area water tanks were also required.
There is certainly a precedent for mandating solar PV, although the practicality of doing so would vary with each site and design. Unlikely also to be universally popular as it might provide another argument for vested interests to attribute high property costs to red tape and government incompetence?
It cost labour government in Qld in 2012!
With a 49.9% first preference giving the LNP 78 seats to labour’s 7. Landslide, or wipeout? Please excuse the political view point, however often voters and electoral emotions trump logic. Mandatory rooftop solar might need to wait?
It’s also perhaps not a solution to the current proposal of increased transmission based charges for residential PV feedin?
One way forward may be a mandatory requirement for selected new estates to be self sufficient low impact. Developers currently need to pay for the cost of the roads, drainage and other services.
Why not a solar farm and battery bank, reducing the capacity and hence cost of the required interconnect for the suburb to the local grid and NEM? Motivated consumers have a choice to move in or go elsewhere?
The elephant in the room is what happens when the sun doesn’t shine and the wind doesn’t blow. Battery banks with present technology are simply not feasible to cover for base load power for any length of time. This means coal or gas fired turbines or maybe (spoiler alert) nuclear. Network charges to export to the grid are a very minor issue.
There are many, many trees in some areas. None in others. In pleasant leafy areas one often needs a permit to cut them. It won’t happen in some council areas, not even for PVs.
There are many, many, multi-level buildings surrounding single level dwellings in some areas. Lots of shade over some, not so much over others. The higher the less affected.
Summary: well intended but impractical as a matter of mandated policy.
Look to the precedent in the UK where renewables are displacing fossil. Such changes do not happen overnight, but they happen where there is the will. I cannot imagine the UK has more sun and wind than ourselves.