Why is electricity so expensive?
"Shocking bills and pointless infrastructure"
John Kaye Elec. Eng., MLC Greens
PhD and ex lecturer in Elec. Eng. and clean energy at UNSW. Member of the NSW Legislative assembly (State senate).
NSW along with some other Australian states now have some of the world’s most expensive electricity. Most of the recent price rise is due to building poles and wires.
In 2007-8 the state governments who use to regulate power prices gave control to the Australian Energy Regulator a federal body. This made sense as it gave Australia a uniform price structure. However the know-how in IPART, the state body, was lost, and the new body did not have the capacity to fully understand proposals.
Consequently the state government owned transmission companies, Transgrid, Ausgrid, Endevour, and Essential Energy, could go ahead and spend $17.9 billion to build world's best practice transmission lines. Some of them were for only 2 hours of peak load per year. This now costs NSW customers $654 per household per year.
These power lines are based on 1959 thinking. they were direct from the coal fired power stations to the customer. Overseas the thinking has been for the last 30 years to allow power to come from a variety of sources and use energy saving to reduce peak loads. The grids needed to be more adaptable. However our politicians have not grasped this.
80% of the power lines could have been avoided if chips had been put into appliances such as air conditioners allowing them to be turned off briefly during peak load. The is called ripple control and is used in USA and NZ. The customers do not notice it.
Another way is to simply increase the feed-in-tariff encouraging people to install solar. PV on the roof delivers peak power during times when air conditioners require most load.
We should have been given the choice of installing PV, or paying the $650 per year forever.
A society based on clean energy generated closer to the customer will mean more local jobs and services, less greenhouse gas emissions, and cheaper transmission costs.
Although demand for electricity has fallen for several years, the transmission companies, each year ignore the trend, and keep projecting straight line growth. Actual electricity use is shown with the blue curved line..
Our power price are made up of:
Fees and profit 3%
Poles and wires etc 60%
Networks in country regions too expensive
the two biggest operators in regional Queensland and WA have already conceded that new technologies such as solar and storage – and the emergence of mini and micro-grids – make the traditional form of delivery more or less redundant in some areas. Their services are already heavily subsidised by cash-strapped state governments, to the tune of $500 million in WA and more than $600 million in Queensland. Both governments have indicated this is unsustainable.
Last year, Ergon Energy, which covers more than 90 per cent of the state, said it was likely that its customers would find it cheaper to go offgrid – with renewables such as solar plus storage – than to remain connected to the network.
Horizon Energy, which services regional areas in WA, in March tendered for operators to supply large battery storage and solar systems for some towns as it contemplated whether centralised generation had any future in regional areas.
“Our traditional energy business may be very different and very small (in the future),” managing director Frank Tudor said last month, adding that the cost of solar plus storage was already a fraction of the cost of delivery of centralised generation through the networks to some remote towns.
Dramatic changes in the nature of electricity generation is forecast across the world. David Crane, the head of NRG, an energy giant in the US, said recently that building an electricity system in the 21st century based around millions of poles and wires is “shockingly stupid.”
The Rocky Mountain Institute recently released a report suggesting that solar plus storage could be economically viable for households in New York and Los Angeles within a decade. Investment bank Morgan Stanley said in a report earlier last month that solar plus storage would soon create a “tipping point” that causes customers to seek an off-grid approach. Renew Economy
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