With the release of the long-awaited Finkel Review and its promise of cheaper household and business electricity bills, even as emissions are reduced, consumers have a right to ask themselves what’s in it for them.
But for all the talk, and promise, of a major shift from centralised generation to a decentralised market, based around the consumer, the answer is: Not a lot. Particularly considering the report’s prediction that Australian consumers will spend $200 billion on behind the meter technologies. They’re going to expect some bang for their buck.
Energy Networks Australia hailed the Finkel blueprint as “the ‘last, best hope’ for energy customers”, but to consumers, the clean energy target as currently presented might simply appear as a shuffle of money between various large businesses. And little of it is coming their way.
There is some good news. Finkel points out that emissions can be reduced and electricity bills can come down at the same time. That’s because the cost of wind and solar is far cheaper than new coal and gas, even when storage or “firming” costs are added – a fact that conservatives still refuse to accept.
The problem with the graph above is that it still suggests that consumers will face a cost of electricity close enough to 30c/kWh.
Given that the cost of rooftop solar PV has already fallen to between 5c and 10c/kWh, and that battery storage is, in the words of Finkel, “coming like a freight-train” – exactly how long do they expect consumers to continue paying around 30c/kWh for grid power?
It’s not a question that any of them like to answer. SA Power Networks recently acknowledged that the combined price of solar and storage for a house or business was likely to fall to around 15c/kWh within a few years – that’s less than half the cost of grid power there. But the response of networks is simply to hit the consumer with more fixed charges.
Yes, the networks are promising to roll out all sorts of interesting proposals to consumers – demand management initiatives, trading power with neighbours, and even getting paid for “leaving the grid” for a short time.
But while giving trinkets with one hand, they are taking with another, to ensure they “get their money back” from the huge investment they have made in the networks in recent years.
Fixed charges have soared, now as high as $1.50 a day, or more than $500 a year; there are proposals to “tax” solar exports, or hit solar households with additional network fees. Worst of all is a proposal to force even those off the grid to pay for the network they choose not to use.
Finkel does address this issue, but in frustratingly small detail. His message, however, is potent.
Giles Parkinson is founder and editor of One Step Off The Grid, and also edits and founded Renew Economy and The Driven. He has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.
This post was published on June 14, 2017 10:50 am
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Good objective comment - something it appears is evading the COALition. Everyone needs to take a deep breath and stand back, then discuss - not launch idealogical tiradeS (we have enough of them coming over the Pacific). Finkel has IMHO walked a very fine line. To dismiss his report too early, will be to extend the vacuum that is the AEM - to no one's advantage.