RenewEconomy
SA Power Networks, the monopoly network operator in South Australia, has caused a furore in the solar industry by proposing a $100 a year network surcharge on solar households.
The proposal was revealed in a submission to the Australian Energy Regulator earlier this week, and follows decisions by both the Queensland and West Australian governments – the owners of their respective networks – to back away from similar moves.
SA Power Networks (SAPN), which operates the poles and wires that deliver electricity to homes and businesses throughout the state, and is owned by ASX-listed Spark Infrastructure, says all consumers will receive price reductions in the coming year on their network costs.
But while most households will receive a discount of $188 a year on their network costs, and “vulnerable” homes a saving of $388 a year, the 175,000 solar households in the state will only receive a discount of $88 a year.
SAPN justifies this by saying that solar households still need as much power from the network at peak times as other users, even if they use less electricity from the grid during the day when the sun shines.
But the decision has caused outrage in the solar industry, and accusations that SAPN was cherry-picking data to suit its argument. Queensland considered a similar move, before being warned by retailers that it would backfire. The WA government has also stepped away from a similar proposal.
Certainly, SAPN’s argument that solar households were not paying their fair share goes against their own pronouncements that the 590MW of solar PV was helping to add stability to the network in the summer peaks. “PV is shifting (the) peak, but also helping reduce stress on the network during heat-waves,” it said in its presentation to the market in February.
SAPN spokesman Paul Roberts said that was true, which was why the solar households would still receive a “discount” on network costs. He said solar households under this proposal would pay 90 per cent of the network costs of the average non-solar household, instead of around 80 per cent now.
The move appears to be a heavy-handed attempt to push solar households across to demand-based charges that it introduced at the start of the year.
That seems to be where rooftop solar is going, and even SAPN admits it will add to the attraction of battery storage, but solar groups complain that solar households are being victimised where heavy users of peak demand such as those with air-conditioning are not.
“The bottom line is that if their tariffs were truly cost-reflective, they shouldn’t need to make any technology-specific adjustments – for PV, air conditioning etc,” said Rob Passey from the Australian PV Institute.
Solar Citizens’ Claire O’Rourke described the higher network charges as a “witch-hunt” against solar and a “money grab”. Solar industry analyst and commentator Nigel Morris described it as a “transparent and lazy” attack on solar households.
The APVI’s Passey says networks are not permitted to charge differently for customers with micro-generation compared to those without except for the difference in usage patterns and load profile. But SAPN’s Roberts says the network is confident it is acting within the rules.
Roberts said the network wanted to push all users to demand charges eventually, it’s just solar households and commercial businesses which are being moved first.
SAPN’s own data confirms that solar PV has effectively shifted and narrowed the peaks in South Australia. That explains why AGL Energy has decided to mothball half of its Torrens Island gas-fired generator from 2017.
This has had the combined impact of reducing the wholesale price in the electricity market, and because solar households draw less from the grid, reduced revenues to the networks.
The graphs below – provided by SAPN in its submission to the AER – show that the average summer peak for solar households is about two hours later than non solar households.
However, their individual peaks can be higher, because the nature of the feed in tariffs has encouraged them to export as much electricity as they can to the grid, and turn on their appliances afterwards.
“Not withstanding what the profiles reveal, the after-diversity profile of residential customers with PV is 80% of that for residential customers,” SAPN says in its submission.
“And so with a 50% capacity allocation and a 50% energy allocation, the PV customer should be paying 90% of what a similar residential customer uses for the same peak capacity, not the 80% currently being paid.”
SAPN proposes to address the issue long term by introducing demand-based tariffs, trying to shift appliance usage more effectively through the day. It talks of filling the “solar sponge” during the day by changing the timing of hot water systems, pool pumps and even battery storage charging.
There is some irony in this. Hot water controlled loads were once moved to the night-time, when there was little demand and not a lot for coal-fired power stations to do.
Now that one of the main coal-fired generators has been closed, and the other on summer duty only, that night-time load is now being shifted to the day-time, where solar PV has caused significant reductions in demand, and lower prices.
“It appears that the 10am to 3pm window does not have high prices (probably due to the high PV output at these times) so a good fit with this objective is apparent,” SAPN says.
“Different time options are proposed depending on whether the customer has electric storage heating, a heat pump or floor heating.”
This article was first published at RenewEconomy.
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 May 27, 2015 3:27 pm
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Seems they are determined to accelerate solar customers off the grid with home storage.
I think you are out of touch with reality if you want to use your AC in summer, requires high discharge batteries that would only be good for a couple of years.
It is a good discussion point - you really have to get the right batteries to suit your Depth of Discharge (cycling) load which is usually overnight. During the day there is very little cycling due to solar input. A correctly selected solar/battery system will have a battery life of at least 8 years (gel-lead) and more for higher spec gel batteries. Lithium is forecast to last even longer.
This is reality in the next 2--3 years the payback for home battery systems will be 3--5 years ,expect mass market adoption and mass exit from the grid-maybe just used as a backup--lets see who wrong once the payback reaches this point.As for the life cycles,various groups are offering guarantees way beyond your suggestion.
What would the high C batteries be good for?
You need the AC when the sun is shinning, so your panels will be driving the AC directly (cooling your house when it's most important) and any power left is stored in your ESS for use in the evening/night hours for lights and entertainment..
If your house naturally is badly insulated or you want to feel the breeze, then you need the AC later as well?!
Solar Citizens is right, this does appear to be a rather thin explanation from SAPN to attempt to justify solar profiling. Six years who would have thought solar would be marginalised like this ? If they feel that demand charges are the best fit tariff system for modern grid management then have a good look at the pain airconditioners cause.
This is not as silly as it sounds except it should be the other way around; those without solar should be paying more in local council rates, and those with solar should be rewarded with lesser rates. The cost of the grid should be progressively shifted to the local government area who would then contract Spark networks to maintain it. At the same time, local government should change its rating structure to land only (or CPI, as in Victoria) and make up the balance of rates based around solar energy, and of course, carbon abatement. That way, ratepayers would receive better value for their commitment to solar, and not be penalised by, in effect, a tax on the sun.
This is outrageous!! The end result will be solar power users wanting to get off the grid completely as soon as possible
I was working in the electricity industry and I do remember the bonuses we did receive whenever a blackout occurred and the when price of power went through the roof. Since the widespread introduction of solar energy, we had hardly any blackouts during peak summer times. There is no justification to punish people to invest in renewable energy. During periods of long and frequent black-outs, many elderly people died and we had a lot of traffic accidents because traffic lights did not work. It seems SA Power Networks and the Government of South Australia are keen to have again large bonuses for people in the power industry and let a few people die. If this would happen in Africa or South America, we would call it corruption!
So which company paid you a bonus for a blackout? Networks revenues are not boosted by a blackout. Most companies in network industries have measures such as SAIDI, etc on which their employees may receive a bonus.
Yes, during heat waves there were frequent power shortages despite the interconnection with Victoria . It lead to massive price hikes and widespread blackouts throughout South Australia. Because of the price hikes profits and bonuses very high. Any bonus which rewards bad management is not in the public interest. Solar installations reduced power shortage during summer heatwaves and bonuses were accordingly reduced over the years.
It seems that SA Power Networks want to punish solar customers for doing the right thing for the environment.
But you said "the bonuses we did receive whenever a blackout occurred and the when price of power went through the roof" Just what is the financial incentive for a blackout and which company is paying bonuses for blackouts? Do tell...
I am sure your current job will allow you to work it out for yourself which companies did pay bonuses for high power prices. I don't know how widespread the practice is today.
Your avoiding the question regarding blackouts and now only mention high power prices...no one has a financial incentive for blackouts to occur and I've never heard of anyone receiving a bonus for a blackout. Neither networks or generators want blackouts to occur as it reduces the volume of sales. If a blackout is large enough, it curtails system demand and can cause prices to plunge. Blackouts usually occur due to an under investment in networks or an unplanned event.
If they go through with this they will have a fight on their hands!
Well if you connect the dots - there was Tony Wood and Grattan with their made up facts that solar programs were a huge waste of money and tariffs need reforming etc etc.. all lies/ mistruths and easyto be prove that they are - and what do you know - SA NETWORKS last night puts this out.
This is the same company that tries to steal money off Victorians for truck visits that never occur to do anti-islanding tests that never happen - ~$300 theft off every solar customer that Powercor/Citipower allows to have solar connected to their networks.
A house that runs an air conditioner at peak times, and then
uses little energy the rest of the time, can be a much bigger burden on the
networks and electricity costs than a house with solar.
What happens if all people with solar turn off the solar for a few hours to find out if they are right or wrong?
I guess it would have to be on a hot, sunny afternoon; as on hot summer nights with air-conditioners running, there is no solar available. If the afternoon, then perhaps the high NEM generation peaks with staff bonuses(?) would return momentarily?
yes, but it would be the innocent people who would suffer.
I think SA power is owned by someone in China. Cost has been the highest in Australia for some time and will continue until the lease expires. Rumor is the lease was signed for 100 years.
Please correct me if I am wrong.
Near enough 99 and correct me if im wrong, but they get to own new infrastructure, they install.
SA Power Networks, along with Citipower/Powercor is 51% owned by the Cheung Kong group, nominally based in Hong Kong but headquartered in Bermuda. Spark Infrastructure own the remaining 49%. Formally ETSA, created as a public owned company by Tom Playford, was once the cheapest and most efficient of power utilities in the world until it was privatised by the liberal and country party. It was then broken up, with AGL taking over the retail business. Electricity supply in SA is now amongst the highest in the country.
The message may be never ever to sell a State owned monopoly to foreign investors. They are not here for the public good but for profit. I remember suggesting a public float of ETSA, but the Government did believe they would get more money by chopping ETSA into seven companies and flogging them off individually.
Never ever ever ever sell a government monopoly to foreign investors. Or banks. Ever. Worldwide, it's always the wrong thing to do.
This is, of couse, why foreign investors and bankers bribe politicians to 'privatize'.
I agree.
Networks are desperately trying to justify (a) price gouging of customers, in Vic this is 11.7/KWh plus the $1+ per day service charge and (b) the fact they completely got the forecast of future consumption WRONG and we are paying for this major stuff up
Are they trying pay off the gold plating of the grid in quick time to get out while the going is good