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Follow on Google News | Australia suffers net metering, PV challenges -- Energy pricing creates 'death spiral' as AC growsBy: Smart Grid Today "Many higher income families are putting more than their fair share of pressure on the grid by using large AC systems and creating extreme peaks," Mark Paterson told Smart Grid Today. He is grids and renewable energy integration leader at CSIRO's (Australia's National Science Agency) Energy Flagship. "Meantime, many of these people also have installed a lot more PVs. So their electricity bills have been significantly reduced as they sell power back to the utilities. The rates do not actually reflect a home's peak demand impact on the grid." Both tariff reform and, in time, something like the transactive energy approach under development in the US and the Netherlands are needed to resolve this issue, the pair said. For customers with large air conditioners, the cost of their network service exceeds what they pay by AU$683/year (US$585/year) For solar customers, the reduction in network charges exceeds the reduction in network costs by AU$29-117/year (US$24-95/year) Paterson was in the US last month to speak at the GridWise Architecture Council conference on transactive energy in Portland, Ore, and he called the growing problem "a social justice issue" in his country where, according to Oxfam, the richest 1% own the same amount of wealth as the bottom 60%. In the last 15 years, Australia experienced a sharp rise in residential AC adoption. In 1999, about 35% of homes in the country had AC, according to figures ENA released in April. By 2010, that doubled to 70%. When many residential customers install AC, this can drive the need for expanded distribution grid capacity that is under-used for most of the year, Paterson said. This drives up rates for all customers, he added. About AU$11 billion (US$9 billion) in peak generating and other infrastructure has been built to meet this peak demand for AC and is used only 1% of the time – the equivalent of only four or five days a year. Meeting this demand at peak times costs AU$2,500/appliance (US$2,000/appliance) "It's a major factor in over 50% of every electric bill," Paterson said. Network charges range from 25-58% of the bill, ENA said. Paying for this infrastructure has sent power bills soaring – 8-20%/year – and created what Paterson called "a death spiral" as more PVs are added in response to higher power bills. Consumers now pay over AU33¢/KWH (US27¢/KWH) "There's a lot of bill shock every year," Patterson said. The Energy Users Assn of Australia in 2012 said energy prices in Australia were among the highest in the world. Those rising energy prices – combined with high buyback rates of over AU40¢/KWH (US33¢/KWH) As all those AC units came online, peak demand grew dramatically, creating a low network capacity use – the ratio between peak demand and average demand. From 2001 to 2012, peak demand grew 20-37%, twice the rate of average energy demand during the same period, ENA said. In newer subdivisions, average energy use is just 21% of peak demand. Meanwhile, solar panels in that time grew to over 1.3 million for about 9 million homes from almost none in 2007, according to 2014 figures from ENA and the Australian Institute of Family Studies. That growth was compared with 500,000 panels in the US for 120 million homes. Initial Australian government incentives offering payments of over AU40¢/KWH (US33¢/KWH) "Participation in the PV programs typically exceeded what the original policymakers may have anticipated. In some states, that became a runaway train. Not everyone could catch the train," he added. "There are a lot of families living in apartments where it's not simple or perhaps even possible to take advantage of PVs," Paterson said. "Meantime, if you happen to be able to install solar, you can either be paying nothing for your electricity bill or you may actually be paid. Wrong pricing hurts QUOTABLE: This is increasingly presenting a social inequity challenge. Australian households with large AC and PVs are placing an inordinate burden on that common shared infrastructure that they're not paying for due to Australia's volumetric rate structures. This is understandable, however, because our rates do not signal how customer choices impact the grid or the community as a whole. – Mark Paterson, grids and renewable energy integration leader at CSIRO's (Australia's National Science Agency) Energy Flagship For example, a typical PV customer in New South Wales provides a benefit to the grid of about AU$10/month (US$8/month) Those payment rates for new PV connections are much lower now, around AU8¢/KWH (US7¢/KWH) in most states, Paterson said, but solar customers who installed solar early on have been grandfathered in under old rates until they expire as late as 2028 in some states, according to ENA. The story has been slightly edited for this format and is included in its entirety here and at http://www.smartgridtoday.com/ ABOUT SMART GRID TODAY: Smart Grid Today's mission is to deliver daily, unbiased, comprehensive and original reporting on emerging trends, applications and policies driving the modern utility industry -- in a signature format our founders have developed over decades in the trade news business, featuring highly concise and easy-to-understand news copy based on trusted reporting, exclusive interviews, informed analysis and strategic insights that our subscribers rely on to succeed every business day. Smart Grid Today is published by Modern Markets Intelligence, Inc. End
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