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Nahan says ban on battery storage and EVs is “red tape gone mad”

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West Australian energy minister Mike Nahan has delivered a damming critique of the regulators in his state, claiming that the “ban” on battery storage and electric vehicles for WA households was a case of “red tape gone mad.”

mike nahanNahan has come under intense pressure in the last couple of weeks following a burst of publicity about the ban, which prevents any household with a battery storage device or an electric vehicle from being able to export back into the grid.

This came just days after Nahan had hailed solar energy, and other technologies, as the future of the WA grid, suggesting that within a decade rooftop solar could account for all of daytime demand.

Nahan appears to have come to the conclusion that the best way to get WA out ofs its energy problems is to focus on distributed generation.

Right now, it has an unwieldy energy grid that is reliant on ageing, dirty coal fired power stations and expensive gas, yet needs to be subsidised by more than $500 a year for each household, or a total of more than $600 million.

Nahan appears to recognise that by removing those subsidies, solar and battery storage and electric vehicles will become even more attractive. The challenge is to effect the regulatory and tariff changes that allow that to happen …. and to happen fairly.

In response to questions in parliament late last week, Nahan said it was clear that regulators and regulations had been caught out and had “not adjusted with time and technological change.”

“It is red tape gone mad,” he said in direct reference to the “ban” on exports from storage and EVs, adding that it was a “rubbish” regulation which he did not know about, despite “hundreds of meetings on this issue”.

He said it was a decision locked in by regulators until 2017, because when they set the rules in 2012 they decided that they did not have enough information about the technologies.

But Nahan also noted that Synergy is able to have what is called non-reference tariffs or special tariffs. It is just that it was not possible to have such tariffs for one million households. “Synergy needed to come up with a regime of allowing people to export energy from batteries,” Nahan said.

And if it won’t, its new rivals will. Alinta Energy has revealed it will offer solar arrays under power purchase agreement, as its bigger rivals are doing in the eastern states. And it will offer battery storage too, although it thinks that this remains the province of “early adopters” for the moment.

Nahan, meanwhile, noted that solar energy is still growing at an annualised rate of 44.5 per cent in WA, which he said in “pretty good.”

And, he said the number of batteries will grow, but the biggest question was how to accommodate it.


“This is one of the biggest issues facing the pricing of grids going forward, but that does not mean we should just ban it for five years,” he told state parliament.

“That is not what we do, so I will address this issue. I will cop the criticism that it should not be there. It is now 2015—three years on—and we have had a revolution, and the revolution will grow.

“We will address this matter. I do not know how we will address it. I have to get the ERA, Western Power, Synergy and the industry on board to come up with some pricing. We also have to get some data on the actual size of the batteries, the flow of the batteries and a whole range of other issues. “  

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  • Mikeo100

    The funny thing about the way to solve the problems in the WA grid is that it is probably a very real IPA solution i.e let Government set simple but fair rules, stop the crazy subsidies, regulations and monopoly power and just let the market do its thing. That should be the sort of thing that Nahan actually got into politics to do – not support vested interests in maintaining outmoded technologies and outdated business models.

  • Sean

    They will have about as much success as trying to ban Uber.

    if the majority of people want something, and dont care if they break the law,it might as well not exist.

  • Jacob

    Are the regulators corrupt?

    This article does not say if the WA grid has been privatized or not.

    • Miles Harding

      No, just inept.
      I always assume ineptitude before corruption!

      • nakedChimp

        You’re a very kind and *cough* naive person.

  • Peter Grant

    This is a breath of ministerial fresh air. One of the first and cheapest things the minister could do is (re) introduce some public advocacy and representation into the sector. The consumer pays handsomely for the incumbents and utilities to research and make sophisticated arguments to the regulator about western powers access agreement – nowadays these argument go uncontested as the general consumer has no advocate. Hundreds of pages of expensive consultants reports from western power go uncontested with consumers having no capacity to research and no voice in the process. Mike Nahan you are right it is mad but it is also predictable consequence of the supine bureaucracy, and privileged environment for self interested market participants that your government has created.

  • Rod Hayes

    Just to be clear the “ban” here is on the export of stored energy directly from the battery. (the reason being for the retailer to stop energy arbitrage where a consumer buys off-peak and sells back to the grid at higher on-peak rates). We have connected systems in WA to the grid with retailer approval so long as the export energy comes direct from the panels.

    • juxx0r

      Just to be clear, that’s not the case at all. If you clicked the link there is a screen shot of the text from the contract about halfway down the page:

      http://onestepoffthegrid.com.au/w-a-sees-solar-future-but-battery-storage-and-evs-are-not-allowed/

      • And just to be even clearer, i think you are both right. It is supposed to be just a ban on exports (bad enough as that is), but is worded so badly by synergy, and is understood so poorly by its people, that it looks like a total ban.

        • With respect, Giles, why doesn’t your article title include the word export and make the export ban clear in the first paragraph?

    • Roland Gotthard

      Uh…we don’t have peak and off peak rates in W.A. so there is no arbitrage to be had.Therefore it IS a direct ban on all exporting of energy from a system with battery to the grid, regardless of whether the electrons come direct from the panel or are from a battery or are from the grid.

      This could be a strategy in NSW, for instance, where a canny arbitrageur could buy at, say, 13c and sell at 38c. Except that feed-in-tarriffs aren’t linked to peak or off peak. Also add: except you’d be buying at 23c and selling at 7.9c in W.A.

      Even if you could turn an arbitrage profit on, say, 38c minus 13c just reselling stored electricity, you’re limited by the KWh in the batteries, which are around 7-10 KWh. So, best case scenario you shunt 10 up and 10 down at 25c per unit, or $2.50 a day. Would take a fair while to arbitrage your way to profit on that if a battery costs ten grand plus.

      And in the end this is hardly marvellous – it’s just doing what the Bendeela Dam in the Wollongong hinterland does with hydro power – pumping water uphill during off-peak and selling the electricity back to the grid during the peak. How disruptive a technology to allow households to indulge in peak-shaving energy storage on a distributed basis!

    • Ian Porter

      This highlights the nonsense that consumers who use technology (that they fund themselves) to take a lower cost of power and sell it back for an arbitrage ‘profit’ are in the wrong. As long as the power is going back into the grid at peak times, the retailer should not be allowed to interfere since the peak will eventually be solved by the very technology they are trying to discourage if time of generation and use metering is adopted.

      Grid operators are fearful of batteries because they are the key enablers of solar and wind and ultimately the demise of grid utility as they have been historically used to.

  • Miles Harding

    This is something that I would not disagree with the minister over.

    Better still would be to strip away the subsidies and veils of secrecy that surround generation, transmission and retailing and move to a simple, transparent and fair model that rewards consumers for being economical and engaged with the generation and distribution system’s capabilities.

  • JeffJL

    All the EV owners I know in WA (and I am one) have solar panels. One even has battery storage. How long before we get caught.

    • Nathan Miller

      fts

  • Chabo Chook

    Funny how the “market” wants autonomy from regulations, but squeals louder than a pig when the “market” wants to move away from their dirty old business model. Okay then, Nahan… you’re the minister… fix it!

  • Stuart Bunt

    Batteries are a solution not a problem. They solve the issue for the suppliers that all their costly spare generating capacity is tied up for the 7pm surge. Solar makes things worse by producing energy for the grid at the wrong time. The whole point of batteries is to spread the input over the day. Less power will swamp the grid in the day and the 7pm peak will be reduced so the generators can decommission some plant or save on coal/gas/oil to generate electricity.

  • Tim Buckley

    Great to see Nahan speaking up on this critical issue, but he is in charge while massive errors are being made. Nahan has also overseen the implementation of a massive taxpayer funded, 16 year duration coal subsidy to help Yancoal out a dud, debt funded acquisition. Nahan also oversaw the implementation of a massive capacity payment to fossil fuel generators – another word for a coal subsidy. Now as Energy Minister with all these corporates and agencies reporting to him – lets see Nahan actually make some progress in removing this “red tape” that is costing electricity consumers real money every day and trying to stymie an inevitable electricity sector transformation. The longer Nahan delays, the higher the cost to WA consumers.