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Queensland may change solar tariffs to match peak demand

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The Queensland government has asked the state’s Competition Authority to report on the potential benefits of introducing of time-of-use solar tariffs in the state over the next year, marking the latest move by the nation’s state governments to offer consumers a fairer price for their rooftop solar generation.

Some states are poised for a 500% growth in rooftop solar panels by 2030. AAP Image/Tracy Nearmy

In a letter to QCA chair Roy Green, Queensland energy minister Mark Bailey asks the Authority to calculate spot wholesale electricity pool price values for different possible peak and off-peak combinations,  over the course of a day.

The data will then be used to compare peak and off-peak values, weighing up any potential cost savings to consumers, as well as to network owners – in this case, the Queensland government.

Bailey says he expects the Authority to “illustrate the impacts and outcomes of different peak and off-peak periods,” to inform rooftop solar consumer understanding.

“This must include presenting each of the potential peak and off-peak periods against a typical solar generation profile for a relevant location covered by the Ergon Energy network to allow solar customers to understand the timing of solar generation compared to the possible peak and off-peak periods,” the letter says.

Queensland currently has a feed in tariff of 6c-8c/kWh – which is voluntary in south east Queensland but ,andatory 6-8¢/kWh in regional areas where Ergon operates.

However, Queensland’s wholesale electricity prices have averaged more than 10c/kWh for the 2016/17 year, suggesting that solar households are being sold short, and average tariffs at afternoon peaks have been significantly higher.

The QCA is also expected to undertake public consultation on the timing of peak and off-peak periods, and report to government which times are preferred by consumers.

The move by the Palaszczuk government follows recent tariff changes in Victoria, where a premium for solar – because it produces during the day – was added to the existing feed-in tariff, along with avoided loss factors on transmission lines, and avoided costs of carbon, taking the tariff to a minimum 11.3c/kWh, up from a previous 5c/kWh.

As we reported at the time, the increase announced by the Essential Services Commission in February, was the result of a big rise in wholesale prices, and the Victoria Labor government’s instruction to include an implicit carbon price, network benefits and environmental benefits into the tariff.

The ESC has also been asked to set varying tariffs, depending on the network benefit for local grids. But it says it has set a flat rate for the first year to “allow sufficient time for consultation with energy retailers on the implementation of multi-rate feed-in tariffs in future years.”

A draft report from the Queensland Competition Authority is expected to be published by 9 June 2017, after which time the QCA will undertake public consultation on the timing of the peak and off-peak periods examined in the report.  

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  • Chris Schneider

    One win is always a loss in another area. This is a good way to keep batteries out of consumers hands. It’s the split between feed in and grid power that makes batteries more valuable. But this change would spell a massive up take in on roof solar as every house will make ROI quicker!

    • My_Oath

      On the contrary, batteries will give people the flexibility to load-shift and feed in at peak times when the sun is not shining as brightly – the morning and afternoon peaks.

      What it will do is make people less likely to go off-grid. More people on-grid means the poles and wires costs are spread more broadly instead of being dumped on all those who can’t have a 5 kW system: the poor, people in rentals, people in apartments and those who don’t have the roof space/orientation.

      Governments need to bring in systems like this or risk too many going off-grid and leaving a lot of people to pay for the infrastructure who can’t afford it.

      • john

        You have put your finger on it.
        In fact people who have a good roof orientation can put enough PV and battery backup and be energy import independent for most of the year.
        If enough people do this the result is a lowering in cost of power for those who do not have any PV.
        Why because the load is reduced at peak times so the resultant peak price given to the generators will not approach the $13,000 MWH that they gain during peak demand times.
        Once again those people who spend money to help themselves are actually helping everyone else, with out realizing it.
        This has been proved by every inquiry into the effect of PV within the mix of the energy market.
        Remember the old bell curve of energy use now it is a duck curve and the use of battery backup will reduce the size of that head and tail so that a more flat cost of production will result and a lowering in cost of power for all consumers.
        https://uploads.disquscdn.com/images/eb56c227be5faa2a739786912179d0529d83872aed7a35eb866febcfce44672a.jpg

        • Richard

          The idea that home batteries will be used as grid stabilisation or to reduce the cost of electricity is a myth. Because once electric cars become widespread, home batteries will be used to store excess home energy for home vehicles. Virtually no energy will be exported in most urban homes, even with batteries and maximum possible solar arrays.

          • john

            My post did not mention export as I do not see that in the picture until distributors supply batteries and control them for their own use with the left over for the resident.
            As the New Zealand company Vector was doing.
            It is possible that some may decide to pay the customer as AGL is proposing.
            I agree with the usage for EV’s and as i said most not all of their power usage can be supplied by large PV array and storage.

          • Richard

            The coming of the electric car will change the current energy dynamic. Consumers will be more motivated to provide their own energy if it is for fueling their cars, it is more understandable.
            So if they have a solar system they will want any excess to go into their cars. So the current state of the grid will probably remain largely the same even after widespread adoption of home solar and storage.

            The big loser will be the petroleum industry. Power utilities have good times ahead

          • jamcl3

            Because you say so?

          • Richard

            No it’s common sense

      • Chris Schneider

        interesting thought. this would depend on the peak off peak charging. I assumed the status quo which is like 6 til 8 or something is peak. we will need to wait to see how they use this process to encourage and discourage different things. energy trading on peak is already available through a few different services.

        • My_Oath

          Yeah at the moment household sellers don’t get as much as the market prices. I think this might change going forward. A number of ways this might happen:
          Political – the politicians stop pandering to their large electoral donors, and make the market fair.
          Collaborative – a system is introduced to effectively combine the individual 5 kW generators into a larger marketable force – Imaging 10,000 household PV units. Suddenly its 50 MW and many votes that have to be dealt with with potential to force the politicians’ hands out of the fossil fuel piggy bank.

          Probably wishful thinking on my behalf, but it might work. If people want to go off-grid, good on them, but I think we would be better served by having as many people connected as possible and to develop a distributed supply and demand grid that works for everyone.

      • Richard

        Very few urban dwellers will go off grid until there is an approximate doubling of solar panel efficiency. And electric car uptake on a large scale will happen before then, most likely. Which means all energy produced at home will be consumed or stored in battery for the car.

        So, everyone will need to stay connected, unless they don’t use cars, use little energy, or have the opportunity to put up a very large array.
        Or, there is a very significant step change in rooftop solar efficiency.

        Of course, there is also the possibility that autonomous cars may usurp private ownership, so that would increase the possibility of people going off grid.

    • Richard

      No. Anything that increases the uptake of roof solar will also increase the uptake of battery storage later.
      Don’t forget ultimately it’s not just about power consumption in the home. Soon it will be about charging your car and everyone will want a battery then

  • Malcolm M

    One would hope the feed-in-tariff is based on panel orientation. This would be one way of encouraging west-facing panels, whose output would co-incide with the late afternoon peak.

    • Catprog

      If it is based on time then a shadowed west facing will not get as much as a sunny east.

      But time of use will encourage production at peak