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South Australia: Big no to higher FiT, big yes to batteries, big yes to EVs

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The South Australian government is bucking the trend in other states to introduce a higher “fair” feed-in tariff (FIT) for solar system owners who are feeding excess electricity back in to the grid. 
Instead the focus is on storage, and lots of it, according to energy minister and Treasurer, Tom Koutsantonis, speaking at an industry Solar Roundtable event last Friday held by The Solar Project.
 
While Victoria earlier this year doubled their minimum FIT to 11.3 cents per kWh, and NSW last week announced a doubling of their recommended range, Koutsantonis insisted there should be no such increase to a higher minimum FIT for South Australia in response to questions from the floor.
 
He argued that South Australia’s success versus other mainland states in its transition over to renewables meant the focus in South Australia now has to be different.
With 53 per cent of the state’s electricity last year coming from solar and wind – smashing through the 50 per cent target 8 years ahead of schedule – the focus in the state has to be on making all this clean energy more ‘despatchable’, that is, having it more controlled as to when it is released to the grid.
 
That comes down to one word – storage – as the new focus.
 
This reflects the latest report last month from the CSIRO and Energy Networks Australia that concluded that the country’s grid could comfortably accommodate up to 30-50% share of variable renewable sources without issues, but beyond that more storage needs to be added. 
 
Koutsantonis said that increasing the FIT would simply reduce the financial incentive for home and business owners to add storage to their premises. 
The focus of the government is no longer to encourage more solar and wind to be installed – that is happening now irrespective of any FITs and other state encouragements due to the record low prices for installations – but to kick start more storage to be installed across the grid and to have this storage managed in order to smooth out the variability of supply and demand. 
Given recent Deutsche Bank forecasts that South Australia could hit 95 per cent from renewables within just a decade, adding more storage becomes a key priority.
 
The storage sought is to include large centralised units, such as the SA government’s tender for a 100MW/100MWh system for installation this year – which will be the largest in Australia if not the world – plus he listed also pumped hydro and solar thermal plants with their alternate storage mechanisms. 
However, as important to the state is to add batteries to the tens of thousands of homes and businesses in South Australia that have only solar installed currently.
 
When asked about the AGL and SAPN Virtual Power Plants that are being created – using subsidized batteries installed at over 1,000 solar equipped homes across Adelaide – and whether there are any plans to extend this to more home and business owners,  Koutsantonis replied that while he couldn’t pre-empt what will be in the state budget, there might be some encouragement announced to have more such battery systems installed across the state.
 
Surprisingly there was almost no talk by the Treasurer about gas being a despatchable energy source for the state. 
Instead the focus in his answers was on the ability of batteries, pumped hydro and solar thermal to not only be despatchable, but also to do frequency control and other grid stabilisation.  He noted at length that batteries in particular can respond in milliseconds, something that large mechanical turbines can not do.
 
Finally, the questioning turned to electric vehicles (EVs), and one EV owner said that during a recent tour of South Australia Power Networks’Network Innovations Centre, he asked about the ability to use his car’s battery to feed in power to the grid when his car is sitting at home or at work during times of high demand.
He was told it was expressly disallowed by SAPN personnel as it might destabilise the grid.  This was a surprise since other high renewable use countries like Germany are encouraging the adoption of EVs explicitly to help quickly add more storage into the grid in a more cost-effective way compared to just installing static home storage systems that could use the batteries for just the one purpose.
 
Koutsantonis replied that he is working to make sure SAPN and other companies remove these kinds of restrictions and questioned whether the grid operators and power companies had these restrictions for just technical reasons alone or used it more as an excuse to retain their monopolistic profits as long as they could.  
He said he wants in fact many more electric – and hydrogen – vehicles in the state – to make use of  the upcoming large new capacities of lower-cost solar and wind power being installed in the state and reduce transport costs for South Australians. 
He noted that already today travelling by EVs was much cheaper per kilometre than using petrol or diesel, despite today’s still high electricity tariffs. 
Being able to sell excess power from the EV batteries to the grid when needed can be an extra source of incomes for families and therefore should be not only be allowed but encouraged.
 
He went further in conclusion to describe the ideal arrangement in South Australia where an electricity bill eventually switches from being a dreaded burden or ‘debt’ on homes and businesses each month to being an ‘asset’. 
That is, in future all South Australians will also be able to also earn money by being connected to the grid – supplying power and storage, thus spreading the wealth away from just the handful of multinationals who today charge high prices and make huge profits from a lack of competition in the market.
 
So, in short for South Australia, it is a big no to higher FITs, and a big yes to more storage and EVs in the years ahead.
Valdis Dunis is Development Manager for The Solar Project.

  

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  • George Darroch

    The state has the right approach.

    Convincing the network operators on frequency stabilisation will be one of the next tasks. I chatted briefly to a network economist on the plane this weekend, and this was a major immediate concern.

    • john

      From your knowledge it seems it would be pertinent to link a list of battery storage householders into this endeavor.
      I expect that what is needed a large number to ensure that this is able to provide a stable and reliable bank to draw on.

  • Pete

    It’s sensible to have more storage in a high RE grid, but who’s getting the profit from home owners giving out their power for half the price of the wholesale market? Hopefully the SA gov can give us the rest of our deserved FiT via a battery subsidy

    • BushAxe

      Eventually when smart metering allows retailers to buy power from your storage they will determine the FiT to encourage you to sell it.

  • trackdaze

    Thats ok. In a sense battery incentive is a solar incentive.

  • howardpatr

    Seems Koutsantonis wants to keep the fossil fuel retailers noses in the trough by ignoring the move by Victoria and the expected move in NSW to a fairer FIT.

  • Chris Fraser

    FiTs should be priced higher than centrally-generated renewable which relies on a grid to transmit to a customer. The difference

  • Richy

    Koutsantonis- you are a drop kick muppet. We are a de-facto couple on a D.S.P that found some seasonal work and slaved our guts out for over 3 years (after losing 50% of earned income back to Centrelink) saving to afford our solar system only to be getting back 8.2 cents F.I.T whilst paying 37.4 cents from our energy supplier, our average FIT deduction per quarter does not even cover the supply charge per quarter anymore. I believe if the well off could afford solar early and can be paid 44 cents per kWh exported to the grid until 30 June 2028 by the government, surely the rest of us strugglers could at least be given a fair price for our solar- similar to the eastern states in stead of nothing at all. The other option is a tiered price structure for solar battery storage subsidised by the government and structured on disposable income. Let me tell you it is pretty hard for a couple on D.S.P living on $35000 a year to afford anything else. I doubt we will be getting enough money from fair F.I.T’s to be happy still paying electricity bills, I still think we would rather be installing batteries if given a reasonable pricing structure and options.

    • Jo

      If you substitute a good amount of grid electricity with your solar electricity, you will achieve substantial savings on your electricity bill; enough to make solar PV a much better investment than putting money in the bank.

      • Richy

        Jo, you are absolutely correct. We usually export around 55-70% on a good day with plenty sunlight. Unfortunately that is only 4-5 months of the year. We are very happy to have gotten solar on the roof and it has made a big difference to the bills. We just don’t like being ripped off on the F.I.T, getting only 22% of the retail price of imported energy for our exported power, seems a bit shady too me

        • Jo

          What happens at the other 8 months of the year?
          And also what state are you in? There is a new retailer offering 10 cent/kWh.

    • john

      Richy
      Read your inverter figures and your grid connected meter.
      Your solar array puts out x amount of kwr and you import and export y and z amount of kwr.
      Now sit down and work out the amount kwr your house has used from your inverter figures against the import and export.
      As to the export amount at what ever few cents this is per kwr that is a gain.
      The base situation is the difference between your production as against your export is your gain do you follow me?

      • Richy

        The easiest way is to look on the power bill. The amount of power used (imported) from the energy supplier and the amount of solar put back in the grid (exported). We keep daily records of solar harvested by our system and are aware that the 24 hour usage will be made up of both imported and solar energy.

        But what I am saying is say we just exported 900kwh of solar (last quarter) at .082 cent per kwh we earn $73.80 per quarter and daily supply charges are .87879 cents per day.

        Quarterly bills equal around 91 days on average.

        This equates to 91 days of supply charges = $79.97
        Solar exported back to the grid = $73.80
        Difference = $6.17 still owing on supply charges.

        Like I said with these poor F.I.T rates in S.A we don’t even cover our supply charges per quarter.

        • Jo

          This is not the best way to look at it. The feed in tariff is not meant to pay your daily supply charges.
          I suggest to actually keep supply charges out of the consideration unless you compare different retailers.
          Use the savings on electricity from the grid by solar as well as the feed-in income combined to give you an average savings per solar kWh which you can use as the base of your assessment.
          I can provide a spreadsheet for that if some is interested.

    • Ian

      Jo, your post has garnered lots of replies, that’s fantastic. Here’s my take: t. The difference between your ongrid system and an off grid system is you have the grid and the off gridder has batteries and maybe a backup generator. You are in effect using the grid as storage and backup. If you can do better with your own battery/backup system then that’s great, but if not then that’s just tough. You’d have to use more political and other avenues to get your costs down, good luck with that!

  • We don’t need minimum mandated FiTs. As the wholesale prices rise retail competition in SA will steadily increase the FiTs in the market. You can already get 12c in SA. Expect 16c+ soon.

    • Rod

      Who is paying 12c Finn? I think Diamond are paying 11c and their daily supply charge seems OK.
      I’m just waiting for my next credit to hit my bank before pulling the pin on AGL

      • bang your postcode in this tool – then check the box that says ‘Sort by FiT (highest first)’ and you’ll see the current best FiTs:

        https://www.solarquotes.com.au/energy/

        Origin and Click Energy at the moment are best

        • MaxG

          Interesting tool… however, the quarterly prices are pretty useless without being able to enter the PV exports.
          In any case the order of things to achieve savings on a quarterly bill is: 1. low daily supply charge; 2. maximise self-consumption, 3. look for highest FiT.

          • You can enter the PV exports simply hit the big orange button that says ‘enter details from your bill here >>’. It appears after you enter your postcode and hit the green button

        • Rod

          Thanks for that Finn. The Origin plan looks like it will suit me very nicely assuming they allow SA tier one FiT customers.

    • Steve Fuller

      Finn, your assertions are based on the operation of a pure market. We all know that the electricity sector in characterised by highly flawed even failed markets.
      We know that companies selling complex products like mobile phone plans, superannuation products and retail electricity packages are adept at some equally complex marketing ploys designed to obfuscate and confuse the unwary.
      Retail electricity packages probably take the cake for opacity in structure to the ordinary consumer with tariff structures, discounts etc seemingly designed for one purpose only – to confuse.
      I doubt that your data provides a reliable means of fairly comparing packages for individual consumers. If not, we at Solar Citizens SA and even the Essential Services Commission of SA who won’t even rely on the government energymadeeasy website for comparing plans for solar owners would be delighted to examine it!

      • More than happy for you guys to examine it. The good thing about it: you can enter details from a previous bill and see if your new bill with each plan would be higher or lower.

        One thing it does not include is TOU plans.

        Also some of the FiTs are based on buying a new system from the retailer. I’m looking how to remove those from the feed.

  • Kevin Brown

    Wouldn’t the offer of a premium FIT to SA households during peak load periods encourage them to invest in battery storage and export to the grid at those times. Wouldn’t this save the SA Government from having to fund so much grid level battery storage? No smarts or no smart meters?

    • Rod

      There is a staged rollout of smart meters happening. Not mandatory.
      Also time of use rates would be needed I would think and these are also voluntary at the moment.

      • Ian

        The meters wouldn’t have to be too smart. The old economy tariff 33 or 31 could be repurposed for battery households. ie lower rates but for a limited guaranteed supply time each day.

  • Jo

    I can be convinced by reason. And this sounds reasonable.

  • Geremida

    Regarding EV to Grid, be aware that Tesla does not support this. A previous Renew Economy article quoted CTO JB Staubel’s reasoning behind Tesla being unlikely to go this way – see http://reneweconomy.com.au/tesla-explains-evs-selling-electricity-grid-not-good-sounds-47156/

  • Peter

    People call it unfair to be paid 5c/kWh for electrical energy fed in to the grid. The problem is that the system doesn’t want our electricity at any time we care to provide it. They want it when they need it and will pay for it. This means storage and the licence to draw on it when needed. Furthermore, by raising the feed-in tariff, the energy providers are creating a dis-incentive to install batteries.

  • Ian

    A previous article says SA on a good renewables generation day over a poor demand period can already be close to 100% renewables, plus there is another 1GW renewables in the construction phase. This means that all this capacity, and household solar will be competing for grid exports.

    South Australia needs interconnectivity with its (laggard) neighbours and it needs storage. Why not help households along with battery storage?

    Either in the form of subsidising price directly or setting up a bulk buy cooperative or by creating generous FiT’s for high wholesale price periods. Or by setting up a home battery tariff with very cheap rates but peak demand time interruptions.

    This last point could see a rate of 10c/ KWh or so, but no supply between 6 am to 8am and 6pm and 9pm for example.

  • Craig Allen

    This article starts by implying that SA doesn’t want to pay a fair price. Surely it’s possible to pay a fair price that is structured so as to provide an incentive to install storage and to have it configured to deliver to the grid when it is most needed. In fact, if they don’t pay a fair price then residents will be far less motivated to invest in storage.

    And if a large chunk of generation comes from rooftop systems rather than being payed to big companies, then that is money that stays in the state, which would surely have a positive effect on the SA economy.

  • Coley

    Looking at this article, and many others from RE in the last few months, it seems renewables have finally thrown off the pall of uncertainty, deliberately cast by the mad monk and his deranged band of followers.
    Crack on and show the world how solar and wind ( and storage, let’s not forget storage) can change society and rapidly overthrow the imbedded incumbents.

    And if you can provide an interconnecter to deliver sunshine to Northen England, it would be greatly appreciated-:)

  • phred01

    Batteries are going to be the death knell to price gouging incumbents

  • Steven Zilm

    The minister for White Elephants wants to install some dodgy 250MW gas turbine that is only going to run in emergencies… I hope they are going to locate right next door to the desal plant… Tom has absolutely no concept of how battery storage works at a household level. If you do not value my surplus energy appropriately and I’m forced to store it, there is no way I’m going to make it dispatch-able, in fact I’ll encourage and advocate we go the other way completely – off the grid or to the edge of the grid. The only positive I could take from the round table was he’s considering incentive’s for battery storage… but does he realise that there is no Australian Standard for lithium batteries yet????

  • Tom

    Worth pointing out that SA rooftop solar’s dispatch weighted price is 11 cents/kWh over the last few months. That said I like the idea of a lower export price as it encourages battery use.