Categories: Commentary

Ergon Energy looks to take some customers off the grid

Published by

Queensland network operator Ergon Energy is looking to take some remote customers off-grid rather than continuing to pay for the maintenance and upgrade of part of its sprawling network of 65,000kms of poles and wires.

Ergon Energy CEO Ian McLeod says the costs of new technology – such as solar and battery storage – meant it now made sense that some customers have stand-alone energy systems rather than being connected to a centralised power supply.

“We will be looking to take uneconomic supplies off the grid. We’ve been approached by a proponent who got a few customers out there, put standalone energy systems in,” McLeod told RenewEconomy on the sidelines of the All Energy conference in Melbourne.

“When you are at the edge of the grid … it starts to stack up when you take customers off. That’s of benefit to the rest of the customers too.”

Ergon Energy operates one of the biggest networks in the world – it covers 40 per cent of the main National Electricity Market by area – but only has 7 per cent (around 700,00) of the NEM’s customers .

That means it relies on a Consumer Service Obligation to effectively “cross-subsidise” the cost of delivery of centralised power. That can be up to $14,000 a head per annum for remote areas, and an average of $2,500 west of the Great Dividing Range – in other words, much of its area.

McLeod is pushing for those costs to be “visible” so that Ergon Energy – and policy makers – can make choices about how electricity could be delivered.

“I’d like to see the cost of those connection to be visible so we can look at alternative technologies and reduce our costs,” he told the conference. “Some solutions will be off grid, and some solutions will be on grid.”

Ergon Energy this week announced it would start rolling out a series of battery storage installations to deflect the cost of grid upgrades.

A first round of 20 such storage devices – 100kWh – will be installed from next year. McLeod says there could be “hundreds” of such installations located along its network.

“The network was designed for low cost supply of light and power years ago. But it doesn’t meet today’s requirements,” McLeod told RenewEconomy later.

“The advantage of the GUSS battery storage systems is that it is mobile, it deals with voltage quality issues, and it can provide more power more needed.

The units will be installed next to substations and along the line. “In the past, it would take 12 months to get an easement. Here, we just provide a pad next to the line and put battery unit in there.”

McLeod says the networks and the energy supply industry was clearly evolving, and quite rapidly. Ergon Energy, he says, had been able to deflect more than $600 million of network augmentations in recent years due to energy efficiency measures and demand management.

Storage and distributed generation would provide the next opportunities to do the same. The network, he says, would become a “market enabler”.

“We don’t care if the electricity supply comes from the roof, from the sugar mill, from the rubbish tip, or from centralised power station. We just want the market to determine what the best price is.”

 

Giles Parkinson

Giles Parkinson is founder and editor of Renew Economy, and of its sister sites One Step Off The Grid and the EV-focused The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.

Share
Published by

Recent Posts

Surge in solar, wind and battery investment sets pace for 82 pct target. Can Australia keep it up?

The politics remains shaky, but strong investment in solar, wind and energy storage in the…

12 February 2025

SwitchedOn Podcast: Renewables must fit communities, not the other way around

Director of RE-Alliance, Andrew Bray, says local energy hubs could bridge the gap between government,…

12 February 2025

Gold Fields awards contract for another wind farm at remote WA gold mine

Gold Fields awards contract for a wind farm that will help deliver a more than…

12 February 2025

Biggest coal generator has zero appetite for nuclear in a market where grid flexibility is king

AGL CEO says Australia's biggest baseload generator has no plans for "always on nuclear," but…

12 February 2025

Fortescue accelerates “real zero” campaign amid grim times for climate action

Fortescue has published an open letter calling for the Australian government to commit to the…

12 February 2025

AGL targets another five big battery projects amid falling costs and grid price volatility

AGL details plans to lock in another 1.4 gigawatts (GW) of grid scale battery storage…

12 February 2025