If Victorian distributors think that the state’s more southern latitude and less ideal climate will make them immune from the most serious impacts of the power utility Death Spiral, then they should think again.
The reality is that things are changing and fast. Installed off-grid battery prices will drop by more than two thirds versus today’s cost by the end of the decade as battery production becomes the next solar, and wind – with a Chinese state of the art manufacturing – scales up. The cost of unsubsidised solar panel installations is predicted to almost halve in price in the same period.
In the past, many thought of Victorian power distribution networks – particularly those with customers south of the Great Dividing Range (where it is less sunny) – were as immune to their customer bases leaving the grid. However, today, the scenario of large numbers of customers leaving the grid is highly likely if the networks try and squeeze power customers for more to maintain their existing unsustainable uncompetitive business model as overall volume demand and critical peek capacity requirements decline.
If you think Melbourne’s short cloudy winter days means rooftop solar power can only provide 10-20% summer solar, think again. A new possibility has emerged, given the massive drops in the price of solar panels and increasing efficiency (watts per square metre),where a customer can install an over-sized PV array for their inverter (say 300% or 400% of their inverter capacity rather than a bigger inverter as inverters still cost money that can be saved) using dirt cheap panels e.g. connecting 15 kW of panels to a 5kW inverter. Combine this with 10kWh or 20kWh of batteries and a PV system owner will get much higher winter solar power production. This option is available to about the two thirds of Victorian customers who live in detached houses with sufficient roof space.
With such a system, customers could disconnect from the grid nine months a year, reconnecting on approximately May 15 and then disconnecting again August 15, and still produce the majority of their winter power requirements relying on the grid for a few hundred kilowatt hours of last resort. ($50-$100, of off peak power).
The driver for this move to oversize PV arrays will be the distribution networks’ poor response to solar. They plan to recover their revenue by the fixed daily charge to top up revenue from falling demand. The networks, Left to their own devices (Without proper regulatory or government oversight in the interest of consumers) will be charging $3-$4 a day for households to access the network, so a customer who disconnects will avoid – $820 – $1100 a year in these charges.
If the networks respond by trying to lock customers in with 12 month minimum connection terms or introduce exorbitant connect and disconnect fees, then it will detrimentally affect the poorest in society who suffer from the bulk of disconnections for not paying bills, and who move from supply address to supply address more often than any other part of the customer base. This would look very bad for the networks as they slug battlers in an attempt to put a lid on mobile customers who are exiting the grid in favour of their own capacity and kWh solution through solar and batteries. This would all be in a vain attempt to protect their old out-dated business model.
But there is another way that works for everybody!
The alternative for the networks, so as to not cause their ultimate downfall and to keep customers connected, maintaining a business model with all customers (albeit many that will generate much less revenue) is to at least have those who want to look after their own capacity and volume requirements paying a minimum amount to match the service level they actually require. (Which will ultimately be 1kVA (1kW) or 2kVA (2kW) of capacity) instead of paying for 20kVA all you can eat (with an average of 5kVA during super critical peaks).
Charging customers per kW of network capacity they require would allow solar customers who invest in their own systems to buy 1-2kW of usage from the grid, instead of a flat rate for capacity access regardless of how much capacity they use (even during a super critical peak when capacity is at a premium) which is the situation today.
The networks have a choice and yet they seem to want to bring on their own death spiral through upping their customers’ daily service charges to counter reduced consumption by solar and energy efficiency.
This is more brown madness –and ironically network operators aren’t even in the business of selling fossil fuels just transporting electricity and it shouldn’t matter to them which kind of electricity so they should really embrace and get with the renewable program so that they can share a future with renewables rather than be remembered in the past along with dying centralised fossil fuel behemoths