Networks offer "super cheap" pricing to soak up Australia's solar sponge | RenewEconomy

Networks offer “super cheap” pricing to soak up Australia’s solar sponge

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Networks offering “super cheap” rates in middle of the day to soak up “solar sponge”, part of a range of proposals to allow more solar into grid.

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Network operators in Australia are starting to offer super-cheap rates to encourage consumers to switch their consumption to the middle of the day as part of a radical re-shaping of the industry to try and soak up the “solar sponge” and encourage yet more PV into the system.

South Australia Power Networks next week will present the final draft of its proposed tariff structure which will offer significant discounts that it hopes will encourage households to switch “variable” loads such as hot water heating, pool pumps and other appliances to the middle of the day rather than overnight.

The proposed cost for the “solar sponge” – to be offered between 10am to 3pm – will be just one quarter of the normal network tariff, and one half of the “off-peak” that currently comes into effect around midnight.

It is one of a number of initiatives being proposed and contemplated around the country as networks and market operators, and energy generators, consider the implications of the enormous amounts of rooftop solar being installed in Australia, and the impact it is happening on demand.

Small scale rooftop solar is being installed at record rates, will likely total around 2GW in 2019 alone and shows no sign of slowing down. And while it is sometimes labelled a problem, there is a growing acceptance that it is inevitable, and can be turned into a major asset to the grid.

Larger scale solar arrays are also being installed in industrial locations at a rate beyond even the most ambitious scenarios, and this is contributing to the so-called “solar duck curves” that hollow out grid demand in the middle of the day.

This has an impact on existing fossil fuel generators, who now have less demand to meet in the middle of the day, and on large scale solar plants who are now encountering lower prices at the time when their output is greatest.

Networks know that the uptake of rooftop solar will continue to grow, and so they should as consumers look to take control of their options with new technologies. Within a decade or two, nearly half the energy system needs will be met by “distributed energy resources”, which will comprise rooftop solar, battery storage, electric vehicles and demand management.

The networks are looking at a range of different options to manage and control the output of rooftop solar. Some are focused on time varying tariffs that would encourage batteries storage – but at different times of the day.

Others are focused on seasonal “export limits” that may impose restrictions on certain times of the year (such as mild but sunny spring days) when “operational” demand on the grid heads to record lows.

This is particularly topical in states such as South Australia and Western Australia, where “operational” demand is expected to hit zero within four to five years if no action is taken. The “seasonal” export limits may replace current absolute limits, where new installations are often restricted to a maximum 5kW output, or in some cases none at all.

  1. “To respond to the change in the residential daily profile, we propose to introduce a ‘solar sponge’ component offering a super cheap off-peak charge within the ToU (time of use) tariff for the time when solar exports are high,” SAPN says in a submission to the market regulator.
  2. “We are also proposing incentives and time clock adjustments to shift some hot water away from the 11:00pm spike in demand and into the solar sponge. This is more of a residential issue than a business issue.”

How it is implemented, however, will largely depend on if, and how, retailers pass on the new tariff options to their customers, and to nature of metering in households.

In South Australia, for instance, some 87% of households have so called “accummulation” meters, which make it difficult to switch the timing of hot water loads – although deals with retailers, new installations, and the increased uptake of rooftop solar should see the share of more flexible interval meters grow significantly over the next five years.

  • “The intent is to change behaviour in a way that will benefit customers in the longer term by reducing the need for future investment in the network and better utilising cheap solar energy generated in the middle of the day,” says SAPN spokesman Paul Roberts.
  • He said customers would have two windows of low pricing to schedule energy use (1am-6am and 10am-3pm). Many appliances these days can be set to operate on a  timer, and electric vehicle charging also can also be undertaken in off-peak times if retailers offer a residential TOU tariff.
  • “By encouraging more energy use in the middle of the day we will be able to facilitate more solar rooftop exports which increases the amount of low-price renewable energy available in SA, better manage the impact of solar on the grid and will favourably influence reducing the evening peak,” Roberts says.

“How do customers get rewarded? The off-peak charge between 1am and 6am will be about 9ckWh less than the peak charge and the 10am-3pm solar sponge rate will be about 12ckWh lower than the peak charge.

“Imagine having an EV that uses 4MWh per annum – much better to charge it in either of those two off peak periods (saving the customer $440 or $560 respectively per annum) and avoiding EVs being charged during peak periods because that would mean we would need more generation and grid capacity.”


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  1. Ken Dyer 6 months ago

    I think a problem with trying to switch loads to the middle of the day, is that people are at work, and there is no one on hand to fire up the washing machine or the dishwasher or even run the AC to get the temperature down for when evening arrives.

    Maybe as part of the incentive, power companies might like to offer automated solutions so that absent householders can automate and monitor their appliances from work.

    • Steve h 6 months ago

      Set your washing machines to the right time, charge your electric car, set your AC, all easy once you can see the incentive. Even tweekjng jot water services is relatively straight forward if there is a clear incentive.

  2. Craig Fryer 6 months ago

    TOU prices are a silly move and already out dated. This is particularly for SA where there is lots of wind that can create negative wholesale prices at any time of the day. With all these home automation options available, people could easily turn on and off devices depending on their own solar pv output or tariffs linked to the wholesale pricing.

    The diagram above suggesting much of the peak could be moved to the middle of the day is over optimistic. In SA much of the 11pm to 5am load could be moved to the middle of the day or a better time as that is mainly hot water heating. In terms of evening peaks, I hope there aren’t too many pool pumps running at that time, but some washing machines or dishwashers could be moved to a better time.

  3. Hettie 6 months ago

    That would be a big incentive for people otherwise reluctant to set the aircon to 25°C, starting up at 14:00hrs, to get the house temp down before the worst heat of the day, so that it stays coolish and avoids that mad tendency to wait until getting home from work to a sauna, and turning the setting to 18°C, by which time it is far too late. Not only the air in the house, but the fabric of the house and everything in it is 35°C. Achieving comfort takes ages, and far more power than maintaining a moderate temperature. Cheap power might just bring sanity. Subsidies to replace old, inefficient machines with new, smart ones, would help a lot more.

    • rob 6 months ago

      Nail hits Head! Nothing more to add! cheers Hettie

  4. Michael Murray 6 months ago

    In South Australia, for instance, some 87% of households have so called “accummulation” meters, which make it difficult to switch the timing of hot water loads –

    Right. That’s your problem. So why not give me a smart meter that shows me the instantaneous total cost of the electricity I’ve used since the last bill I paid and the current rate. (Heck you couldn’t even remotely read it. ) Once I can see that switching appliances to the middle of the day reduces my bill I’ll sort the rest of it. Me and the other 87%.

  5. Mike Shackleton 6 months ago

    Or, conversely, you can go with a retailer that sells you electricity at the spot price, warning you when a price spike is occurring. There is a new retailer in SA and Victoria that does just that if you have a smart meter installed. They are also about to offer solar credit trading peer to peer using the POWR crypto token.

    • Jonathan Prendergast 6 months ago

      Network charges (in this story) and retail/energy charges (eg. Amber) are different.

      Amber would still have to apply the network charge for the time of consumption. This means that additional network charge will be lower during daytime hours

  6. Peter Farley 6 months ago

    Like all progress it will be slower than we like but smart control through smart meters, ripple control or smart home controllers like the Nest or its many relatives will revolutionise energy use in domestic and even in commercial properties over the next 5-7 years, because too many people will lose too much money if things don’t change

  7. Conrad Fuller 6 months ago

    I am on the Ausgrid network, I looked at their ‘Time of use pricing’ page. No change to the TOU schedule at all. I suspect I may be waiting quite some time before I do see any changes!

  8. rob 6 months ago

    Again with the stupid spam Mike Baird/ BITCOIN ADVERTISING…….Get your act together on his please Giles! It is so so annoying and should have been dealt with months ago when I first bought it to your attention. It demeans your otherwise excellent sites! Cheers rob

  9. Steve h 6 months ago

    Pity the gentailers seem to be running away from letting me charge my electric car during the sponge time and keep the house warm / cool with the enourmouse amount of energy stored in my car. If they stuff around a few more months I will finish my own micro grid and they will miss out yet again

  10. Alan Wilson 6 months ago

    Good idea do it … but we have to have more pump hydro that can save us …

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