With the recent announcement by NSW Environment Minister, Rob Stokes, that he has instructed all NSW government departments to carry out an audit of available roof space over 100sm to assess its suitability for solar, my heart skipped a beat. Have the powers that be finally realised the value solar holds for the State’s economy and its people?
Once this audit is completed and departments start to roll out installation of solar panels on the roofs of our schools, TAFE’s, Police stations, Fire stations, Ambulance bases, hospitals, Roads & Maritime Services offices, DOCS offices, etc. imagine the long term savings to these departments’ budgets. Yes, there could be an up-front cost associated with the initial purchase and installation but this is very easily offset by the long term savings generated by these solar arrays. Alternatively, they could adopt solar leasing models for no upfront costs.
Not only that, think of the jobs to be created by such a large scale rollout of solar in the state. This has the potential to create many opportunities for NSW to lead the way in developing new apprenticeships and traineeships focused on the solar industry. Our high school students are already studying solar and engineering. This has the potential to herald NSW as the solar capital of Australia!
But why stop there? Have the powers that be in Macquarie Street and Phillip Street got the vision and courage to restructure the electricity industry to ensure the consumer benefits from cheaper electricity and the States energy is sourced from economically and environmentally viable options well into the future?
The NSW Government intends going to the next state election in 2015 to seek a mandate to sell 49% of Networks NSW which predominantly provides the ‘poles & wires’ for our electricity supply. They are hoping to raise between $15 to $20 billion dollars through such a sale and have stated they intend using these proceeds to fund major infrastructure within the state.
But, seriously, would you invest in Networks NSW currently? Would you want your superannuation fund putting your money into a company with aging assets with a high ongoing maintenance requirement and facing a potentially dramatic reduction in its customer base within 5 years? Do you want the electricity retailers to invest in Networks NSW so they can then argue that electricity prices have to increase so they can ‘upgrade’ the network to guarantee supply (and their profits)?
The age of requiring electricity to be transmitted over long distances is almost at an end. Residential Battery Storage (RBS) is here now and holds the key to NSW’s economic and energy future. As RBS enters the marketplace over the next 12-18 months Networks NSW existing business model will start to falter as it becomes clear that the future of electricity supply in NSW is suburbs and towns establishing micro grids and supporting each other.
You may doubt that this will occur, but I draw your attention to recent news reported in RenewEconomy, as well as the wider press. That being the fact that ARENA has invested approximately $3.8 million in Sunverge to enable them establish operations here in Australia and to market their SIS storage system (the very same unit currently being utilised by Vector Energy in New Zealand).
So what can the NSW Government, and the board of Networks NSW, do to ensure there is interest in any potential sale of Networks NSW?
Restructure the business now!
Move from a model solely focused on distributing electricity to a model based on Vector Energy’s current operation, that being as a provider of electricity supply assets (storage) through long term leasing arrangements.
Think of this, Networks NSW enters into agreements with Sunverge, and other storage suppliers, to provide storage systems. Networks NSW then provides such systems to the consumer through long term leases at a low, and constant, monthly fee which is managed by the electricity retailer through their usual billing arrangements. NSW consumers are then actively encouraged to install solar to generate more of their own power and reduce their reliance on transmitted electricity thus reducing their overall electricity costs long term.
By moving to such a model now Networks NSW has the potential to secure more than the projected $15-20 billion dollars the NSW Government is hoping to raise as investors will look very favourably at a company which has secured long term revenue sources. If Networks NSW announced that it intends moving to such a model, and the NSW Government guaranteed to re-invest at least $2 billion dollars from the sale back into Networks NSW to enable it to invest in the necessary assets it would generate a lot of interest in the potential sale and would generate voter support in the proposal.
But work needs to be done now to determine the mechanics of the model and to ascertain the types of systems to be utilised.
There are currently 2 trials of RBS underway in NSW, one in Newcastle and the other in Newington. Both are relatively small scale and focused on solar arrays of approximately 3KW or less in size.
What’s needed now is a 2nd stage trial focussing on areas which have existing larger scale solar arrays and much greater electricity usage demands as well as how RBS at medium scale usage areas such as schools etc. will impact upon total energy usage.
There is currently growing community support for a 2nd stage trial to be carried out in outer western Sydney as the region has significantly different characteristics to the locations of the 2 existing trials. Primary amongst those characteristics is the fact that the average size of existing solar arrays in the region is currently 4.7KW and growing as more and more households put on larger solar arrays to offset their power usage.
One suburb in this region which has clear potential for such a trial is St Clair, in the Penrith area, as it has a substantial number of existing solar arrays which exceed 4KW in size and the suburbs high school would be an ideal location to implement medium scale storage as it is in the process of re-building its main building after losing approximately 30 classrooms, it’s library, and other infrastructure including a large solar array in a major fire recently.
This trial could set a benchmark for the implementation of storage across the state.
Hopefully Networks NSW and the NSW Government will take up the challenge of ensuring NSW consumers receive the benefits of cheaper electricity (and much more stable prices) as well as securing NSW energy future which is currently presented by RBS.
It’s time for prompt action to ensure we all benefit.