Senior Abbott MP concedes Australians ready to leave the grid

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Senior Coalition MP says solar and storage will take consumers off the grid, so best to sell networks while they still have value.

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A senior member of Australia’s ruling Coalition has conceded that Australian consumers are ready to leave the grid, and rely instead on solar and storage, and suggested that state-owned assets such as electricity networks need to be sold quickly before they lose too much value.

cioboThe admission was made on ABC News Radio on Friday morning by  Steve Ciobo, a parliamentary secretary in the Tony Abbott government and the Federal Member for Moncrieff, in Queensland, where the state government is looking to privatise its energy assets.

The comments are interesting because it is the first time that a senior Abbott government member has acknowledged that rooftop solar and the emergence of battery storage is going to disrupt the market and devalue network assets.

It is signifiant because it recognises what is widely accepted within the industry itself – that cleaner and distributed energy is going to grow, and underlines why the Coalition governments in Queensland and NSW are keen to privatise their electricity grid sooner rather than later.

“If you look at for example, the poles and wires business, there is no doubt that there is massive change happening,” Ciobo said in the interview.

“That’s a market where I have little doubt in the future that you’ll see more and more people drop off the electricity grid, because they’ve got batteries and solar panels. So I think that the sooner we lease assets like that and realise their value, the better, because it’s an asset that just becomes worth less every single day.”

Interviewer Marius Benson then asked if the assets held any value, given the likelihood of grid defection. Ciobo said that would be up to the market, but the governments would be wrong to hang on to the assets if they were going to be worth less in the future.

Ciobo is the Parliamentary Secretary to the Minister for Foreign Affairs (Julie Bishop), and the Parliamentary Secretary to the Minister for Trade and Investment (Andrew Robb).

Australian network operators are becoming increasingly aware of the threat of mass grid defection. A CSIRO study that included the networks suggested nearly half of the country’s energy requirements could be sourced from distributed generation within a few decades, and one third of consumers could quit the grid if networks did not offer an economically competitive service.

Numerous analyst reports have spoken about the economic drivers of grid defection – it will be cheaper for consumers to have solar and storage than remain connected to the grid within a few years – and some networks are beginning to re-callibrate their business models.

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37 Comments
  1. Chris Fraser 5 years ago

    I’m undecided about defection, considering all the imported energy we’ll need to permit a decent EV commute distance. The thought that a Government would try to offload a grid to private interests, due to anticipated asset write-downs, speaks of ‘everyone for themselves’. It implies they’ve abrogated themselves from adequate governance of utilities, when people often depend on utilities to be accountable and treat them fairly. Clearly, they don’t have a thought in their head that if defection is true, the asset manager becomes another Government expense anyway.Even so, i’m glad that i can agree with Mr Ciobo’s sentiments about disruption. Perhaps he’s ambitious and wants the PM’s job. Any takers ?

    • Harry Verberne 5 years ago

      I would prefer utility assets be retained not sold off. My main concern is that they would be sold with some sort of guarantee that attempts to stymie solar an other renewables by high daily fixed prices or nw access which partly negate the user trying to minimise their consumption.

      I agree, looking ahead with the likely growth if EV’s that the grid will be important. But what we need is a regulator, be it government or other, that is focused on the future and the little guy rather than the incumbents.

    • suthnsun 5 years ago

      Realistically Chris, a decent EV commute still has to be quite short say less than 50km total a day at the outside. Even an EV powered totally by renewables will have an unworkable CO2 footprint beyond that. Within that type of constraint (however it is arrived at) EVs have a very modest daily energy requirement and the options for storage plus renewables plus efficiencies are wide open wrt the grid.

      • Chris Fraser 5 years ago

        Indeed I for one sincerely hope so. The lesser commute distance for as many as possible, also requires success in town and transport planning, jobs where they are convenient, options for jobs slightly further afield, etc, etc. Your average truckie or business rep, of which there are not many compared to all users, would need to be catered for differently.

        • suthnsun 5 years ago

          Yes, agree with all that. I think the big paradigm trick is to get people generally thinking in terms of carbon constraints in the conduct of life in addition to money , view, culture entertainment etc. Another major dimension of constraint in life is not a welcome thing but is necessary.

  2. Geoff Crosby 5 years ago

    There is a movement in other countries now to reclaim their electricity assets. In 2013 the residents of Hamburg voted at ballot to put the electricity , gas and heating grids back under control of the city. In 2011 in Boulder, Colorado a ballot was passed to give the city the authority to creat an electricity authority. This was done when the city realised it couldn’t meet its goal of reducing emissions under arrangements with the private electricity suppliers. There are many more examples.

  3. Rob G 5 years ago

    Climate change doesn’t scare many LNPers – they don’t believe it is happening. Financial losses however do scare them! Abbott knows this and has tried to take a heavy handed approach to ‘forcing’ us to use coal to prop up the industry. In the end it won’t work and now the LNP bean counters see the losses coming and the next level of panic is setting in. Thank goodness it just happens to help address climate change too.

  4. Vusumuzi 5 years ago

    Mr Ciobo’s takes a very narrow view into the electricity issue. First issue, no investor will buy a business that is going down unless someones give the buyer a guarantee of some sort for a certain number of years. The other issue, is that we are taking a very narrow view when we talk about new technology as if it is a once off payment. I read an article that says to install about 5kW of solar and battery banks, it will cost around $18000 and this is very huge investment, I will actually prefer to pay the $300 per three months than to payout the $18000 + maintenance cost which no one talks about it at the moment.
    Currently the state governments are the sole owners of the utilities and the employees have no share in the business, maybe the government should create a system where employees can become part of the shareholders, by buying a share of the utility. Employees currently are buying stocks from other companies instead of investing in their own companies (like buying solar system from other suppliers and let your very own company to suffer will not take us anywhere)

    • Roger Brown 5 years ago

      Maintenance costs ? washing panels. My solar Hotwater system has been heating my water for over 20+ yrs . I have washed it 3 times in that time ( too high on roof at 26 degrees angle ) and I don’t like heights. Batteries will get cheaper , thanks to Tesla building a $5B Battery Factory for his cars, which will be a battery bank at home . Do you think its going to stay at $300 a 1/4 ? my 3kw solar power produces over 13-15 Kwh a day in summer and i use only 7-8 kwh per day , the rest I sell back to Origin at .44c + .06c from Govt. and Origin .Wish I had put in a 5 Kw $ystem .

      • Andrew 5 years ago

        You can oversize your solar by 33% above your inverters nominal AC output, and still keep your FIT. (This depends on max string voltages)
        Unless Tesla builds a car for the people, most of us will never afford a Tesla. Maybe a leaf and more likely in the future a Cherry or Hyundai electric. Unfortunately the word is that the Tesla car battery factory won’t significantly drive down the price of lithium storage.
        At around 80 cents a watt currently for cheap solar panels without a grid connect STC subsidy, I can see stand alone systems that run part of your house and partially charge your 2-10kw plug in hybrid car from stored daytime solar might see a market.

        • Calamity_Jean 5 years ago

          The Tesla Model 3 is supposed to be coming out in 2016 or 2017 for less than $50,000, probably quite a bit less. A lot more people will be able to afford that.

          “Unfortunately the word is that the Tesla car battery factory won’t significantly drive down the price of lithium storage. “

          What I’ve heard is that once the Gigafactory is up and running, battery prices will come down sharply. Where did you hear that there would be little change?

          • onesecond 5 years ago

            Elon Musk says it will bring down current prices at least 30%. He ususally makes good on his word.

          • Calamity_Jean 5 years ago

            I’m looking eagerly forward to it.

          • Andrew 5 years ago

            Honestly I can’t remember where the article came from. If the Tesla battery starts production in 2017 it could be some time until there are surplus batteries for home use produced, or a smart grid is implemented to utilize home storage either from car storage or battery banks.
            Also the greater demand for lithium might drive prices up.

          • Calamity_Jean 5 years ago

            I’m sorry, I misunderstood you. When you said this in your earlier comment:

            “Unless Tesla builds a car for the people, most of us will never afford a Tesla.”

            I thought you were referring to the price of batteries used in electric cars, and in particular to the price of Tesla car batteries. I didn’t realize that you were interested in using car batteries for home storage of electricity. You’re right, it will probably be quite some time before automobile batteries become available for installation in homes. Until then, there are several companies that are working on supplying batteries for home use that are not appropriate for car use.

            http://www.eosenergystorage.com/technology-and-products/home/

            http://www.balqon.com/store-2/#!/~/category/id=2860254&inview=product38377246&offset=0&sort=priceAsc

            http://www.aquionenergy.com/

            That last one has batteries that are not based on lithium, so a shortage won’t affect them. Prices are still rather high, but I expect they will be coming down in a few years.

        • Roger Brown 5 years ago

          Tesla have a $35,000 7 seater SUV coming soon .

    • BarleySinger 5 years ago

      I have a quote in my email right now for $23,500 and it is a 10kw monocrystaline system with 10kw battery backup. The change in my mortgage (even in a bad interest rate) would be lower than my electric bill is.

      • Paul Lemming 5 years ago

        Barley , Have to ask ,10kw of battery storage meaning 5kw usable? at a 50% depth of discharge @ c10 or C100 , at c100 you’ve got around 2-3kw’s of usable battery.
        A good 10kw Solar install should be the best part of that $23,000 , and you reckon your getting battery storage to go with that ?, good luck.
        remember you’ll zero feed control , once batteries are connected , you can’t feed to the grid, so you ‘ll need the utility to sign off on the grid protection , thats $2000+.
        Maybe get a few more quotes and ask around abit more.

        • BarleySinger 5 years ago

          Paul.

          About 7 years ago when I started looking around, I had no intention of putting a battery bank on the system. Then PV prices dropped… a huge amount, and they kept on falling. The cost of large PV commercial generation is now about 2/3 the cost of gas generation (in the middle eat, where they are right next to the gas).

          Now days 10KW of PV is less than half what it was 6 or 7 years ago. The cost of smart inverters and deep cycle batteries has also dropped a large amount – so much so the AGL admitted recently that Aussies are about ready to leave the grid (or only stay hooked up for cold foggy winter days).

          The batteries I would be getting are deep cycle gel cells and the two 5KW inverters are solar-x (about the best you can get).

          As for the idea that 10Kw costs $23,500 all by itself … well it did – over 7 years ago.

          • Paul Lemming 5 years ago

            “As for the idea that 10Kw costs $23,500 all by itself … well it did – over 7 years ago.”

            This statement totally contradicts !

            This Statement

            “I have a quote in my email right now for $23,500 and it is a 10kw monocrystaline system with 10kw battery backup.”

            Barley , As per my previous question , there is no way you could get 10KW Hybrid System for $23,500. No Way !
            Wish it was then everyone would be leaving the grid.

          • BarleySinger 5 years ago

            Paul, stop being a troll. Go get some quotes for yourself.

            Here was my middle quote (not lowest or highest) :

            >>>>From: “Solar Link Australia”
            >>>>
            >>>>
            >>>> * 10.0Kw PACKAGE $23,990 Fully installed (Fitted with 40 x AP
            >>>> 250W
            >>>> Mono Panels & Sola-X HYBRID inverters and 20.16kwh (Gel) batteries
            >>>> with cabinet)

          • Paul Lemming 5 years ago

            Barley,

            I build these things for a living, and questioning doesn’t make me a troll, this is an easy attempt at discrediting me , when I’m questioning your integrity . So I don’t need to get a quote.

            Like I said , if the batteries are rated are rated at c100 , which I bet they are, and Gel can at best go to 80% depth of discharge.
            At the correct rating of c10 , discharge over 10 hours , not 100 hours. then you may have about 4 to 6 kw’s at best of storage.
            Batteries are sold in Amp hours also Barley , do they state the AH rating and @ c10 or c100.

            Also anything over 5kw Inverter sizing has to be 3-phase nowadays, and the Solax is a single phase inverter, good luck getting approval Barley.

            Once you fit batteries your are not allowed to feed back to the grid and I don’t see a ZERO – FEED device listed, I don’t see the battery managers required in your brief description of a quote.
            So while you make think this is feasible, I beg to differ.
            I think you’ll find a decent 48v battery bank will be the best part of $15,000, cabinet $2000, 2 x 5kw hybrid inverters will be $6000, theres $23,000, you haven’t bought the Panels, the Zero Feed, let alone got it installed yet, plus the Solax, needs the battery managers, etc,etc thats all.
            I’d rethink this “quote” Barley

          • BarleySinger 5 years ago

            No it does not. Re-read.

            7 years ago I was *not* going to do a battery bank & all that. The inverter tech for battery banks was just not ‘there’ at a reasonable price yet and battery prices were too high.

            But as I am disabled, and it takes time to save, I kept watching. Then about 4 odd years back HUGE numbers of people here were putting PV on their homes because it finally COST LESS than paying your utility. Those were nearly all “grid connected systems”.

            But over the last few years the inverter tech (those with battery banks) got better and less expensive, and battery costs went down a fair amount, and the cost of PV panels dropped a HUGE amount.

            When the Sola-x inverters came out (and dropped in price) too and with the cost of monocrystaline panels having dropped by 60%+ over time, it did not make financial sense NOT to go solar.

            I would rather have super-capaccitor tech instead of chemical batteries, but it will be a decade (at least) before I can do that. The hemp fiber carbon capacitors (charred hemp fiber is a wonderful graphine replacement at far less cost and a lot less pollution) are simply not “buyable” yet and I have no desire to pay MORE for my electricity than I need to.

            Where I live far more people have solar panels on their houses, than do not… even though we have about the crappiest “pay back” $cash$ from the utilities on the power we generate.

            In point of fact, it was “roof top solar” that was responsible for keeping the South Australia grid *up and running* in the Aussie heat waves of the summers of 2013 & 2014… and it happens that the cost of PV panel based electricity, costs the generating companies so much less, that several EXISTING coal fire plants are sitting in temporary shut down (only temporary, because of the massive cost of a proper shut-down) with non plans as to WHEN they might ever get used again.

          • Paul Lemming 5 years ago

            well , seems I might be right afterall Barley.
            Like I said , i think you need to check that quote.
            anything over 5kw’s needs to be zero feed and more than one phase , i.e 3phase connection

        • BarleySinger 5 years ago

          It means a 2 inverter system (each of the two is a 5KW with 5KW of deep cycle gel cells on it). This my “middle of the road” quote.

          >>>>
          >>>> * 10.0Kw PACKAGE âEUR” $23,990 Fully installed (Fitted with 40 x AP
          >>>> 250W
          >>>> Mono Panels & Sola-X HYBRID inverters and 20.16kwh (Gel) batteries
          >>>> with cabinet)

          Of course I will also be fixing the roof first with better insulation (add in another $15,000 to $18,000) but that just has to be done anyway. Some parts of this house are 120 years old. It consists of 5 builds, and the oldest three of them have 3 foot think stone walls.

  5. Roger Brown 5 years ago

    Well my 3 kw system in sunny Qld pumps out nearly double of what I use , so when Batteries get cheaper , bye bye $70+ a 1/4 service charge and the grid . If the LNP do sell it off, they will have benifets for the new buyer to get at least 10% return on their investment and charge what ever they like .

    • Tim 5 years ago

      It’s kind of exciting that 2015 will be the year storage hits mainstream, because so many Oz households are all ready to go. Councils will start bulk-buying batteries, and people will be able to get off the grid for $15K or so soon enough, including panels. Once people realise they simply don’t need the connection, the unravelling will be rapid. Huzzah.

  6. Les Johnston 5 years ago

    History also shows that Governments continually prop up failing industries. When the grid is sold and it goes broke, the taxpayers will end up bailing it out and paying for it again. Why should grids be sold now only to be bailed out in the future?

    • BarleySinger 5 years ago

      It isn’t that the grid will die, but it will change dramatically. It has to.

      New grids will need to be far more intelligent about how they move
      power around, from where the sun is shining (or the wind is blowing) to where they are major industries that require
      far more power than they could possibly generate. This is already under way in Germany and it took a major rethink (an new inventions) of some very basic low level grid technology.

      Large scale DC power grids (which are used in this sort of system) and require this newer tech from Germany to deal well with moving energy from where it is made easily, to where it is needed (long distance high voltage DC) and the tech had to be reinvented in order to cope with lightening strikes. (which newer tech now can do in DC, far better than the AC grid can).

      • Les Johnston 5 years ago

        And the need for new technology will provide the grid operators with the very opportunity they need to crank up prices again. Just as we have seen in the last 5 years with the private operators being granted considerable price increases justified by the need to improve reliability of supply. Breaking up monopoly supply is critical in the years ahead. Truly competitive innovative supply will only occur when there are multiple independent small suppliers in the market. Governments typically lack the vision and vested interests run the supply chain.

  7. Ronald Brakels 5 years ago

    I’m afraid that Mr Ciobo’s remarks are just another example of the “Anything and everything justifies privatisation,” disorder that has afficted Australian politics for some time now. Normally we are told that we need to privatise because private businesses can do things more efficiency. Which makes me think these people who claim private businesses are models of efficiency have never actually worked in a private business. But in this case we are being explicitly told that private business is stupid and will gladly buy up something that will soon be worthless. In other words the complete opposite of what they normally say. The fact is, there are people who don’t care what they say, as long as they or their mates get to do their deals and large sums of money change hands.

  8. oakleighpark 5 years ago

    With the Passive House standard you get up to a 90% savining in energy use for heating and cooling. This standard can be applied in new and retrofit buildings. What you are left with is energy for hot water and, these days, increasing energy use for plug loads (lighting, appliances, tv’s, smart phones etc, many of which run on direct current). PV and batteries also are in the DC space, DC is produced by the PV and used to charge the battery. So let’s be practical, run DC inside the building and have all DC appliances and get up to a 30% saving on plug load after PV and a storage device has been added.

    Next, connect a city block of similar buildings via an island able DC Microgrid. This has the potential, when scaled, to dramatically reduced grid load, at least in the residential space; shift the emphasis of the utilities’ generation load from the center to the edge; reduce water used for cooling; improve energy resiliency; reduce maintenance costs; mitigate grid vulnerability to attack and solar flares and create a participatory retail market where the here-to-fore comsumer can become a prosumer.

    • disqus_3PLIicDhUu 5 years ago

      This is the kind of thing that’s discussed in off grid solar courses and with the low cost of ac inverters with over 90% efficiency and energy efficiency standards, remembering with appliances, most often, they internally have some form of dc-dc conversion anyhow.
      The problem with dc house wiring system, is what standard to run at and high enough to keep volt drops low the voltage may need to be high, up to 110V max dc, then it’s the problem of having to source and voltage select a dc washing machine etc.

      In saying this a dc system for LED lighting might be good, as the lights most often, would be low load and the same and this could save the multiple conversion steps taking place, with an a.c. supply.

  9. disqus_3PLIicDhUu 5 years ago

    Flow batteries are coming and could kill reliance on the grid, for many. http://redflow.com/

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