Solar breakthrough? Regulator says tariffs should recognise PV benefits | RenewEconomy

Solar breakthrough? Regulator says tariffs should recognise PV benefits

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Victoria regulator proposes changes to solar tariffs that would take into account peak demand, location and some environmental benefits. This could nearly double the amount households receive from exports, and more could be added when network benefits are factored in.

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It has taken nearly a decade and dozens of reviews, but finally an Australian regulator has recommended that rooftop solar installations – along with other distributed generation such as small wind turbines – be rewarded for the value they bring to the grid, and their environmental benefits.

The solar industry and renewable energy proponents have been scandalised by the assessments by most regulators in the past few years, which sought to place minimal payments for the export of excess solar generation back into the grid, because of their refusal by regulators to entertain any benefits from the technology.

That led to predictions that households and other consumers would grow increasingly frustrated with the their treatment by utilities, install battery storage and possibly be inspired to quit the grid. The utilities call this the death spiral and some argue that it a proposition that is largely self-inflicted.

Victoria’s Labor government last asked the Essential Services Commission to assess the value of distributed generation. After an allegedly faulty start, the ESC has produced a report that delivers a landmark shift in regulatory thinking, even if the solar industry no doubt thinks it could and should go further.

In its draft report, the ESC is recommending a change in the way that tariffs are structured, making the “energy” component of the tariff more reflective of demand and supply, and including three different time periods as well as a “critical peak”; including location benefits for avoided transmission losses, and adding in a credit for the reduction in emissions.

According to one proposed rate structure, this could result in a near doubling in the amount of money a household with 3kW of solar could receive from solar exports to around $150, from current levels of around $80.

But it should be noted that this change is notional only. The environmental component, for instance, assumes an avoided emissions credit of $20/tonne – it may be that governments deem an entirely different rate, and the ESC will not be drawn on what that should be. It could be more, or it could be less.

The ESC also suggests that the “flexible” component of the tariff – based on wholesale market prices – will vary year on year, but could present opportunities for households and businesses to change their consumption patterns to take advantage of price movements. Some software providers are proposing such programs.

esc disributed generation

The benefits to the households for their exports of solar PV could be further upgraded when the ESC adds in a network benefit component, which is likely to include benefits such as reduced and deferred spending on grid upgrades and extensions because of the presence of rooftop solar.

This component, to be looked at in a separate report, will include battery storage as well. That work will begin with the release of a new discussion paper in June, with a final report due early next year.

Looking into detail at this draft report

On the energy side, the ESC says that rather than the current flat structure of 5.2c/kWh, the new rate should include four different categories, ranging from off-peak, through shoulder, to peak and “critical” peaks, when the network is under stress of very high demand.

Tariffs will be further tweaked to add more to those households furthest away from the centralised generators, crediting them with avoided transmission losses. Again, these figures are nominal – the varying tariffs and prices will actually be set by actual wholesale energy price movements – but they give a rough indication.

esc solar generation

 

Interestingly, wind energy is provided with a higher emissions credit that solar. The ESC argues that this is because solar is only likely to cause a decline in gas generation during the day, while wind is likely to affect brown and black coal.

Overall, despite quibbles in some of the details, the broad conclusion will be considered a major step forward for an Australian regulator, even if for many solar advocates the pace of change has been slow.

The ESC, for instance, did not include benefits from the reduced health impact of respiratory problems of particulates, on water use and reduced pollution of waterways, because it says these were too hard to quantify for the purposes of regulation

That aspect has not been too hard for regulators in other countries. In the US, for instance, the Minnesota regulator suggested that tariffs for solar should be higher than the 1:1 tariff (or net metering) prevalent in the US because of the increased health and envrionment benefits.

The ESC paper released on Friday also suggests that governments and regulators will continue to struggle with the reality that software and smart new technology is evolving rapidly and changing the game in ways that the regulator is yet to understand.

It argues against a 1:1 tariff that is common in the US because individual homes cannot act as full-scale utilities, with all the trading and transmission issues. But this ignores the development of “virtual power plants” which links individual homes, often to the benefit of the utility as well as the consumers.

Still, the fact that one regulator has broken ranks could be significant, although it should be noted – it says it only did so because it was asked a different question.

Still, the Queensland Productivity Commission was asked a similar question by its government and replied that it could see no benefits at all from distributed solar, and the state-based regulators have hitherto used each other’s reports as justification to ratchet down solar feed-in tariffs – under pressure from the utilities.

But this strategy is starting to backfire on the networks and the retailers. The falling cost of solar, the arrival of battery storage, and in particular of smart software, is providing all sorts of options – such as micro-grids, virtual net metering, and stand alone systems – that allow individual users, or communities to cut the link to the grid, or vastly reduce it.

The four-part pricing is interesting, although it is strange that the regulator wants payments to solar households capped at $300/MWh (30c/kWh) even when wholesale prices soar above that (sometimes to $12,000/MWh).

The ESC justified that by saying that these intervals did not occur often enough. Yet it is these same intervals that have been used to justify massive increases in network fees and have underpinned the earnings of large-scale generators. And some retailers offer up to $1000/MWh in those critical peak times.

The ESC response to this observation is that most retailers are hedged at around $300/MWh, and it is only setting recommendations for minimum payments – so if a retailer wants to offer more and expose their customers to the full gamut of whole price fluctuations, then they would be welcome.

The next stage of the review – network benefits – could also be significant. It is likely to be based on avoided network investment on the old network model. But some argue that this model is dead already, buried by its own gold-plating and over capacity.

It is more sensible now to be looking at sections of network, micro-grids, etc., and seeing how they work best with distributed generation and demand management, but that might be a step too far for the regulator at this point in time.

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87 Comments
  1. MrMauricio 4 years ago

    Not just avoided transmission losses-avoided transmission altogether!!!..and lets start factoring in health costs avoided!

    • Alastair Leith 4 years ago

      I’m sure CAHA and Environment Victoria commissioned reports could help the ESC in pricing the population health effects of pollution! If they’re still none the wiser they could ask for a report to be commissioned by government on any outstanding questions. Nah, just ignore health impacts all together, that’s a rational, bureaucratic approach.

      • Diana 4 years ago

        Pricing health impacts is one thing, Alastair, but why should the ESC then turn around and pay households a portion of what will then be avoided costs in health impacts, thereby creating cost pressure on electricity pricing?

        • Alastair Leith 4 years ago

          do you know what has created pricing pressure on households in the last five to ten years, in particular in Victoria post-Kennett-privatisation, Dianne? not the RET, not solarPV. in fact distributed solarPV has done more to put downward pressure on the single biggest source of pricing increases than anything else I can think of.

          if you read this article again I think most of the reasons why solarPV should be rewarded with decent FiTs are listed and be protected from prohibitive fixed charge increased.

          • Diana 4 years ago

            Decent FiTs is one thing, Alastair, but I see no reason to “price in” avoided costs of network expansion, new generation, and health/environment impacts on top of the value of the electricity to the population on that day, at the TOU. Just another cost pressure that isn’t necessary – just how much more incentive do we need to just do the right thing, not have to endlessly subsidized or rewarded to do it. After all, only some will have solar, even if its a lot more, but millions still won’t. Why increase the pressure on them for their needs, by whacking a price component on for the all the “avoids”. Avoiding cost pressures was what we were supposed to be, in part, doing all this for.

          • Alastair Leith 4 years ago

            I’m not sure where you are coming from Diana, it’s a suspicious line you are running. You didn’t answer the question I asked of you so I guess you don’t know: Network costs followed by wholesale energy price are the two largest components of the household energy bill, and vastly so, the RET, FiTs and VEET are tiny components of the bill.

            If solarPV reduces the need for network fortifying (also known as gold plating because of unethical behaviour by the network operators who have only one means to deliver greater shareholder value, bill the customers for upgrades whether they’re needed or not) and has eliminated the midday peak where FF generators made their biggest profits, it’s fair enough that in a competitive energy market where corporations are allowed to price gauge, household installers are rewarded for reducing our energy bills. These things are about making coal and gas less profitable, and help get them out of the generation game ASAP. While households may be rewarded, it’s peanuts compared to increases the networks have take and if uninhibited by PV & EE would continue to be taking from us.

            You ask why are we supposed to be doing it? It’s called a Climate Emergency. We just had the first in a series of blows to the GBR that will ultimately destroy it by 2030. That’s a statistical likelihood even if we all stopped all GHG emissions tonight. The ocean will continue to get warmer by ~0.5º C due to climate lag and loss of the (short term) cooling particulates that coal burning produces. ROI certainly influence PV purchasing decisions, especially now that all the altruistic purchases have been made already, so we need to continue to make it attractive, and price environmental and climate pollution, which rewarding with FiTs is a way of doing.

            SolarPV install rates have declined in the last few years in all Australian states. There are less system designers and installers than last year. The only thing keeping moderate growth going (linear growth not exponential which is the global shape of growth) is the falling module price that has people installing larger capacity PV systems (on average). Read about it in my piece “100% Renewables is doable, but when will we see it done” if you want to know more about where we’re at with the goal of 100% RE.

          • Diana 4 years ago

            I’m not mixing climate change with basic electricity provision costs here, Alastair, my concerns are keeping the costs of electricity as low as possible as there will be many who will have no option but to pay for their supply to come from the grid. If we reduce network charges because we are no longer expanding it the way it has been done, and suffering less network losses costs, why take those savings and pay them to those with solar as a “reward”? I am and have been assuming all along that the goal is to negotiate or receive a competitive price for electricity supplied to the grid by mums’n’dads all along, as representative of what the energy would cost at any given time to supply. I am not aware generation companies receive payments for what they supply that reflect how far away they are from the site they do supply, so why should this factor in additionally with mums’n’dads. Why not just let those avoided costs in network expansion/losses be a saving in pricing of electricity that is passed on to all customers, not paid out as additional “reward” to mums’n’dads as well as an appropriately priced FiT for the time of day they are supplying to the grid, and therefore have to be included in the cost of electricity (still) for the future? Given that the solar produced for public consumption by the public is not going to be a consistent amount, solar homes seem to be expecting a lot for what it is they do supply. At least it appears that way, hence asking the questions why? When did solar and batteries on homes become about how much they should be paid, beyond ROI, instead of how much could be saved?

          • Alastair Leith 4 years ago

            well you are dead wrong, Diana. The Greens and socialists in Germany brought in the worlds first FiTs for wind and solar power for one reason only, the climate and environmental pollution associated with FFs and nuclear power. If you think this whole thing that many of us have given our lives over to fight for just outcomes was about network gold plating then you’ve not been paying attention,

            Climate change will deliver social injustices that make those that you are complain about seem like the most trivial first world dilemmas when climate catastrophe and mass refuge migration really kick in (Syria is but a precursor to the main event)

          • Diana 4 years ago

            My understanding is that as at 2014 only 8% of Germany’s huge population was able to access green power, Alastair.
            As for “giving your life over” I applaud your passion, but I just don’t see why savings in network costs should be paid to solar mums’n’dads on top of a reasonable price for what their energy is worth to the grid at the time it is pumped or released back in when so many other people will not have the direct and immediate bill alleviation of panels on their roofs – which apparently includes a heck of a lot of Germans.
            If you think that’s naïve, well, I question why people have to so often be subsidized and incentivized to do the right thing – because as solar goes, a truly massive no. of Aussies still aren’t any closer to getting those benefits now, when they need it.

          • Alastair Leith 4 years ago

            Repeat after me: because fossil fuel generators do not pay for the destruction they do to the climate, the environment, for the water and farmland they consume and for the health effects from them doing business the way they do it. They call it externalities and defer it to the future and generations to come. The result will be loss of civilisation and most ecosystems we have today. And all you care about is cheaper power. Just keep using coal-fired power then until a serious carbon price of $200/tonne is levied on fossil fuels if all you care about is cheaper power.

          • Alastair Leith 4 years ago

            That’s an odd claim, Germany has more community power stations that any country in the world, this is just a map of the small community scale wind farms, there’s also solar and bio-waste generators.

            http://www.thewindpower.net/country_maps_en_2_germany.php

          • Alastair Leith 4 years ago

            why should avoided grid costs be factored into the ROI of solarPV? because solarPV has provided a huge service in keeping those bills you keep compiling about down both the network costs and the peak-demand maximums that fossil derived much of their profits from. You need to see the bigger picture not just keep repeating your statement like some kind of mantra. It makes economic sense to reward that relative to fixed generation and distribution that requires a harder grid with larger peak-load capacities.

          • Alastair Leith 4 years ago

            ” I question why people have to so often be subsidized and incentivized to do the right thing – because as solar goes, a truly massive no. of Aussies still aren’t any closer to getting those benefits now, when they need it.”

            because there is a cabal in this country who control energy markets and resource exports. the Coalocracy have fought bitterly via their lobbyists (who are everywhere there is political power) to avoid having a level playing field in energy. Every tonne of CO2 and methane they emit without paying $200/tonne CO2-e is one more nail in the climate coffin and they don’t give a flying fig.

            Also with RE we pay up front and the benefits both economic, environmental and climate are delivered down the track. Whereas with coal in particular you have full amortised plants paid for by the taxpayer who have low marginal costs and zero cost of capital to pay off. It takes time and lots of money to transform an energy network. It’s cheaper over the medium and long run to do it, but initaly solarPV was super expensive, so we needed to prime the market with subsidies.

            PV has been a great success story in Australia, even 4-seasons-in-one-day Melbourne. But installs are slowing down, and to the extent that poorer people still need help and leasing schemes, the more incentives the quicker we get it done and cheaper power for all is side benefit. If the markets are left to themselves they syphon wealth up to the elite and screw the bottom of the stack. That’s evident anywhere in the world you look. Wealth equality stretches out and basic services are not available to the many the more neo-liberal policy is put in place. That’s why.

          • Alastair Leith 4 years ago

            well you are dead wrong, Diana. The Greens and socialist in Germany brought in the worlds first fits for one reason only, the climate and environmental pollution associated with FFs and nuclear power. If you think this whole thing that many of us have given our lives over to fight for just outcomes was about network gold plating then you’ve not been paying attention,

            Climate change will deliver social injustices that make those that you are complain about seem like the most trivial first world dilemmas when climate catastrophe and mass refuge migration really kick in (Syria is but a precursor to the main event)

          • Dispassionate 4 years ago

            Again the report hasn’t changed it’s thinking about network cost avoided in regard to the fit…the only real extra money is the DOT. You are arguing the wrong part guys and girls…there hasn’t been any change in thinking about how the fit is calculated.

          • Alastair Leith 4 years ago

            that is the point Dispassionate, and yet still @Diana is complaining about solarPV owners.

          • Diana 4 years ago

            Oh cut it out, Alastair. Its a legitimate argument to make that solar homes shouldn’t expect to be “rewarded” by being paid “avoided” costs, thus amping up electricity costs for everyone else, or keeping them higher when, God forbid, we might all get to enjoy a lower cost of electricity as a result. Solar homes don’t have to meet compliance costs, don’t have to have licences, aren’t subject to inspections, repair crews, etc and they have panels and inverters from all over the place. They will also be subject to decreasing output over time, may or may not be replaced at a high enough rate, and will generate to the grid intermittently – my point there not being about intermittency issues per se but that it will be an amount here, an amount there. In short, while it will contribute to reducing network and generation upgrade and need, solar homes are not at a commercial level of integrity, and presumably will not be forced to be, so avoided costs awarded is probably better spent on, if you want to keep it in the cut, upgrading the grid to make it highly responsive to despatchability, trading etc. Something that would benefit us all. Cheers.

          • Alastair Leith 4 years ago

            it might be “legitimate” to make your argument but you don’t seem to realise that capacity has to be paid for by someone.

            You also don’t seem to realise how much PV has already reduced power bills in the wholesale bidding market and in removal of the midday peak demand maximum which determines network capacity. You want the benefits but you want coal and gas to still get free kicks, that’s effectively what you are saying: pay pathetic FiTs that allow gentailers to mark up solar 400% when they sell it to your neighbour and ignore the benefits it brings. And yes, you are getting cheaper power, “god” didn’t forbid it and PV gets 20% cheaper every two years.

            If you accept the market driven system we have (i think it has many failings), then benefits need to be rewarded (deferred costs, environmental, health, climate) and impediments to the goal of 100% RE need to be removed and carry cost penalties. Either you price pollution at the demand side (reward rooftop solar) or you price it at the supply side (carbon pricing, emissions controls etc). I’m saying in the absence of carbon pricing of $200/tonne then reward solar for kicking more fossil power off the grid and keeping grid fortification costs down. You seem to not care about climate and want to take all the benefits with none of the costs. A self-absorbed attitude I would say.

            here’s something for you to ponder:
            https://video.fper1-1.fna.fbcdn.net/v/t42.4659-2/13219435_1019094421509771_801287353_n.mp4?oh=242df8166ac85d7f75b85c3f053fe005&oe=5731AAFE

        • solarguy 4 years ago

          EXCACTLY, Dianna, before we reach 100% the less relevant that becomes.

    • Dispassionate 4 years ago

      the above comment also applies here….Health benefits are always considered, but they are very hard to quantify. Also it would be difficult to then deny payments to all the other industries that provide health benefits that save the community money but are not included in the cost of the product. eg gyms

      • Alastair Leith 4 years ago

        actually the ESC explicitly says in there report its not for them to price externalities be they health, climate, or pollution, it’s for government. so no they aren’t “always considered”. in fact we’re in a dire climate emergency because captured governments the world over refused to consider these things seriously for decades. we need all governments to declare the climate emergency and get us out of fossil fuels right away. even climate scientist are shocked by the accelerated warming of the last few years.

        • Dispassionate 4 years ago

          Health benefits and costs are always considered! But as I said they are hard to quantify, how much do you attribute to each etc is not something that can be done easily if at all.

  2. Chris Fraser 4 years ago

    Since the NEM’s brief includes efficient operation, it should provide that electrons generated near the point of consumption are used before centralised-generated electrons from further away. And in urban areas, that means PV should be consumed before letting in anything else. There, a reasonable market price for PV …

  3. MaxG 4 years ago

    The neoliberals never considered health benefits and never will. In their language it is called externalised cost… which is carried by the public.

    • Dispassionate 4 years ago

      Health benefits are always considered, but they are very hard to quantify. Also it would be difficult to then deny payments to all the other industries that provide health benefits that save the community money but are not included in the cost of the product. eg gyms

      • Alastair Leith 4 years ago

        quantifying the population health effects of a coal mine and power station, or many of them, is mathematically possible and it’s been done in the USA and the work has been adapted (loosely applied without repeating the core statistical measurements) by Harvard School of Health to give us answers on the La Trobe valley effects. Environment Vicotria commissioned and published the results (DL from the link on this page). But coal plants tend to have predictable emissions, i.e. measure once for a period each power plant and you get the picture unless they change coal supply source. Gyms on the other hand would be extremely difficult to calculate benefits from as all manner of variables (staff, incentives, equipment, capacity, patrons type and patron numbers) are constantly in flux.

        So gyms are a pretty extreme and silly metaphor for power stations in my view in terms of epidemiological data. You are right some things are hard to measure and apportion taxpayer dollars to (I pay with my own money for chiropractic care but never see GPs on Medicare yet how could I be compensated for a preventative health measure other than a blanket policy decision to include chiropractic care using the evidence that it’s the most cost effect treatment ever studied in Australia for back pain?). So some things like gyms and walking once a day get left out because the effects are too difficult to apply or administer without broad scale rorting (who checks we all did one hour walking today?) — but environmental pollution from coal and gas infrastructure happens to not be one of these things, it’s very clear and the data is very strong.

  4. Ian 4 years ago

    Have the fossil fuel incumbants entered the bargaining stage of grief? Two more stages to go, depression and acceptance.

    • solarguy 4 years ago

      Lets hope they get to the acceptance stage quickly!

  5. solarguy 4 years ago

    In an 100% RE grid big solar and wind will be needed as well as considerable storage to power cities, transport and industry and to a lesser extent suburbia. We will need to keep the poles and wires infrastructure to make the most of roof top solar and storage as well.

    Therefore the logical conclusion is that the future grid will be a mix of centralised and decentralised generation. For any individual home that is connected to the grid now, would currently and in the future be better off, even with plenty of PV and storage, to stay on grid, so they can be paid for excess energy, so as to get a quicker ROI. That can’t be done in the off grid scenario and it is of much higher capital cost in any case.

    As far as fair feed in tariffs, mentioned in this article, Critical Peak of 31.6c/kwh sounds reasonable, however, peak is definitely too cheap and should be, circa, 20c/kwh. Peak time is when a household needs it’s stored or generated power most, to offset expensive grid power and therefore needs a reasonable incentive to sell valuable stored energy.

    • Guest 4 years ago

      Why just 100% RE grid if renewable resources readily available to be plucked are insanely abundant, the prices of harnessing them are coming down dramatically and, yes, if smartly managed, they can be at least just as reliable as whatever the grid incumbents have in store to offer us? We should already be thinking about about overbuilding renewable energy capacities to tackle not just power generation emissions, but those off transportation and heating as well with what would be spilled anyway. After all, electricity is a versatile source of energy. https://www.youtube.com/watch?v=skSN7v3ZfQ4 ( 2013 Willet Kempton’s “running society on renewables”, if the link isn’t working).

  6. 807gt 4 years ago

    Why must we always have such a complicated system ? Very involved , difficult to program .How about 1:1 24/7 ?

    • solarguy 4 years ago

      Understand we need the grid to make this work for all concerned, by insisting the utilities pay 1:1 24/7, there is no financial incentive, hence no business case.
      No one will invest in such a market, we will need big solar and wind as back up for our home PV/storage, for days of bad weather and we won’t be able to sell excess generation.
      See my previous post above.

  7. Diana 4 years ago

    Isn’t it just going to add to the costs of electricity to pay mum’n’dads/businesses, if I understand this correctly, if “…benefits to the households for their exports of solar PV could be further upgraded when the ESC adds in a network benefit component, which is likely to include benefits such as reduced and deferred spending on grid upgrades and extensions because of the presence of rooftop solar.”… and… “The ESC, for instance, did not include benefits from the reduced health impact of respiratory problems of particulates, on water use and reduced pollution of waterways, because it says these were too hard to quantify for the purposes of regulation” now have to be made?
    Surely a good outcome such as avoidance of further costs and problems is benefit enough, added to a more competitive rate of feed benefit? Mums’n’dads will still have heavily reduced bills, especially with batteries, but do we now have to pay them as though they were generation businesses with incremental demands , and regular reviewing of that price component as well?
    We surely can’t remove ourselves from the claims of gold plating, profit motivation, if the demand for what we should expect to receive if we feed back energy to the grid is just going to keep increasing?

    • solarguy 4 years ago

      Look, if prices of grid power goes up, then FIT should also go up. There has to be a balance or were back to square one. After all the utilities, the networks and generating households/ businesses will need each other.

      • Diana 4 years ago

        Well obviously, solarguy, but all I’m saying is why price in to FiTs “avoided costs” in network expansion, new gen, and heath/environment.

        • solarguy 4 years ago

          In my previous post, I meant the health and environment avoided costs, should not be included in an FIT!
          However, when a electricity retailer has a reduced cost from network transmission losses, because of roof top solar being closer to the source of consumption.
          That being the case, we should factor in that value, as the utility isn’t paying the network as much and we are, as solar generators, saving them money. The small added value is compensation for what their charging every user of the grid.
          Added to that in a critical peak scenario, generation price can be in excess of a $1/kwh from peaker plants, so 31.6c FIT is a bargin coming from roof top solar, which is then on sold by the utility to all users.

          • Diana 4 years ago

            Well, its not compensation for “every user of the grid” solarguy, clearly passing on savings made in reduced cost of network transmission losses, to mum’n’dad solar generators as a “small added value” just increases the cost of electricity to those who don’t have solar and have no choice but to pay for grid electricity, regardless of where that electricity came from. I mean, let’s face it, once the initial purchase of energy system for mums’n’dads is paid off, everything else after that becomes pure profit to them, and as I understand it they will be paying less for grid maintenance as it is, as they will be sourcing less electricity from the grid, and therefore the component cost factored in to that source for that grid’s maintenance.

          • solarguy 4 years ago

            You just don’t get it do you!
            Those savings will be applicable to everyone who uses the grid. with a high penetration of roof top solar, those who don’t have solar will benefit from nearby power generation, because it will be cheaper!

            Anyone who builds power generation, no matter what size, has to pay for that infrastructure. Once ROI is realized, your saying the product should be free. What a load of cock custard Dianna, the world economy doesn’t work that way.

            Your also indicating the utilities should be gifted cheaper or free energy, so the retailers can make more profit for no outlay or risk. By selling roof top solar at the prices I have mentioned is taking cost of maintenance into account.

            Clearly you know nothing about how energy is costed from generation, network costs and m/up, then retail margin and then through to the end user. And that’s not to mention the cost of transmission from central generation losses, that could be 200km away.

          • Alastair Leith 4 years ago

            I suspect “Diana” could be a troll account.

          • Diana 4 years ago

            No, just don’t agree with you. You don’t have to be offensive.

          • Alastair Leith 4 years ago

            When you keep saying same thing in spite of people pointing out the holes in your assumptions, it sure comes across as ‘troll’. not unheard of on reneweconomy.com I’m sorry to say. I accept that you aren’t a troll, just not really listening to the answers we are giving you. As for offensive: this

          • solarguy 4 years ago

            Yes Alastair, it’s confirmed, we have another brainless nitwit amongst us.

          • Alastair Leith 4 years ago

            that’s not very nice. but yes very frustrating individual, almost wilfully ignorant.

          • Diana 4 years ago

            Can’t have what you want, everyone else wrong. World feels saved already.

          • Dispassionate 4 years ago

            I haven’t seen too many holes being pointed out Alastair.

            From what I can see solarguy is going on about stuff that hasn’t been changed at all. The line losses are already factored into the current FiT. The time varing feed-in tariffs will have some effect but if useage behaviour doesn’t change then more than likely the FiT benefit will remain very similar to now. These are simply providing a more cost reflective series of tariffs that should see (hopefully) solar PV owners actually try and improve the grid utilisation a bit (only achievable through hip pocket encouragement by the way) by using west facing panels, better load management etc.
            The stuff Diana is pointing out, if I follow correctly, is the extra cost that WILL be imposed on all electricity users by the DOT. Hard to dispute this…solar owners get more money it has to come from somewhere and that will be other electricity users.

          • Alastair Leith 4 years ago

            Solar owners get more money, and that means more solar deployed instead of less solar which is actually the current trend. For the last few years PV install growth numbers are trend down.

            More PV means lower wholesale prices for electricity (until coal is retired by some means) and means less justification for network fortification (‘gold plating’). You have to pay for capacity and you have to pay for features you want in a national energy market arrangement of costs and benefits. If we aren’t going to pay for climate and environmental pollution on the supply side, that leaves the demand side. If we aren’t going to pay for network benefits of solar at the point of installation, then we need to pay for them in the bills.

            I don’t see you guys complaining about the reduced wholesale energy price or the downward pressure on network costs PV brings, you want to claim that as a free benefit while paying a FiT that doesn’t reflect the value of the service solarPV is providing. More to the point, we need to continue to see PV growing at an exponential rate until we have a high penetration of rooftops with PV. Globally PV is growing at a two year doubling, domestically it’s become linear growth for the last four years on the national average and off a base of a few percent linear growth won’t do it in time.

            Furthermore you need to get your heads around what the costs that make up household bills are, and where all the rise in electricity bills has come from… surely it’s the rise that has people talking, nobody is complaining about the cost of mobile services because the costs have been failing relative to data consumption.

            Here’s a couple of images showing you the breakdown of a Victorian energy bill that Dylan McConnell at Melbourne Energy Institute provided me with. The red arrow represents the reduced wholesale costs of energy thanks to solar ducking the previous midday peak. You could make a guess as to the distribution costs saved and potentially saveable too. Note that distribution costs is responsible for the largest single rise electricity bills since the Kennett era privatisation of the system.

          • Dispassionate 4 years ago

            Wasn’t complaining, was pointing out that the extra money paid to solar owners WILL increase the electricity bill for all other consumers. As far as network benefits go it is very much locational and that being the case then only those areas where they actually get network benefits should receive the benefit. Focus payments where they are beneficial so you get the correct amount of solar in the correct areas and we aren’t wasting resources or money!

          • Alastair Leith 4 years ago

            that’s very difficult. and it would be like saying only encourage water savings at the far end of the water distribution network. none of these systems are truely user pays to the nth degree. I pay the same (unfair in some cases) rates for water and waste treatment to someone who lives next door to the reservoir. even if I use the toilet only once a money at my weekender I still pay $50’a flush thanks to very high “waste treatment facility” fixed charges so the water bills for high consumers of water are proportionally less than they would otherwise be. but geographic location is not a part of the equations and would be a nightmare to institute for network costs I imagine. more likely is microgrids having a single connection point and reducing their collective network costs that way. or a capacity tarif (the thin pipe/thick pipe model limiting the household connection capacity at peak load times)

            removing the midday peak meant network savings across the board. including HVAC transmission upgrades that were precluded. nobody gets charged the $5000 each AC a Queensland network operator says it cost them to fortify the grid, but that’s increasing use not reducing so the networks don’t complain about bat they just bill everybody else.

          • Dispassionate 4 years ago

            No one is producing water and feeding it back into the grid…so not really a good example…but yes there are definite cross subsidies going on there. This however is hardly a good argument for solar owners to get more, “they aren’t fixing the ac thing so why shouldn’t we get more” as it is only costing fellow members of the community and creating another problem rather than fixing a problem.
            By covering the network costs with a fixed charge would go a long way to fixing the AC problem, and paying the same amount for everyone in the state to receive a connection, while not cost reflective, is probably fair. You can’t really use the AC owners excuse for the grid upgrades as you have already claimed earlier that the grid has been gold plated….I don’t really agree, over spent maybe but I think a lot of the blame can come back to us the public for that as well, we want electricity 24/7 365, any outages we jump up and down like we have lost a limb, so reliability was pumped up, projections are always on the high side because while over spending is bad, underspending is worse!
            The other thing I wonder about is if you want to be rewarded for removing the midday peak etc etc, then all the money everyone else were paying they get to continue to pay, no savings just transfer from one rent seeking group to another.

          • Alastair Leith 4 years ago

            never said or assumed anybody is producing water for the water distribution network nor did i say I was using water rates as metaphor. I was pointing out that the concept of granular user-pays pricing is a) usually mythical (the pipes to my home cost millions of dollars more than the pipes 100m from the reservoir) and b) would be very hard to quantify fairly even with discreet computation of every location.

          • Alastair Leith 4 years ago

            “You can’t really use the AC owners excuse for the grid upgrades” I didn’t. One of the Queensland network operators put that price on it to the regulators, to justify upgrade costs and higher bill network tariffs.

          • Alastair Leith 4 years ago

            “This however is hardly a good argument for solar owners to get more”
            Sorry, getting what’s fair and what encourages more PV deployment or getting more? How is a 4c or 5c FiT “getting more” when it’s sold at 20c – 38c to your neighbour which avoids additional network costs (it actually reduces peak demand maximums which is a benefit not a cost to the network)? It also defers the capital cost of utility scale generation expansion, another society wide benefit to the grid.

          • Dispassionate 4 years ago

            they don’t avoid those costs, the grid has already been built

          • Alastair Leith 4 years ago

            hence the fact that it costs the retailer NOTHING in network costs. Paying nothing == avoiding. In fact it saves the network from peak demand maximum increases that would otherwise result in more fortification/gold-plating of transmission and network infrastructure. Geez, when will this interminable attempt at nit picking end? If you’re going to troll at least get an education in energy basics first.

          • Dispassionate 4 years ago

            The network is already built, it isn’t paid for so of course it costs the retailer. I can see you are starting to struggle with the concepts and realities of all this and you are reverting to name calling and personal attacks. So I’ll leave you with this one last thought…solar PV has done bugger all in regard to the peak and reducing the need for network augmentation. Again, as I have found over and over here, instead of people wanting to actually look at both sides of the equation and come up with a viable workable solution you just want to rent-seek and your back pocket is the focus of all your motivation.

          • Alastair Leith 4 years ago

            At least two AEMO presentations on the matter I’ve attended have said the opposite. They say solarPV output along with wind have done a lot to eat out the midday peaks where fossil fuel generators made substantial parts of their profits due to the very high bidding of OCGT generators which of course gets paid to all successful bidders for that bid period.

            Apart from the ad homonym attack being a logical fallacy towards your argument, “dispassionate”, it is completely false. Rent seek? As a renter, I don’t own a PV system. I’m interested in the continued expansion of RE deployment. If you’d like to read more about what I have to say on the issue read my blog piece on it: 100% Renewables is doable, but when will we see it done.

            You’re running commentary is anything but “dispassionate” and if you want to make personal attacks how about having the courage to put your name to them?

            I’ll leave you with this graph of the growth in solarPV: https://uploads.disquscdn.com/images/0d3811870770518f2c3682efa464362547467f99bb1c333a21716f4399bc4f72.png

          • Dispassionate 4 years ago

            Hmmm, ok Al, as you aren’t able to separate network and generators it is a bit pointless. The major problem and why getting a good rational result from all this is because a majority of people out there have no idea what they are talking about and will under no circumstance even contemplate that they are out of their depth. I am happy to contemplate…Alastair, you really need to!

          • Alastair Leith 4 years ago

            if you say so, “dispassionate”. more PV distributed generation reduces peak demand maximum which translates to deferred network buildout/fortification/justification-of-projected-demand-gold-plating and dispatch generation both, and yes I know the difference. the energy minister in WA has said exactly that, and commissioned a report that suggested privately owned PV and local storage would be meeting daytime peak demand maximum on the SWIS grid within ten years. I’d contest that the market will just do that without incentives, and the market has been slowing as I explained in my blog pice previously linked to.

            in what context are you saying I didn’t distinguish between networks and generation? Weird thing to say given how many times I’ve explained deferred costs on networks and the reduction in wholesale market bidding via its direct exports to the network as two discrete effects of distributed PV (you can consider them seperately or together as you wish but they occur simultaneously and are proportional to distributed PV generation). this is hardly a contentious thing to be saying but perhaps you’ve never been told or realised that’s what’s happening with increasing PV in the grid (and why the gentailers hate it)

          • Alastair Leith 4 years ago

            also thx for the apology for the baseless ad hominem attack. you’re all class. I guess that’s why you use a pseudonym.

          • Dispassionate 4 years ago

            You want to describe my discussion as nit-picking and trolling, and I should at least get an education in energy basics first, then you get upset because I lumped you in with rent seekers and I am suppose to apologise, don’t think so Alastair.

            So returning to the original what solar PV owners should be compensated for, I think you will find there has been very little benefit at all (very localised areas to which I have already said PV owners in these areas probably could receive compensation) in regard to the network peak, batteries may change this but just solar PV on it’s own, nope. As far as the wholesale price they shouldn’t receive any compensation there either. If the ESC recommends that their DOT is taken up and the Vic govt does that then the electricity bill WILL rise and the Vic consumer will be paying a very high cost for a very small benefit that the entire globe will receive. Thanks for playing Al.

          • Alastair Leith 4 years ago

            ok just admit you were wrong about your false accusation then, nah to much hubris.

          • Dispassionate 4 years ago

            lol

          • Alastair Leith 4 years ago

            ah so your climate change denier colours finally beginning to emerge. I don’t waste time on deniers.

          • Jon 4 years ago

            It will probably end when people who actually understand how the energy market works start joining the debate

          • Alastair Leith 4 years ago

            hey you go, your coal-industry-propaganda-informed opinions seems to have a tin ear when it comes to deferred generation and network costs, but the fact is they exists and several studies in USA have concluded that solarPV is a net benefit even with net-metering (same tariff paid for export as purchase tariff). We of course have nothing like net-metering in Australia except for those who nabbed the very earliest FiTs.

            https://reneweconomy.com.au/2016/rooftop-solar-net-metering-is-a-net-benefit-28170

          • Dispassionate 4 years ago

            And thankfully too! FiTs have been expensive enough without net-metering! Have a look at the QPC solar fair price draft report and you will see all countries have reduced Fits because they are all too expensive. I believe the fits are fair as they are.
            And of course all the studies that disagree with you are propaganda and those that agree with your pov are all legit hey, not a bias view among them!?

          • Alastair Leith 4 years ago

            “WILL increase the electricity bill for all other consumers” how much? I just showed you a pricing breakdown of a victorian electricity bill. And how much will the added solarPV system reduce prices by comparison, that’s what you need to be considering. Energy doesn’t come for free except from the sun (they aren’t taxing that yet). If major corporations can be paid for demand side management why should PV (which achieves the same end on a daily basis) miss out on that just because it doesn’t have mates inside Parliament house?

          • Jon 4 years ago

            In your example you show a decrease in wholesale cost as result of increasing penetration of solar which of course is true. In SA there has been a huge impact on the spot price from the high penetration of wind, so much so that prices are often negative, which has forced the recent closure of the last brown coal powerstation there. But it also means that last year the avg price received by the wind farms was 24% below the avg spot price, ie wind energy is less valuable than energy from the broader market! The same will be true for solar as the penetration increases, only the impact will be more pronounced as the sun shines at the same time every day. If small scale solar generators want to paid what their energy is “worth” then there is the very real possibility that at some point in the future it won’t be “worth” anything from a wholesale market sense. Small scale solar owners should focus on self consumption to achieve the best value for their investment! Trying to attribute some esoteric value to market participants (retailers, networks, generators) is always going to be difficult as these participants don’t see any of this value. So the cost will always be socialised across all customers.

          • Alastair Leith 4 years ago

            network costs are hardly esoteric when they are responsible for the lion’s share of bill increases in the NEM over the last five years. Of course as generation becomes ubiquitous and cheap to deploy the value of generation outside peaks will become lower to the point of negative, as you say we already see that in many markets where wind has a high penetration, like those two states in Germany which are >100% RE (net). How does that undermine the true value of solar today? How will we get to that point if solar continues to flatten out to linear growth instead of the strong exponential growth we haven’t seen now for three or more years?

          • Alastair Leith 4 years ago

            “The line losses are already factored into the current FiT.” is that why they buy your PV power for around 4 cents and sell it to your next door neighbour for 28-35 cents? That’s all factored in is it?

          • Dispassionate 4 years ago

            yes it is!

          • Jon 4 years ago

            So are you suggesting that someone is making huge profits by buying energy from one house and selling it next door? The network cost to a retailer doesn’t change based on where they buy their energy. Its calculated at the RRN, a single point in each region which takes account of loss factors.

          • Alastair Leith 4 years ago

            I’m saying the gentailers are selling it for up to nine times the price they pay for it (at the new proposed critical peak tariff), the householder pays the network costs in her bill, and any invited network cost to the retailer is easily covered anyhow.

          • solarguy 4 years ago

            Her next reply could confirm that.

          • Diana 4 years ago

            Funny.

            Just re-reading the Queensland Productivity Commission’s March draft report in to solar feed-in pricing (important proviso that it not increase network costs for non-solar customers) to find its draft conclusion is that the current FiT is fair.

            It might be more worthwhile to look at the report now and comment on why you disagree with that. Apart from the cock cream and troll comments, which might be a factor in why there’s mostly only an own-goal audience, and very few women besides, responding to Renew’s articles, this isn’t a mindless conversation. I can see both solarguy’s and Alastair’s passion for their beliefs and I really would be interested in how you feel about why Qld’s PC has chosen this view. (For some reason link not coming up when I post it).

          • solarguy 4 years ago

            Time to say bye Dianna, We don’t suffer fools easily here.

          • Diana 4 years ago

            My name is Diana – one “n”. Do consider reading the draft report. Be interesting to see what the Qld govt will do and how Victoria’s Labor govt will proceed, if at all, with the implications of this article, given it is a Labor govt and fairness must be a consideration. Have the last word if you wish.

          • Alastair Leith 4 years ago

            finally i concur

          • Diana 4 years ago

            Nope, never mentioned anything being free – you can keep your “cock cream”. Gross.

          • Alastair Leith 4 years ago

            The alternative is masses of grid defections using very expensive battery storage and diesel genset backup by those who can afford it. Now that will drive up prices for those with no choice but to get all or some of their energy from from the grid. Rewarding social and climate goods and penalising social and climate wrongs is what this is all about. Nobody except maybe some Tesla fan-boys want to see the grid collapse, it would have a lot of negative economic and social consequences. Not pricing in pollution, grid benefits and positive health effects for solar is just economic bias towards the 1% who own and run corporations.

          • Diana 4 years ago

            Well, if the Greens’ tax credit idea for batteries does get through its not as though the 1.2 million its aimed at will have paid their own way in the first place, Alastair, but there will still be millions who couldn’t afford a mortgage in the first place, or didn’t have a suitable roof in the first place, who didn’t get a discount mechanism for panels, didn’t get overpriced FiTs for 10 years and won’t be provided a huge cost alleviation in getting a battery they’ll never have anyway. When is it ever going to be enough? What about everyone else? (and I’m still chuckling about the [me thinks she must be a troll] remark). I never really notice anyone rushing to roll that one out except on clean energy issues. Diana : Corporation? I wish I had that influence!

          • solarguy 4 years ago

            Dianna, you don’t obviously know that solar and wind has put down prices on power as things currently stand and has been responsible for coal fired plant shutting down. That’s a good thing right.
            In order to get the magnitude of PV cost reductions we have seen over the last 8 yrs, we needed FIT’s, STC and other rebates.
            Let’s hear what you think the FIT price should be? Also do you feel spurned because you can’t have solar?

          • Alastair Leith 4 years ago

            those who got the ‘overpriced FiTs’ I hail as heroes, they brought the price of solar systems down 80% in the last ten years. Australia has some of the lowest soft costs for residential PV systems in the world, thanks to the strong uptake by early adopters,

            There’s social inequality right through most every aspect of Australian society. I’ve not known a political party with strong representation in Australia Parliaments that is more committed to righting social injustice than the Greens.

            the reason you came across as a troll is because you kept saying the same things even when more than one person here pointed out your logical fallacies.

          • Alastair Leith 4 years ago

            the notion of anyone paying their own way is a conceit at the heart of all neoliberal propaganda.

  8. Alastair Leith 4 years ago

    “The ESC argues that this is because solar is only likely to cause a decline in gas generation during the day, while wind is likely to affect brown and black coal.”

    Burning gas can be as strong as a greenhouse forcing as burning coal if the fugitive emissions are >3%. And some LNG fields emit as much CO2 that’s vented straight into the atmosphere that when added to the combustion emissions from fossil gas mean it’s as climate forcing as a supercritical-coal fired power plant.

    The “cleaner fuel” myth about fossil gas wins out (again) this time for a conservative public commission that is too scared to price population health impacts of coal burning.

  9. stellar_gr 4 years ago

    With batteries comming the utilities can only delay the inevitable to try to find a bagholder to dump their worthless stocks and they know it.It is game over ,checkmate ,astalavista baby for the current model of business.
    A for profit virtual utility for the solar households if it was created end everyone having 5c tariffs signed in with it for it to trade their solar output for them could essentialy blackmail the utilities right now for much higher prices.And let the markets sort it out.

  10. Jon 4 years ago

    Let’s remember that the environmental benefit of these small solar installations has been recognised up front in the value of the STCs – 15 years worth in fact. Surely it is double dipping to then try to extract additional value as the energy from these systems is effectively “black” once the STC benefit is realised.

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