Why conservative governments, media moguls should love “Negawatts”

Conservative politicians traditionally love both “small government” and small businesses, with the latter quite rightly described, by both sides of politics, as the engine room of the economy. Furthermore, small businesses in regional areas are often the lifeblood of the local community – they are an early indicator for the impact of increasing costs of living on a region’s social fabric. In order to thrive, country towns need thriving small businesses.

As reported last week in RenewEconomy, “Negawatts” – electricity not consumed – are almost entirely untapped in Australia. All sides of politics are missing a massive opportunity to create a loyal following in regional communities – because a viable alternative to the full privatisation of state-owned energy grids is the sale of those network assets to the communities that rely on them.

As we noted in our recent report What Happens When We Unplug?, in some scenarios it is already cost-effective for regional communities to collectively go off-grid – assuming you off-set the cost of upgrading the network. By 2020, our report finds that going off-grid will be economically viable in a wide range of scenarios, including greenfield housing developments and even single-homes without making behavioural compromises.

When switching to stand-alone power, there is a natural incentive to proactively implement energy efficiency and demand management initiatives, independently of policies and regulations. The icing on the cake is that transitioning regional communities to stand-alone power in clusters, saves money for metropolitan customers, who no longer need to cross-subsidise those long skinny lines to regional areas.

Why would all of this be good for local economies, and the engine room of our economy?

Because, rather than large companies sending their profits to head office, local communities would be able to retain and reinvest that profit back into their local areas. It is well known by socio-economic researchers that big box retailing kills small businesses and isolates small towns. The same goes for big box energy.

The rising cost of living and escalating energy prices, have proved political dynamite. Conservative governments blame ‘green initiatives’, but you only need to look at an unbundled electricity bill to know that network charges are the real villain. Providing reliable power to regional towns are part of that problem. Australia is a big country, and somebody has to pay for the long lines. Cross-subsidy from capital city customers to regional customers are a natural, and understandable part of the system, when viewed in a historical context.

However, new technologies – solar power, smart energy management and energy storage – are recreating the energy narrative and shaping new political opportunities.

Enabling regional communities to go off-grid would create regional jobs, stronger regional economies, and lower prices for everyone (cities and regions). Local ownership of energy assets would unleash the economic power of negawatts for small-scale consumers of energy – much like the Australian Energy Market Commission’s (AEMC) Power of Choice report recommends. Anybody doubting the possibilities should look to the German examples in the village of Schönau, and Feldheim, or the recent vote to municipalise the grid by the people of Boulder, Colorado.

We believe the people who form the engine of our economy are more than capable of owning and managing local energy companies, and they can also ensure that energy infrastructure is run democratically – by the people, for the people.

Alex Houlston is Co-Founder and Director at Energy for the People.