6 February 2020

ACT's power bills set to fall as renewables make their mark

| Ian Bushnell
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The growth in renewable energy generation is bringing down electricity prices. Photo: Windlab.

Average Canberra households could soon be paying more then $100 less a year for their electricity thanks to the growth in renewable energy.

According to the ACT Independent Competition and Regulatory Commission’s draft decision on regulated retail electricity prices for the next four years from 1 July, a typical customer on ActewAGL’s standing offer contracts could expect to see a 6.75 per cent fall in average retail electricity prices in 2020-21.

This translates to a cut of $113 off their annual bill, while non-residential customers could see reductions from $697 per year for a large customer to $174 for a small customer.

It would mean that ACT consumers would continue to pay among the lowest standing offer electricity prices in Australia.

The ICRC says the decrease reflects falling prices in the wholesale electricity market, driven by the growth in renewable energy generation.

This has cut the cost of national green schemes, contributing 4.1 percentage points of the estimated price reduction, with cheaper wholesale energy costs contributing to the balance of the decrease.

The ICRC says network costs, which make up about 40 per cent of overall electricity prices, are not expected to change substantially when the Australian Energy Regulator releases them in May.

The ICRC also took up the vexed issue of electricity companies’ different deals, making two recommendations to the ACT Government to make them clearer and easier to compare.

It said that more than 1000 ACT electricity consumers responded to its survey about their experiences in comparing electricity offers, with only 18 per cent indicating they were “confident” their current electricity plan was best for their circumstances. Many (48 per cent) said they didn’t use comparison websites.

While the highest and lowest market offer is less in the ACT than in other jurisdictions, most consumers still find it hard to compare offers, mainly due to the large number of offers and tariff types, the discounting practices of retailers, and the complexity of terms and conditions in plans.

The ICRC has recommended that a reference bill for a typical consumer should be developed, based on regulated prices, to provide customers with a common point of comparison for assessing offers.

It also believes retailers should have to tell customers whether they are on the best offer and how much they would save by switching, depending on their circumstances.

It is also encouraging retailers to regularly tell their customers that they can visit the AER’s Energy Made Easy website to check whether there is a better offer available from another retailer.

The ICRC draft decision, which is based on information up to 29 January, 2020, will be updated in its final report using the most recent data available up to the end of May.

It is now open for public comment, and it can be found at https://www.icrc.act.gov.au/energy/electricity/retail-electricity-prices-2020-24.

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Capital Retro8:03 am 11 Feb 20

“We produce” means “the ACT produces” which it doesn’t. That is the point I was making.

Private energy prices have not dropped anywhere else in the world in the move to renewables, but I suppose Canberra might be different

Capital Retro9:01 am 09 Feb 20

“But we produce what we use (roughly) in renewables for the grid that is used elsewhere.”

I would like to see some figures to back that claim up. The only renewables produced in the ACT that I am aware of come from the solar farms at Majura, Mugga Lane and Royalla and the LFG generators at the MLRMC. The token hydro generator at the Burra is now switched off.

And don’t forget, the solar power generated is only part time, totally useless for cold winter nights.

I am by no means knowledgeable in this area but my understanding is that the ACT does not produce enough renewable energy to supply our needs but instead we buy renewable sourced power from interstate.

What I am curious about is if we checked every minute, what percentage of the day our requirements are being met by renewables and what percentage of the day at least some of our electricity is coming from coal or gas?

For example, at 3am on a calm winter night how is the electricity being generated?

Is our electricity really 100% renewable or is it some sort of trading scheme sleight of hand?

A Nonny Mouse11:35 am 09 Feb 20

This question has been analysed here – https://sites.google.com/view/100-renewable-act/home
“Using 12 months of data from Nov 2018 to October 2019 it is possible to assert the following:
Wind and solar generated 93% of the ACT’s net demand over the period.
75% of the ACT’s electricity could theoretically have been supplied directly from the wind and solar generation (ie. without the need of any storage)
the remaining 25% would need to have been sourced from other generators on the grid
18% of the wind and solar generation was, at the time it was generated, in excess of the ACT’s need, and instead was used by users in other states. It had the effect of greening their electricity supply.
94% of the time wind and solar generation exceeded 100 MW, which corresponds to the average demand requirements of about 125,000 ACT homes.
80% of the time wind and solar generation exceeded 50% of ACT Demand
44% of the time wind and solar generation exceeded 100% of ACT demand.”

“Is our electricity really 100% renewable”
No one in the ACT government said the ACT had 100% renewables. They actually said the ACT had net 100% renewables, a very different thing. Net 100% renewables means that over the course of a year the the contractual arrangements the ACT has with renewable energy providers across Australia produce a minimum of 100% of the total energy usage of the ACT. The energy those renewable energy providers produce is pushed out onto the grid and shared by all connected to the grid.

Capital Retro1:36 pm 09 Feb 20

It’s really virtue signalling on a grand scale. Hopefully it gives us all a “warm feeling”, especially on cold, winter nights.

What is so hard to understand about that quoted reference CR?

The Territory buys enough power from renewable sources to offset what it actually uses. It is used elsewhere (I.e. wherever the demand in the grid is at the time), but it offsets the amount used in the Territory. The Territory has purchase agreements in place with those renewable energy producers – i.e. they’ve been set up because of ACT Government support. You have just got your knickers in a knot because those facilities aren’t all actually in the ACT. But that quote doesn’t say that at all.

Capital Retro10:50 am 10 Feb 20

I just don’t believe it, so give me some figures to make it easier to understand.

So am I understanding this correctly: “44% telly of the time wind and solar generation exceeded 100% of ACT demand.”

Does that mean that approximately 56% of the time the wind and solar generation is not sufficient to meet the ACT’s demand?

So if we only used those sources and if other sources were turned off we wouldn’t have enough power more than half the time?

Capital Retro8:02 am 11 Feb 20

“We produce” means “the ACT produces” which it doesn’t. That is the point I was making.

Capital Retro11:37 am 11 Feb 20

The purpose of my comment was I wanted proof that the ACT produces almost the same amount of renewable energy that it consumes as was claimed by someone else. You have confirmed that it doesn’t and by the way, I don’t wear knickers, thank you.

But it appears to be true that the ACT could not make do with only Solar and Wind. More than half the time there is not enough power being generated by those sources to meet our needs.

People can play sleight of hand tricks all they want but that doesn’t change the fact (if I’m reading the figures correctly) that if we only relied on those sources we would not have enough electricity for the city more often than we would have sufficient.

Especially in winter the people would be in panic as our electrical system failed.

The claim that we do have enough is much like being pulled over for speeding and trying to get out by claiming that yes, while you were doing 200kph when you passed the cop, once they took into consideration all the times you were stopped at traffic lights and stuck behind slow vehicles, on average you were under the speed limit.
Anyone trying that argument in the courts would be laughed at, and the same reaction is suitable for people claiming our power is 100% renewable.

HiddenDragon7:59 pm 08 Feb 20

“The ICRC says network costs, which make up about 40 per cent of overall electricity prices, are not expected to change substantially when the Australian Energy Regulator releases them in May.”

So the daily supply charge could actually rise, which would offset any falls in electricity prices which are actually passed through to customers (“average” or otherwise).

This would hardly be surprising, given that the noise levels about the need to upgrade the grid have been rising – an interesting contrast to the claims, a few years back, about “gold-plating of the grid” (rather than renewables) being the real cause of rapidly rising power bills.

Anyway, bills which end up being roughly the same (rather than rising at a gallop) will be a relief for people whose incomes have been roughly the same for some time now.

Network charges will only go up by CPI or something in that region at most. They are partway through a regulatory period and the price path is already determined – its just the normal adjustments along the way. All the detail is available on the AER website.

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