4 June 2022

Chief Minister expects Canberrans to be shielded from electricity price shocks

| James Coleman
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The Mt Majura Solar Farm is part of Canberra’s solar highway and creates enough renewable electricity each year to power around 3,000 Canberra homes. Photo: Supplied.

Canberrans can expect some “very good news” regarding electricity bills this year despite skyrocketing prices elsewhere.

Power bills in NSW are set to increase by an average of $119 to $227 from 1 July, but Chief Minister Andrew Barr has suggested the ACT will buck the trend.

“We have effectively locked in a fixed price supply, so it means ACT residents would be shielded from those increases, so watch this space – I think there’s some very good news coming,” he told ABC Radio on Friday (3 June).

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The ACT Government has signed contracts with 11 renewable energy generators here and in NSW, Victoria and South Australia, effectively paying them for the megawatts we use; hence the claim the ACT runs on 100 per cent renewable electricity.

Embedded in each of these 10 to 20-year contracts is a ‘strike price’. The ACT’s electricity distributor, Evoenergy, pays each generator for their energy based on the difference between the current wholesale price (which varies every five minutes) and the strike price.

When wholesale electricity prices are low, this requires Evoenergy to pay the generator, and when electricity prices are high, the generator pays Evoenergy.

This arrangement helps shield ACT consumers from high electricity prices.

When there are costs, Evoenergy passes them on to consumers in the form of ‘network costs’, which comprise about 43 per cent of the total residential retail bill. Network costs (or supply costs) are how much it costs to get electricity from the power station to your home or building and includes the cost of building, operating and maintaining electricity poles and wires.

The national energy watchdog, Australian Energy Regulator (AER), has approved Evoenergy’s pricing proposal for network costs from 1 July 2022 to 30 June 2023.

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The ACT electricity network charges are set to fall, on average, by 10 per cent from 1 July 2022.

This translates to a decrease in annual electricity network charges of about $90 for the average Canberra resident consuming 7,500 kWh.

“We estimate that, based on our decision, the network component of the typical bill for Evoenergy’s customers to be $81.20 lower for households and $444.46 lower for small businesses in 2022–23 compared to 2021–22,” an Evoenergy spokesperson said.

Last year, ActewAGL was permitted to increase retail electricity costs by an average of $3.76 per week for a typical Canberra household consuming 6,500 kWh per year. This was due to a 36.91 per cent increase in network costs.

The ACT Independent Competition and Regulatory Commission will hand down its 2022 to 2023 update to electricity prices on Monday, 6 June.

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Unless in an election year (and that does not even help this bureaucratic Canberran society so bent on a useless ALP), you won’t see a Govt reducing costs at their own demise (reduction in income). The rates will rise to cover as required – “The deck chairs, Sir, have been reshuffled on the Titanic”…..

HiddenDragon8:18 pm 05 Jun 22

In coming years, the 100% renewables claim will come under increasing pressure (in terms of price and reliability of supply) with the retirement of the coal-fired power stations which provide back-up for when the weather is not being co-operative.

When those stations are gone, affordable, reliable storage on a scale beyond anything yet seen will be the issue. There is some hope that affordable “green hydrogen” will be the answer, but this recent report indicates that option is some years off, and unlikely to arrive before several of the remaining coal-fired power stations close –

https://www.pbs.org/newshour/show/could-hydrogen-be-the-clean-fuel-of-the-future

Note particularly this comment from the head of the fuel cells and hydrogen technologies laboratory at the US National Renewable Energy Laboratory –

“…..the number one goal is to make hydrogen cost less to produce it. There’s an ambitious hydrogen shot goal to get down to $1 per kilogram in one decade. Solar and wind took 30, 40 years to get to where they are now. We need to do the same thing with hydrogen in just 10 years.”

Capital Retro1:37 pm 05 Jun 22

The image at the start of this article is captioned:

“The Mt Majura Solar Farm is part of Canberra’s solar highway and creates enough renewable electricity each year to power around 3,000 Canberra homes”

The bit at the end which has been edited out reads……”when the sun is shining”.

If only someone could invent technologies to store energy that could then be released back to the grid when the solar panels aren’t producing electricity at night.

Oh wait…..

Capital Retro6:12 pm 05 Jun 22

A battery is an option but then there wouldn’t be enough energy to fully power those mythical 3000 homes during the day, would there.

So what you’re saying is we need more renewable generation capacity as the existing fossil fuel capacity is phased out. I agree.

It’s already happening.

And you’ll note I said “technologies” for storage, batteries being just one.

Capital Retro8:52 am 07 Jun 22

You are really clutching at straws now.

CR,
Perhaps you’d like to give some reasons?

I think the person who doesn’t know our our national electricity grid works and is complaining about renewables reducing our electricity bills is not just clutching at straws, but has lost grasp of reality.

Capital Retro4:59 pm 07 Jun 22

Maybe I am losing my grasp of reality because I keep thinking the weather is getting colder when I’m constantly reminded that it is actually getting warmer due to lack of action against a climate change crisis..

By the way, what are the “other technologies” that will spin us out of the current energy crisis we are being swept up in?

“Maybe I am losing my grasp of reality because I keep thinking the weather is getting colder”

Well of course the weather is getting colder CR, we are going in to winter. The climate however is getting increasingly warmer as shown by almost all metrics.

And you must have forgotten the previous reports I’ve linked you on alternative renewable firming technologies. I mean that’s if you read them in the first place.

Just a start:
Batteries (various types)
Pumped hydro
Hydrogen
Other chemical storage
Mechanical storage
Etc.

Along with numerous other dispatcable generation types.

Capital Retro5:55 pm 08 Jun 22

Your fellow warmists claimed 10 years ago that there would be no more snow in the Australian Alps in the future because of climate change yet there has been consistently above average snow falls in that period. In case you need reminding, the air needs to be very cold to enable it to snow. So, where is all that cold air coming from? Not the “metrically warmer” regions, surely.

I note you have used the escape word “firming” for the “alternate renewable technologies” you have nominated.

Let’s analyze them:

Domestic batteries are an expensive folly. They need a dedicated circuit to power a fridge and a couple of lights only, for a few hours, not a 2400W radiant heater.

Pumped hydro is still being built and is incredibly expensive and unproven besides being environmentally destructive.

Hydrogen is still a highly subsidized dream and will cost trillions of dollars to establish.

Other chemical storage? The mind boggles. I read somewhere that a battery can be made from urine.

Mechanical storage must mean flywheels and while they are efficient they are very expensive and the regulators wouldn’t allow them to be installed domestically.

Makes you wonder why certain business-backed people want to get rid of coal power.

My 2020 electricity consumption: 10,157kWh. My 2020 electricity bill: $1,102
My 2021 electricity consumption: 8,928kWh. (12% fall). My 2021 electricity bill: $1,626. (47% rise)
Please explain.

Capital Retro2:16 pm 05 Jun 22

It means that the cheap cost of getting 100% renewables has just increase 47%.

Fuel-free energy is simply economically superior to supply shock prone gas, coal and foreign oil.

As renewables are all CAPEX and low OPEX the financial models can leverage low risk and lower financing costs, and fix forward costs essentially insulting against inflation.

I installed solar, replaced gas heating with high powered ducted RC, and EV with solar charger.

All fixed at low interest rates so our forward costs are largely fixed after the initial capital outlay.

In addition to reducing foreign oil dependence. I’m possibly keeping around $50 / month onshore saved on imported fuel.

This morning I’m driving to Yass to fill up the car for free, and will spend that money in an Australian rural community instead of sending it to OPEC and the Russian military via fuel imports.

The economic benefits of full electrification and fuel-free energy are so strong that emissions reduction is only a small but very beneficial part of this.

The benefits are mainly economic. Keeping more money onshore to support local jobs, reducing price shock and inflation risk, improving quality of life (cheap transport and home heating), the list goes on.

It’s now cheaper for me to drive from Canberra to Yass for a coffee than a few blocks down the road. This will also support rural economic recovery. Like I tour rural EV chargers and spend foreign oil cash there instead.

Electrification is a no brainer and our economy will be much stronger for it.

One little technical problem from the increasing penetration of electric vehicles is that they do not pay a road user charge as diesel and petrol powered cars have to pay an indirect user charge through fuel excises. A simple solution would be that every EV would pay a charge on how many kilometres they do every quarter and if that is administratively too difficult for the government then an annual charge on kilometres travelled at reregistration could be undertaken.

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