In light of the proposed electricity tariffs by Australian utility networks, many people are aghast at the proposals. However, there may be a people’s champion, the Australian Photovoltaic Institute, otherwise called APVI. Recently, they had quite a lot to say about the proposals made by utilities. These centred on electricity tariff suggestions like time-of-use tariffs, where pricing would be higher during given times.
Another suggestion was that customers would pay a higher amount if they switched appliances on at the same time. It worried consumers, as the tariffs sound more like they were going to fatten the network pockets instead of improving the system.
The APVI issued a scathing critique about the proposed guidelines that networks have created for suggested electricity network pricing and tariffs. They argued that instead of working to reduce consumer bills, the new proposal aims to protect network revenues instead.
Are electricity tariffs effective?
APVI states that they believe that it is likely that the electricity tariffs were not effective at reducing peak demand. They also are concerned that the network is merely trying to recoup what they spent on infrastructure that the people did not ask for and don’t need, this includes the $50 billion spending binge that was termed “gold plating”.
The Australian Photovoltaic Institute notes, the utility networks must not be allowed to make the consumers shoulder the cost of their over-investment. They should not be permitted to use a high-risk borrowing cost, since the nature of their business is a considered low-risk borrowing environment.
The APVI has a lot to say, especially about the modelling the AMC used, which was prepared by NERA Consulting. They claim that it does not consider the ability of rooftop solar PV to benefit the grid, as it reduces peak demand.
According to the Australian Photovoltaic Institute, the AMC modelling misunderstands how battery storage may be used to maximize the household’s self-consumption and reducing peak load. The APVI even goes so far as to say that the modelling made by NERA Consulting overestimates the peak electricity demand required by some households.
NERA put the peak demand at 25 kilowatts, which the APVI claims is extraordinarily high. They also said that this was a “lazy calculation” and stated that it could lead to misleading results.
According to the Australian Photovoltaic Institute, this modelling underestimates the benefits that one could get from using rooftop solar PV. Aside from that, they believe the modelling underestimates the cost of air-conditioning, as they believe it is the primary cause of peak demand.
The Australian Energy Regulator was also quick to state that recently that the use of tariffs to create barriers to new technologies would not help the networks. It would make more people want to flee the grid, as there is technology that allows them to run self-sufficient households.
If people decide to flee the grid and settle in locations wherein they could use their own technology for free energy, most of these networks would be in trouble, as their business relies solely on public demand. If these tariff changes come to pass because they are allowed by the Australian Energy Regulator, we do not know what lengths people will go to, in an effort to avoid them.
