Thank Solar Owners for Power Reductions

Non-solar customers in Tassie can thank Australian solar grid owners for the most of the Jan 2014 and the July 1 price drops that have seen over 4 cents per kw dropped off the price so far following the wholesale drop in the price of power filtering through!

This comes about because states like Queensland have seen the high take up of solar (near 30%) strip out the peak demand and thus lowered the price of power to the energy retailers in the N.E.M. (National Energy Market). In short, the wholesale price flattened, just as in Germany. This is an energy giant’s worst nightmare coming true as it strips profitable energy trading opportunities out. But it is a god send for consumers.

Hydro Tas follows suit as a member of the N.E.M (National Energy Market). That means their wholesale price also drops and that is passed through Tasnetworks to Aurora and all other energy retailers(!) in Tasmania as a result! And we know everyone loves a price drop in power, and is this not what all governments had been trying to achieve anyway?

Hydro Tas is insulated from expensive power shortages in our peak demand times because of our flexible Hydro system, but also enjoys the benefit of both buying in mainland excesses very cheaply and then supplying our hydro power back to them during their peak demand periods at a good profit. This is due to the inflexibility of fossil fuelled power generation on the mainland.

The exception was when we experience a long period of drought and we ended up with a massive shortage of water in April 2008. We imported some 293Gw of power from the mainland as Hydro Tas power production was shut down due to lack of water in the dams. But rooftop solar, if supported simply by a fair F.I.T. (Feed in Tariff) and not discouraged by local government, would be able to avoid repeats of this drought event with only 12 months of solar production (with only 20% participation rate).

So how do we encourage the uptake of solar in Tasmania? We provide a fair and reasonable Feed in Tariff (FIT). The current FIT does not credit the solar system owner for any of the network costs associated with the production of power. The high transmission lines are not used at all and only a small portion of the low voltage lines are used. Right now the solar grid system owners of Tasmania are subsidising the system, which is the very thing which was not allowed in the terms of reference for a ‘fair and reasonable’ feed in tariff. If the network costs were included in the FIT, we would see the FIT increase to somewhere between 16 and 19 cents per KwH. The increased FIT backed by genuine local government would see the uptake of solar increase and then in the long term drive down the wholesale price of powers more. This could also mirror California where the solar industry saw long term support that is delivering the extra benefits of business and jobs growth that we desperately need.
John Thirgood, www.facebook/saveoursolartas