Success of solar power is giving a shock to Australia’s utilities
Fear and loathing as utilities grasp impact of solar PV, REneweconomy By Giles Parkinson 21 May 2012 Australia’s power generators and electricity network operators are viewing the rapid falls in the cost of solar PV and an anticipated surge in installation with an increasing level of concern.
The potential of solar PV to deliver cost-effective options for home and commercial consumers has been apparent to many in the industry for some time.
The report delivered by the Victorian Competition and Efficiency Commission into solar feed-in tariffs merely confirmed this, and offered it as a potential excuse for the utilities’ apparently lack of enthusiasm to ensure connections for solar PV and other forms of distributed energy.
While plunging costs are good news for consumers, who can turn to solar PV in increasing numbers with the emergence of innovative financing solutions, it is a massive headache for the incumbent generators and network operators, who are about to witness business models built up over decades being shredded by a technology that is as disruptive to the electricity industry as mobile phones were to telecoms…..
Australia has just over 1.5GW of solar PV installed on rooftops now – so there is little apparent impact on the NEM as it stands. By 2020, when the percentage of households with solar PV is expected to treble from around 7 per cent now to 19-20 per cent, the impact is significant.
By 2030 and 2035, it takes a large slice out of the generators’ earnings pie – an impact that has already been established in Germany, which has 25GW of solar PV and counting, and which we documented in our piece “Why generators are terrified of solar.”
It should be remembered that the profit projections – and the debt repayments – built into the Australian generators’ financing models depend almost entirely on the “super dividend” they receive when peak demand surges and the cost of wholesale electricity rises up to 10-fold for just a few hours of the year. A large deployment of solar PV will quite literally throw a spanner in those works…… http://reneweconomy.com.au/2012/fear-and-loathing-as-utilities-grasp-impact-of-solar-pv-15262
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