Antinuclear

Fossil fuel industries lobby against solar power: gas joins attack by coal utilities

 What neither industry likes to talk about is the pricing of the network – did they invest too much money in network infrastructure, and shouldn’t they take a write down on those assets, rather than just charging customers more?.

Gas networks attack solar policies, fearing mass defections By Giles Parkinson on 26 September 2014  Gas industry calls for solar hot water rebates to remove to try to slow down mass defections from gas networks it fears will be caused by soaring gas prices.

The Energy Network Association has released a report that suggests the industry could lose one quarter of its customers as a result of soaring prices. It says 1.15 million households could drop gas and defect to solar hot water in coming years.

As a result, it is repeating its call for federal subsidies, under the small-scale component of the renewable energy target that covers rooftop solar PV and solar hot water, in an attempt to stem the flow.

The ENA issued a media statement that claimed that non-solar hot water households would face bill increases of $50 a year if the subsidies were not removed.

The media release was given to the Murdoch press, which, of course, reported it dutifully, with the emphasis on solar subsidies. But it only takes a few minutes looking at the report itself to find out what the real issue is here……..

the death spiral is happening anyway, thanks to soaring gas prices. The attempt to recoup network costs as people adopt solar will result in even further bill increases.

The gas industry is just trying to gain some breathing room by calling for the SRES to be abolished. It estimates that half the fall in demand could be blamed on solar subsidies, and half on soaring gas prices. This graph to he right illustrates how ending solar policies could affect demand.

The electricity industry has been using this “death spiral” argument to fight against feed in tariffs, and more recently to the federal subsidies available under the renewable energy target……….

The study finds that there is potential for Network costs to increase by up to 20 per cent in real terms over the next 20 years, with the majority of this increase to occur by 2019. But it points out that price will account for half of this (as bills are increased as people drop gas).

“Assuming that Network costs remain approximately 50% of a total retail bill, there is potential for price and policy factors to give rise to a 10% real increase in retail prices, with the majority of the rise over the next five years.”

This, it says, equates to a hidden cost that would mean that gas network costs would be $50 per year more – in 2034 – than thy would if the solar subsidies were removed.

The analysis was prepared by Core Energy Group, a consultancy with predominantly gas industry clients and whose CEO, Paul Taliangis, is a former head of corporate planning at Santos, the country’s largest independent gas producer.

What neither industry likes to talk about is the pricing of the network – did they invest too much money in network infrastructure, and shouldn’t they take a write down on those assets, rather than just charging customers more?……http://reneweconomy.com.au/2014/gas-networks-attack-solar-policies-fearing-mass-defections-32229

October 1, 2014 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, business, politics