Antinuclear

Australian news, and some related international items

Solar energy should be priced fairly, recognising its many benefits

Avoided transmission costs…… Reduced distribution costs… Reduced CO2 emissions…. Health benefits…… Retailing costs….. Additional benefits

A fair price for rooftop solar? Try 10-18c/kWh REnedweconomy, By  on 20 March 2017

This is the first of a series of articles produced by the fair value for distributed generation project. In this article we explain the background to the project and the basis for our calculation that local rooftop solar is currently worth in the range of 10-18c/kWh when all the network, environmental and health benefits are taken into account.

Solar feed-in tariffs (FiTs) have had a controversial and complicated history in Australia.

Many states started out with very high FiTs. Arguably some of the premium tariffs were allowed to continue for too long and should have been reduced gradually, but it is important to recognise that these policies did achieve significant benefits.

These schemes built a solar industry in Australia that delivers significant quantities of affordable, low-carbon energy into our grid. The renewable energy industry employs 14,000 people[1] and has led Australia to have by far the highest penetration of household rooftop solar in the world [2].

All the premium (i.e. paying more than the retail cost of electricity) schemes are now closed to new entrants, although some still have a number of years to run for existing eligible systems.

Setting of regulated minimum FiTs in Australia has always been a state responsibility. The current situation in the National Electricity Market (NEM) region is that regulated minimum tariffs are set in regional Queensland, Victoria and Tasmania.

There is no regulated FiT set in SA (as of 1 January 2017), NSW, ACT and SE Queensland, with governments and regulators arguing that in a competitive retail market, retailers will offer an attractive FiT to attract customers.

Regulatory bodies periodically review the methodology for determining FiTs and it was the combination of three forthcoming state reviews that prompted a consortium of organisations to seek and receive funding late in 2015 from Energy Consumers Australia to review and advocate on these methodology issues.

The consortium consisted of Solar Citizens, the Alternative Technology Association, the Australian Solar Council, the Total Environment Centre, the Clean Energy Council and the Tasmanian Renewable Energy Alliance.

Submissions were made to state review processes in Queensland, Victoria and Tasmania, as well as to the review that led to the abandonment of regulated FiTs in South Australia. We also produced a range of advocacy materials that are currently being used in the Solar Citizens Fair Price for Solar campaign.

One of the headline findings of our project is that local rooftop solar is currently worth in the range of 10-18c/kWh when all the network, environmental and health benefits are taken into account as summarised in the following graphic. [on original]

In addition to the avoided cost of purchasing wholesale electricity, solar pv can play a role in pushing down the wholesale price of electricity for all consumers through the ‘merit order effect’ which can be significant when demand and wholesale prices are high.

The range used in our estimate (5.1c-6.1c) is based on the national average price for 2014-2015 through to a 20% premium to cover time of day and merit order benefits. These figures are likely to be very conservative given recent and projected increases in wholesale electricity costs.

Avoided transmission costs…… Reduced distribution costs… Reduced CO2 emissions…. Health benefits…… Retailing costs….. Additional benefits….http://reneweconomy.com.au/fair-price-rooftop-solar-try-10-18ckwh-91433/

 

March 23, 2017 - Posted by | AUSTRALIA - NATIONAL, solar

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