The Australian government’s energy advisor has said customers should be charged less when demand for electricity is low, and be updated in real time of when they can take advantage of cheap power.
It has also warned time is running out for Australia’s energy grid to be revolutionised to pass on better returns to customers generating their own power, and that solar panels are now so popular the grid has hit capacity.
Australian Energy Market Commission’s (AEMC) new report, which investigated how the energy grid could handle an influx of renewable energy, said Australia was at risk of being locked into an outdated and inefficient system unless change is made.
It said that gave energy providers and governments a stark choice: spend billions of dollars on poles and wires to keep the current grid going, or engage in a complete re-think of the way the grid works.
“Not making these sorts of reforms and starting now sets ourselves up for a repeat of the sort of experience of driving large amounts of investment in hard infrastructure, which flows through to high prices,” AEMC chairman John Pierce said in a media release.
“There are serious choices to be made. To keep building traditional infrastructure and passing on those costs to consumers or get on with the job of implementing reforms to increase access to the network for new solar connections; to improve reliability and security while that happens; and to avoid gold-plating,” Mr Pierce said.
“Consumers are already doing their part and investing in their own rooftop energy generation but distribution networks are not moving quickly enough to realise the value of those investments,” he added.
“Where new rules are required to accelerate change we will push ahead with proposals for new distribution network pricing, access and connection arrangements if proponents don’t start that process themselves by early next year. We won’t stand by and allow the current situation to continue.
The report said companies should charge customers less during off-peak times, and let customers know when they can tap into savings by posting real-time updates online or on an app.
The report stated traditional infrastructure was expensive and was only used for a few hours each year to service peak demand.
It argued a better solution would be to introduce flexible pricing, where customers could reduce their bills by waiting to use energy-sucking appliances such as heaters and air conditioners, or charge their electric cars, when electricity was in less demand.
It would also offer incentives for households to feed excess energy from household batteries back to the grid when it was needed most.
“Flat tariffs are failing to give consumers the incentive to charge batteries or electric vehicles at times that reduce both energy bills and the load on the grid,” Mr Pierce said.
He said a reworked grid should be seen as a “trading platform” where customers could draw power, inject it back in or even trade it with one another.
It also recommended allowing customers to supply energy to community projects like a shared battery, dubbing it the “energy grid of the future”.
“Failure to act now would mean either fewer people are able to export solar to the grid, or all consumers will pay more to build new substations and poles and wires that are rarely needed,” Mr Pierce said.
“A grid-enabled trading platform will open up a whole new world of opportunities for households and businesses, providing payments for services like frequency control and network support to make the power system stronger and enable higher levels of domestic demand response.
“But escalating penetration of rooftop solar; industry-wide failure to comprehensively introduce cost-reflective customer reward pricing; lack of network visibility of low voltage network constraints; and inadequate technical network standards and compliance; are combining to reduce system security and efficiency,” Mr Pierce said.
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