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‘Tipping point’: Energy regulator says electricity grid won’t cope with more solar

AEMC chairman John Pierce said the regulator “won’t stand by and allow the current situation to continue” as energy networks are forced to cut off solar PV flows from the grid because of the power system’s inability to connect to new technologies.

“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,” Mr Pierce said.

The proportion of electricity generated by solar panels and wind turbines rose from 9.8 to 12.6 per cent of total generation in 2018.

“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,” Mr Pierce said.

The AEMC’s economic regulatory framework review found a system that does not provide consumers with choice or reward supportive behaviours could drive up costs.

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Customers in NSW and Victoria are already battling energy price rises of up to 10 per cent a year.

“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.

The regulator’s concerns echo those of the government-backed Clean Energy Finance Corporation. The $10 billion green bank is increasingly shifting its focus away from new renewable technologies towards bolstering the grid so that renewables can be transmitted.

“I guess the speed of [grid scale renewables] has probably been faster than expected and therefore we have got to start investing in the grid to support that,” Chief executive Ian Learmonth said in August.

The Integrating distributed energy resources for the grid of the future report, to be released on Thursday, calls for distribution networks and the Australian Energy Regulator to focus on implementing cost-reflective network tariffs which reward customers who have invested in rooftop solar for using and storing electricity in ways that help the grid work most efficiently.

It also proposes instead of consumers paying only for energy consumed, they would pay for access to the services they need through the network and be rewarded where they can provide services back to the grid.

Federal Energy Minister Angus Taylor said the government supported policies that provided flexibility and more choice for Australian consumers.

“It is crucial that any changes put consumers first and focus on reducing costs,” Mr Taylor said.

“Australia is the world leader in residential solar, with around 20 per cent of households now having rooftop solar. Other distributed energy resources such as household battery storage and smart appliances are growing strongly.

“With such a large and growing amount of distributed energy resources, it’s critical that our energy system evolves to manage two-way energy flows safely and efficiently.”

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