Power prices: AusNet Services warns customers going off the grid will push up costs for others
31 Aug 2017, 7:24am
Victorian power company AusNet Services has warned the increasing number of customers choosing to disconnect from the grid will push up the cost of electricity for those still on the network...
"One of the chief concerns in relation to grid modernisation is that new developments in the electricity sector could leave some customers behind, forced to shoulder an increasing share of the costs," it said.
The submission points to "grid defection" as an issue which may drive up costs for customers, as more and more households make the switch to solar and battery storage systems:
"Grid defection — whereby some customers choose to disconnect from the grid and purchase alternative sources of energy (e.g. a combination of battery storage and local generation such as solar PV). Customer disconnections will generally raise the cost of electricity network services to remaining customers. This is because there are little savings from having fewer customers connected to an existing network, and the costs of the system have to be recovered from fewer people. Because not all customers will be able to go off-grid (e.g. due to financial constraints, or because they rent or live in an apartment), trends that see significant numbers of people going off-grid will raise the costs to certain customers, including disadvantaged and low-income customers."
'Horrendously slow' progress on issue
David Blowers, an energy fellow at the Grattan Institute, said the risks of grid defection were low, since the cost of disconnecting was so high.
However, he said increased use of solar panels and batteries could have adverse effects on people already experiencing disadvantage.
"The danger is if more and more people use less and less electricity from the grid [and] this grows over time," he said.
"Because putting solar panels on your roofs or buying batteries costs significant amounts of money, then generally those that are most disadvantaged are not going to be able to do so.
"Hence they will end up covering more of the costs of the network than those people who have solar and batteries, and this could be seen as being unfair."
Mr Blowers said the issue had been discussed in the sector for many years, and appeared to have been put to bed three years ago when governments agreed to introduce cost-reflective pricing.
That would mean the price of electricity would more accurately reflect the actual cost of generation and supply, rather than fixed charges.
However, he said in the three years since there had been little change.
