Customers have power over Australia’s energy future

Customers rather than Utilities will hold the power to control Australia’s energy future.

The Energy Networks Association (ENA) interim report Electricity Network Transformation Roadmap project predicts a shift in power from utilities to customers in the future.

The Energy Networks Association has partnered with CSIRO to develop a ten year transition plan for the electricity sector which is focused on customers and developed with stakeholders.

ENA CEO, John Bradley, said, “The big shift in our energy future is the transfer of decision-making and control from a handful of energy utilities to millions of Australian customers,

“CSIRO’s latest analysis shows more than $224 billion – or more than a quarter – of all electricity system expenditure to 2050 is likely to be made by consumers,” Mr Bradley said.

Mr Bradley said this new report will assist Australia’s electricity system in supporting customer choice and control, reducing costs, ensuring fairness and delivering the clean energy transition.”

The Electricity Network Transformation Roadmap found that in the next ten years, storage costs could fall by approximately two-thirds and the cost of solar panels will fall by a third.

The interim report also found that the outlook for long-term electricity customer bills has improved since 2013 modelling and sees a slightly lower share of income spent on electricity than previously expected – due partly to the benefits of battery storage to the system.

Another key finding is that there will be stronger incentives to take up solar panels but also the potential for increased cross subsidies among customers if cost-reflective pricing is not addressed.

The electricity sector could also play a significant role in efforts to reduce greenhouse gas emissions with up to 51 per cent abatement in the sector by 2030.

While the electricity grid has a key role in all scenarios, it may be used very differently in the future – as a ‘platform’ for new energy services.

CSIRO Energy Chief Economist, Paul Graham, said, “The CSIRO’s 2013 Future Grid Forum provided a detailed view on Australia’s future electricity system. This 2015 update of four scenarios will act as the baseline for final Roadmap recommendations, which are due in late 2016.”

Mr Graham also said that the report confirms the electricity sector can play a significant role in Australia’s efforts to reduce greenhouse gas emissions.

“By 2030, projected electricity sector abatement will range from 29 per cent to 51 per cent compared to 2005,” Mr Graham said.

One scenario outlined in the interim report models near zero emissions from the electricity sector by 2050.

This scenario relies on the grid to connect dispersed large-scale renewables, requiring more network infrastructure than other scenarios – with about 73 per cent of electricity provided by the grid from large -scale renewable generation and the remainder from rooftop solar panels installed by the end-user.

In terms of future bill outcomes, Mr Graham, said that the outlook for long-term electricity customer bills has improved since the 2013 Future Grid Forum Modeling.

“The CSIRO forecasts that electricity retail bill increases will be less than previously forecast, and expect them to remain the same 2-3 per cent share of average household expenditure, as they are today,” Mr Graham said.

“Solar and storage costs have also become more competitive since 2013, with current costs already 20 per cent lower. They are expected to fall by around two-thirds in the next 10 years, while solar panel costs are expected to fall by around one-third.”

In response to the report Ergon Energy said it’s a significant step in establishing an equitable electricity pricing system for customers in regional Queensland.

Ergon Energy, as a member of the ENA, has joined other Australian electricity transmission and distribution network providers in proposing ‘a national approach to fast-track the benefits of electricity tariffs which reward consumers for contributing to lower network costs’.

Some scenarios outlined in the interim report found that the technologies and role of the network will change significantly with an increasingly ‘two-way’ network, with some scenarios seeing up to 45 per cent of electricity from onsite generation – such as solar panels on homes.

Mr Bradley said that the business model of the network could evolve fundamentally to a ‘platform provider’, enabling new energy services and uses, as opposed to the conventional ‘poles and wires’ service.

“Australia has a clear window of opportunity to reshape our electricity system to enable the customer-driven take up of new services, like renewable and low-emission generation, home automation, battery storage, and electric vehicles,” Mr Bradley said.

The Network Transformation Roadmap, to be released in late 2016, will identify specific actions for businesses, policy and regulation as part of an integrated pathway for Australia’s energy transition over the next decade.