QLD Productivity Commission

Some take-home messages:

    • The QLD Government is getting a big rake-off from high prices, and so is hooked on them
    • Written submissions due by 16 Nov to the Electricity Pricing Inquiry, and by 23 Nov to the Solar Fair Price Inquiry
    • The electricity network is massively overbuilt, and was a mistake of estimating future demand to be much greater than it is. The value of the network should be written down on the QLD Government's books.
    • Retailing of electricity came in in 2005 and that is when prices started to go wrong.
    • The service fee includes charges for acquiring and retaining customers. The service fee has grown sharply.
    • "We don't have the luxury of continuing to waste our hydrocarbons on generating power at 18-22% efficiency." Chris Brown - SkillsTech
    • Energex et al want $41billion more to 'upgrade/improve the network'!
    • There is a 2.1% drop in Australia's power consumption and it is continuing to trend steadily down. We have a reducing overall household electricity demand year after year because of efficiency.
    • Our current electrical supply system has been in place for more than 100 years and the distribution network is sub-economic. It uses AC distribution for historic reasons, but power is better distributed DC.
    • 40% more power is generated than you need just to get what you need, and we pay for the extra 40%.
    • Lithium batteries are the last thing you need to look at using in your home. Use the battery in your electric car. (Hmmm)
    • Nickel-iron batteries last over 100 years.
    • Stop knocking solar. We will all eventually get an almost free power system.
    • Batteries (may have) an interim storage role before a grid-enabled global power system.
    • 23% of our power bills are a retail cost - a total tack-on expense.
    • The Renewable Energy Target only adds 3% to the bill.
    • Feed-in tariffs are 8% of the bill.
    • Energex has increased power prices well beyond inflation.
    • 46% of the electricity bill is network charges.
    • The solar industry at peak in 2012 was a bigger employer than the mining industry.
    • Customers should instal batteries and focus energy export into peak demand period 4pm-9pm.
    • The global energy system is becoming largely decentralised (some different messages from different presenters)
    • Problems with nett feed-in tariffs. It would be better to have gross feed-in tariffs.
    • Electricity bills are the number 1 concern for household budgets (Choice survey 2015). Electricity providers are the least trusted in the country.. 60% of consumers in QLD are worried about how to pay their next electricity bill. 83% are doing whatever they can to reduce their bills.
    • Networks are the key drivers for price increases. Network providers get a guaranteed revenue for 5 year period. If demand drops, they increase the price! The technology and peak demand hasn't changed a lot. What is driving the costs are financing costs; the Solar Bonus Scheme, and the size of the asset (excessive investment). The financing costs are a key. The benchmark efficient price is 300% higher than needed and being charged to the consumer.
    • The QLD Government ought to be writing down the network asset.
    • Ergon/Energex are demanding $54billion more in the next 5 years because they didn't make as much profit as they expected in the past 5 years!!!
    • Net returns to the QLD Government growing by 175% over time. The QLD Government can reduce what it takes.
    • Energy companies are gaming the market by late bidding. The QLD Government can quite easily direct the energy companies to stop late bidding.
    • The Solar Bonus Scheme costs are levied on all households. They should be paid instead by the Government out of general revenue. There is a lot of cross-subsidy in the system.
    • We should be very careful about projections. The truth is all sorts of things can happen. Design to be robust regardless of what happens (a Transition Town truism!!!)  
    • Batteries and solar offer huge benefits for reducing need for networks but in QLD we have already built far more networks than we need, and we're stuck with them including paying for them.
    • Every appeal to the courts has resulted in increased costs for consumers. The appeals are complex and all about the cost of capital.
    • The QLD Government could direct the entities is owns to NOT support appeals which, if successful, would cost consumers a lot of money.
    • It is a false dichotomy to talk about a trade-off between spending on the network and reliability.
    • Energy prices are VERY LOW - well below the cost of replacement of the generating and distribution systems!!!!! Prices will rise when new capacity is needed.
    • For an individual householder to withdraw completely from the network would require a lot of batteries to be installed (if they don't adapt to use much greater efficiencies.
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