5 September 2016, Renew Economy, One small gain for battery storage, one big win for fossil fuel industry. Australia’s principal policy maker for the energy markets has waved through a rule change that could accelerate the use of battery storage to provide grid stability as more renewables enter the market. But the rule maker has shocked participants with another decision that may reinforce the dominance of the big fossil fuel utilities. The Australian Energy Market Commission late last week made two rulings that it was first asked to consider way back in 2012 (such is the glacial pace of change in Australian regulatory circles) but which seen as critical as more wind and solar enter the market and old fossil fuel generators are phased out. One of the rulings was good news and largely expected: The AEMC said it would allow “unbundling” of ancillary services for the grid – which provide fast-acting balancing responses following a “contingency” event, usually the unexpected loss of a large thermal generator. This means that these services, known as FCAS, can now be more easily provided by more players, and not just the big generators, which currently control the supply (and thus the price) of FCAS services. Allowing new players like batteries and demand response loads should increase the supply of FCAS, and lower market prices. That ruling was largely uncontroversial and expected, with any opposition by incumbents lukewarm at best. The second ruling, however, has stunned some participants in the industry, because it effectively limits the amount of battery storage and new ideas – such as aggregating power plants in homes – by leaving it in the control of the major players. The proposal was to create a “demand response” mechanisms in the spot market to respond to times of high load, and high electricity prices, as were experienced in South Australia and other states in recent months, and which used to be frequent years ago, and may well become regular again as gas prices rise. Read more here
Category Archives: Wind
5 September 2016, The conversation, Can, or should, we save ARENA? Once again the essential development of the renewable energy sector has been stymied by short-term, opportunistic politics. Included in the Turnbull government’s “omnibus” savings bill is a A$1.3 billion cut in the funding of ARENA, the Australian Renewable Energy Agency, a cut, coming on the heels of a couple of previous cuts, that basically wipes out any future role for ARENA. The proposed cut is part of the Abbott legacy that sought to effectively close down the renewable energy sector. Although the government has presented the bill in the name of budget repair, it is also very much a political manoeuvre designed to wedge opposition leader Bill Shorten, by claiming that he had committed to these cuts during the election campaign, and recognising that a couple of the proposed cuts are either inconsistent with “traditional Labor values”, or with declared Labor policy, such as their commitment to a 50% renewable energy target for 2030. Shorten is under considerable pressure to demonstrate his bona fides on budget repair, and especially as he has expressed a willingness to “reach across the aisle”, to work with the government on this urgent policy challenge. However, both sides seem to still be stuck in campaign mode, moving from one stunt to the next. It is all about short-term politics, not good policy and good government. Read more here
17 August 2016, Renew Economy, First act of Coalition’s “innovation” government: strip funds from ARENA. Malcolm Turnbull’s Coalition government has taken a new line of attack against the Australian Renewable Energy Agency, and sought to wedge Labor on the issue by adopting the Opposition’s own pre-election policy platform on the future of the agency. As part of its $6.5 billion “omnibus” budget repair package to be put to parliament in its first act of the new government, the Coalition proposes to change tack: instead of stripping all of the remaining $1.3 billion legislated funds in ARENA’s budget, it now proposes to remove $1.023 billion in funds – as proposed by Labor before the election. Labor’s threat to strip ARENA of $1 billion in funds was made in an apparent fit of pique earlier this year over the failure of NGOs to criticise the Turnbull government when it announced the creation of the Clean Energy Innovation Fund, using monies already allocated to the Clean Energy Finance Corp. Labor argued that instead of applauding a move by the Turnbull government to “re-brand” previously allocated monies, it should have been critical of the move to de-fund ARENA. So it decided to abandon its own support of the key agency. While Labor later said it was prepared to review that decision, party sources admitted to the Australian Financial Review on Wednesday that it remained a “grey area for us” because of their pre-election policy. On ABC Radio, treasury spokesman Chris Bowen refused to commit Labor to protecting ARENA. Stripping ARENA of $1 billion of funding would be a huge blow for the emerging technologies in Australia, which usually need grants to test out new business models and applications, as witnessed by ARENA’s support for two key battery storage projects in South Australia, and its support for large scale solar. Read More here
2 August 2016, Renew Economy, South Australia takes on networks over soaring grid charges. The South Australia government has decided to take on the monopoly electricity network operator in the state as it continues its campaign against the market dominance of the powerful energy oligopoly, and their ability to pass on huge price increases to consumers that are often blamed on wind and solar. Network costs in South Australia – like most of the country – account for more than half the average household bill. Consumers were hoping to get some relief after the Australian Energy Regulator knocked back some of the planned spending by SA Power Networks, but its ruling is now being challenged in court. Energy minister Tom Koutsantonis says he will send a senior public servant to appear before the Australian Competition Tribunal this week, accusing SAPN of “cherry picking” individual spending decisions from the AER in the hope of boosting its overall spending allowance. It’s a crucial intervention by the state government, and comes amid huge public controversy over its ambitious renewable energy plans, and the already high penetration of wind and solar that could reach 50 per cent by the end of the year. Recent high wholesale electricity prices have been blamed by many in the Coalition, and the Murdoch media, on the state’s reliance on renewables, even though most independent analysts and market regulators blame soaring gas prices, grid constraints, and other factors. South Australia has long had the highest electricity prices in the country, a point underlined by federal energy minister Josh Frydenberg last week, who also pointed out that the recent spikes in wholesale prices used to be a regular event even before the build out of large wind farms and rooftop solar. Read More here