Electricity Prices Increases on 1 July - What are you doing?

[glend (Glen)]

I see NSW customers of Energy Australia are facing a 20% increase in cost effective 1 July. This is tragic for retired people on fixed incomes, or those with just the ability to fund CPI type increases. I can not understand how they can get away with this. Of course blaming the government won't get much relief, and anything being considered in terms of the Finkel Report, is just going to increase costs further.
I was reading a story yesterday about a doctor in Baulkham Hills who had installed the big Tesla storage battery and panels of course, and she had also invested in a system called Reposit, which allowed her house to participate in the national market as a seller and buyer. The system sells power to the national market during peak price periods, and buys back (and stores in the battery) in low cost periods. Effectively her house is a micro-grid now participating in the national market to benefit her ( her quarterly cost dropped to $64). Can you make a business case for that investment?. Unfortunately many people cannot afford this technology, and those with the capital to do it effectively increase costs for the rest (as few users in the market mean the retail suppliers have to increase cts to cover fixed costs).
So what are you doing?

[bojan]

Planning for exit.

[casstony]

Solar panels are the obvious choice right now followed by batteries in a couple of years when the prices become affordable. We've had a 3.5Kw system for a few years which has halved our consumption. We also shift usage to sunny times of day or off peak times. Our bill is about $1000 per year.

[Atmos (Colin)]

I'm planning on building later this year and going off grid entirely. I don't think Vic is looking at such a price hike YET but we are looking at the second price increase this year.

[Nebulous (Chris)]

We're a retired couple and (while the money lasts) currently self funded. I watch the bills for services very carefully! But I believe that commercially supplied power (and water too) still represent fairly good value for what they do for us.

I've looked into being self sufficient in various areas and we do have backups for our important systems - e.g. 25,000 litres of stored water for either possible domestic use or bushfire fighting (we live in a fire prone area and over 50 houses were lost nearby in a major fire). We also have mobile modems and of course phones, and a generator that's professionally wired to the house so that we can switch over when the power goes out (over 20 outages per year is common).

We also have a solar system on the roof which reduces our monthly costs.

When I looked into it in the past, the benefits of 'economies of scale' that you get from having a big generating source that serves hundreds of thousands of households still seemed to outweigh the financial and environmental costs of us all having our own systems. Going off-grid seemed largely a personal and philosophical choice rather than necessarily a cheaper way to go. However, the market is changing fairly fast so that may become outdated.

On the issue of cost, solar looks good initially. It's easy to reduce your bill substantially. But after a certain point it gets a lot harder because you cant generate at night but you still usually need power then. Depending on the buy-back rates (which are pathetically low in WA) you need to generate (during the day) at least three times what you need to use at night or you're still losing money on the deal. And the peak period for solar generation is not all day, it's mostly just a few hours. So for true independence you need batteries - and they come with their own set of pros and cons...

Environmentally it also sounds good initially but if you look a little more closely at all the hidden environmental costs of manufacturing and transporting panels and inverters, it's not quite as rosy. And you need to factor in the service life and replacement needs (they don't last indefinitely and failures and performance degrading is a reality). And of course batteries are still a big issue both from a performance and service life angle but also environmentally when you take into account manufacture and disposal.

I believe it's worth supporting and that the solar industry is getting there, but I suspect that it still has a way to go before it can truly claim to be both financially and environmentally superior.

It's also been interesting to see a shift in attitude by the local power company. Initially they seem quite resistant to domestic solar power and even put limits on the necessary permissions to instal them if they felt that a particular street or area was already producing as much surplus power that could be dealt with by the existing infrastructure. However I recently heard a spokesman claiming that they are now looking at solar as a possible useful extra string to their bow. Largely because they have twigged that, especially in rural areas with bigger distances, it could save them money installing conventional grids. But at least attitudes are changing.

All the best with finding a solution that suits you.

Cheers,

Chris

[casstony]

I think a moderate size solar system (~4 KW) is already worth having financially, particularly if you can shift use of appliances to times when the sun is out. We have our panels facing NW to get greater benefit in Summer when the aircon is run all afternoon.

[Allan_L (Allan)]

The greatest CON of all time was perpetrated on the people of NSW when the State Government proposed to sell an efficient, power network with the promise of "It will increase competition and force electricity prices down".

The state government owned the entire setup. Coal mines, generators, distributors, and the grid.
Apart from providing very low cost power to the people, it also managed to return quite substantial "dividends" to the government (hundreds of millions each year).

How did we ever let them get away with it?

And now there is no one left to be accountable for the deception.

[Nebulous (Chris)]

Originally Posted by casstony

I think a moderate size solar system (~4 KW) is already worth having financially, particularly if you can shift use of appliances to times when the sun is out. We have our panels facing NW to get greater benefit in Summer when the aircon is run all afternoon.

I'd agree with that, at least in most situations. And so would the solar industry and a great many satisfied owners. I think that it's the full off grid option that's still much less less clear cut .

Our system is just under 4kw. The original plan was for more but, due to panel connection issues, they had to be installed in 'portrait' mode instead of 'landscape' and that meant one row less. But, as i suggested above, it does a great job of knocking the bills down. It's especially good in summer when we can run several aircons during the hottest part of the day and be using solely our own power. And, hey, it's a sunny winter's day and I'm using it right now to type this. And I could easily be running a heater too.

We have had problems, but they were not the fault of solar as such. However, they are not untypical of an emerging industry. In our case we have trees that shade the panels for part of the day, during the summer and more during the winter. So we have mini inverters. 14 panels 14 small inverters. So each panel that's in the sun will still generate at full power even though others are shaded and barely ticking over. This was not the case with the single inverter systems of the day which could only operate at the power of the worst performing panel in the chain. Not a problem in open sunny locations of course.

So, on the recommendation of a respected installer, we went for mini inverters that had a 25 year guarantee on them. After two years the company went bankrupt and five inverters had failed. The installer has stood by us and replaced them all, but he can't do that indefinitely. Fingers crossed... A friend has a single inverter system and had a problem with it. When he contacted the makers he was told to deal with the installing company, who - you guessed it - have since vanished from the scene! The generous incentive schemes, especially the early ones, lured a lot of cowboys into the industry and it's still dealing with the fallout from that.

In our case, with hindsight, it probably would have been more cost effective to put up the cheapest Chinese made system on the market and be prepared to write it off every few years. But that wouldn't have felt right for other reasons.

I'm a firm believer in solar power, but I think there's still a lot more potential refinements to come. Bring it on...

[AndrewJ]

Gday Alan

Apart from providing very low cost power to the people, it also managed to return quite substantial "dividends" to the government (hundreds of millions each year).

Another thing it did is going to start biting us very soon.
The large Govt utilities ( Gas, Electricity, Water ) also had the mass and social awareness to support and train large numbers of apprentices for their full terms, and could give them a very wide range of experiences along the way.
IIRC, a study came out last year ( associated with the TAFE debate ) re what the effects of the new profit first system is going to be as the currently qualified people start to depart the system, and we realise we dont have the required no of new people to replace them. 457s anyone???

Andrew

[luka]

I agree that for most of people solar is financially good decision, provided you will still be living in the house in 4-5 years. The return-on-investment time for the initial investment will of course depend on individual circumstances. The technology will improve but considering the current installation cost and the raising power costs, it is worth jumping in now.

And Chris, you are absolutely right, there are lots of dodgy installers offering cheap deals and horrible/dangerous installation practices. Whirlpool forums is a great place for advice and finding reputable installers. They may cost a bit more but at least your panels won't fall off in a year

Regarding the batteries, the technology is still new and the prices will most likely go down in the next few years so it is probably worth waiting. But if you are getting a new solar installation, make sure your inverters are designed to worth with batteries, otherwise you may need to swap them in few years.

Glen, unfortunately the cost will go up even more as people go off the grid as there will be less people to pay for the grid infrastructure.

And if too many people go off the grid I would not be surprised if they try to introduce new fees/taxes to the off-the-grid people to subsidise the running costs of the grid.

[AussieTrooper (Ben)]

Originally Posted by Allan_L

The greatest CON of all time was perpetrated on the people of NSW when the State Government proposed to sell an efficient, power network with the promise of "It will increase competition and force electricity prices down".

The state government owned the entire setup. Coal mines, generators, distributors, and the grid.
Apart from providing very low cost power to the people, it also managed to return quite substantial "dividends" to the government (hundreds of millions each year).

How did we ever let them get away with it?

And now there is no one left to be accountable for the deception.

I had that exact conversation a few years ago with someone involved in pushing for the sell off. His justification was that health care costs were increasing faster than the budget's ability to pay for it. Privatisation would pay for a decade of it.
I asked him "what will you do in ten years time when the money is gone, and you no longer have the revenue stream because you sold it?"
He had no answer, nor did he seem to understand the problem.
Signing a dodgy contract to screw over the next government and then blame them for losing the money seems very trendy these days.

[AussieTrooper (Ben)]

Originally Posted by AndrewJ

Gday Alan



Another thing it did is going to start biting us very soon.
The large Govt utilities ( Gas, Electricity, Water ) also had the mass and social awareness to support and train large numbers of apprentices for their full terms, and could give them a very wide range of experiences along the way.
IIRC, a study came out last year ( associated with the TAFE debate ) re what the effects of the new profit first system is going to be as the currently qualified people start to depart the system, and we realise we dont have the required no of new people to replace them. 457s anyone???

Andrew

The SEC in Victoria made a profit. We also had some of the lowest power prices in the world.
The system is now vastly less efficient than it used to be. There are now about 5,000 people involved in the energy retail sector that weren't there before. They provide zero actual service that wasn't there before.
The engineering is now outsourced, so rather than paying an SEC employee $50/hr, you pay a foreign owned consultant $250/hr.
For these, and other reasons already stated, privatisation has been a disaster.
There was no other possible outcome than higher prices.
We have reaped what we sowed.

[AndrewJ]

Gday Ben

The engineering is now outsourced,

True
In the past, the Utilities were mainly run by engineers who's job was to keep a "supply system" running, including doing integrated planning for the future. Now we have huge numbers of small companies, all with duplicated board members and executive officers, and all trying to make a profit for their company, and to hell with the effects on others.

Andrew

[Allan_L (Allan)]

In answer to the specific question, Glen, I have a 4.1 kw solar panel system.
No battery, too expensive and hardly effective IMHO.

I monitor power produced and used real time. And try to schedule high power drain appliances in sequence. A lot of people don't seem t understand that.
For example, we produce more than we consume most days, but in real time, we don't have enough solar power to run much more than a kettle(2400watts) at the same instant. Any two heavy drain appliances running at the same time will almost always mean we are still buying from the grid to cover the total at any one time. And that does not even account for periodic drop in production due to passing clouds.

Furthermore, depending on the next bill, I may need to switch suppliers to take up a better offer.

[glend (Glen)]

Trooper, Re that Victorian situation, the reason the power was so cheap was the old Hazelwood brown coal plant was supplying power to Victoria, at $40 per megawatt hour. Those days are long gone, it could not be replaced today.

Meeting the Paris targets means coal has to go, i can't see another way. Unfortunately, politicians blaming each other accomplishes nothing towards making things better. No leadership.
In a leadership vacuum people take their own micro action.

[Astrophe (John)]

We should blame ourselves for this situation. When state governments wanted to sell off our electricity generation industry, did you hear an outcry from the public.....no, not even a murmur.

How is it that governments (which are only there for 5 minutes or so) are allowed to sell off an industry which has taken generations (no pun intended) to establish? They didn't ask our permission....they just went about things, as if we didn't exist.

Should we now demand the return to public ownership of these essential services?. We used to have some of the cheapest electricity in the world....now it's up there with the most expensive.

Someone once said....'the price of freedom is eternal vigilance'. Well, we now have to pay the price of our neglect.

[Exfso (Peter)]

SA has been copping these price hikes for years. That is why it is the most expensive state in Austalia for Power, and obviously going to get worse. Roll on Batteries....

[glend (Glen)]

Originally Posted by Astrophe

We should blame ourselves for this situation. When state governments wanted to sell off our electricity generation industry, did you hear an outcry from the public.....no, not even a murmur.

How is it that governments (which are only there for 5 minutes or so) are allowed to sell off an industry which has taken generations (no pun intended) to establish? They didn't ask our permission....they just went about things, as if we didn't exist.

Should we now demand the return to public ownership of these essential services?. We used to have some of the cheapest electricity in the world....now it's up there with the most expensive.

Someone once said....'the price of freedom is eternal vigilance'. Well, we now have to pay the price of our neglect.

Politicians focus on getting re-elected and selling off assets is a well trod path towards splashing funds around in constituencies at risk of loss of a seat. An opportunistic politician only needs a majority in Parliament to cash these assets in for short term gain. Once lost from public ownership they cannot come back.

However, the days of cheap power ( as a result of burning cheap brown coal) are gone, and cannot be brought back, so no point in trying.
It will be interesting to see if the Fed are going to increase the Pension by enough to cover the increase in electricity cost, want to bet on that happening?

[stanlite (Grady)]

The issue of higher prices are far more complicated then just the government selling the ownership rights it has to do with the disruptions being caused surrounding the entire economics of Electricity.

the recent spikes in power prices are mostly due to the closure of large base load power stations in SA and VIC (as they reach the end of there working life) and the lack of sufficient base load replacements. eg. demand is greater then supply = prices go up 20% in a year.

Now the simple answer is we sold it and now the companies don't want the expense of building new ones because they can take us for a ride (profit wise) sounds right but there are deeper issues at play (which the finckel report is trying to address). Primarily the issue is one of the return one can generate on investment in a power plant. It doesn't matter who builds it (gov or private) it only makes economic sense to build a power plant if it can cover its costs of construction and running (gov) and turn a profit (private). Given the expense of building these things the return profile is stretched out over 20-50 years (otherwise the prices charged to get a decent return would be huge ... think paying of a house over 3 years as apposed to 30). This means that before you even commit to building you need to be sure that the Demand for your product (greenhouse power in this case) needs to be there pretty much a full capacity for the next 20-50 years.

As an economist knowing these things allows us to generate risk models and expected rates of return that need to be achieved before a project becomes viable. In the case of Coal fired power plants in Australia (different profiles for different markets/countries) the expected/required rate of return needed at the moment is around 10-15%pa. This actually means that renewable power options are making more economic sense (even without subsides) because they currently attract only a rate of only 7-10% (this is what i have heard I need to do more research). This essentially means that the age of building profitable coal (and even some types of Gas) power plants is over. The almighty dollar and economics markets have decided this and no amount of government intervention can change this (beyond delay of the inevitable)

For example the wholesale price of power at the moment is approximately $120 a MW/h or $0.16 a KW/h is is up from $80 perMW/h or $.08kw/h last year before the VIC and SA plants closed. So wholesale prices are currently up 100% (prices should fall during winter as summer demand dissipates). This means you need to be able to build a power plant that can generate power for $.16 or less (if you want profit). At this rate no coal plant can compete long term, Gas can but there are other issues at play and renewable are fast approaching this level. Given the uncertainty (mostly caused by the continuing fall in cost for renewable) no sensible company (or government) is game to build a plant based on coal (and soon gas). Because as the cost of renewable continues to fall the fast approach the point at which they not the base load generators set the market price (think 2 years for solar before its cheaper then coal per kw/h its already the case with wind). This will only get worse as storage prices fall also. Eventually electricity prices will regain some sense of normalcy and may even fall but not until the disruption caused by the biggest shift in how we produce and consume energy is complete and the invisible hand of economics has had its way with us.

The same forces that give us ever cheaper astro/electronics gear is biting us on power.

[Nebulous (Chris)]

Originally Posted by Allan_L

I monitor power produced and used real time. And try to schedule high power drain appliances in sequence. A lot of people don't seem t understand that.
For example, we produce more than we consume most days, but in real time, we don't have enough solar power to run much more than a kettle(2400watts) at the same instant. Any two heavy drain appliances running at the same time will almost always mean we are still buying from the grid to cover the total at any one time. And that does not even account for periodic drop in production due to passing clouds.

That's a very good point Allan. Our monitoring system allows us to see the output of each separate panel at any given time, which is very handy but it doesn't give us any simple figures for consumption versus production. When we first had the solar installed we had an old fashioned meter with a spinning metal disc. When production matched consumption the disc would stop completely. Easy to get a general idea of how to do the matching you suggest.

But the great thing was that when we were exporting it would actually run backwards! The usage reading on the meter would also start going backwards. So when we used grid power at night we could in effect get back 100% of what we had exported during the day, in a cost neutral manner. Which seemed very fair to us!

This went on for over a year, despite the meter being read regularly, the panels being clearly visible on the roof, and a big red Warning Solar sign in the meter box. But of course it was too good to last and eventually we were given "free of charge" a shiny new digital meter that keeps a hawk's eye on everything and makes sure we now only get a few measly cents for what we export.