Push to reform electricity market gathers pace

Push to reform electricity market gathers pace

The City of Sydney has teamed up with Australia’s major property industry group and a leading environmental organisation to push for a change to make electricity cheaper and cleaner.

Recognising that local generation is a win for the environment, businesses and consumers, the Property Council of Australia and the Total Environment Centre have joined with the City to ask the Australian Energy Market Commission (AEMC) to change the rules that govern the electricity market.

Across Australia, a fundamental shift is occurring as more and more businesses and households are generating and exporting local electricity. Local generators range from office buildings with generators in the basement through to sugar mills making electricity from waste heat to residents with rooftop solar installations

As well as saving money for themselves, local generation benefits all users by bringing down the costs of transporting power across long distances from remote power stations (can be more than half the cost of electricity bills for both households and businesses).

Unfortunately, electricity rules in Australia have not kept pace with change.

Under current rules, full network charges are still payable if an office tower with its own generator sends surplus power to the building next door or across the street. This fails to recognise the savings made from not using the long-distance networks of poles and wires.

The proposed rule change would ensure local generators receive a credit for surplus power exported to the grid which reflects its economic value – increasing the financial return for local energy projects, making the electricity network more efficient and lowering electricity prices for all consumers over time.

Lord Mayor Clover Moore said she was delighted to join the Property Council and the Total Environment Centre to push for a rule change that would encourage local power generation.

“For years the City has been pushing for a system that makes it easier for residents and businesses to access clean power that is generated and used locally. I am very pleased to be working with the Property Council and the Total Environment Centre on this next important step,” the Lord Mayor said.

The Total Environment Centre’s energy market advocate, Mark Byrne, said the rule change was a critical step in modernising the electricity market.

“If it is successful, this rule change would be a major milestone on the journey towards creating a modern, decentralised, low carbon electricity market fairly and cost-effectively,” Mr Byrne said.

NSW Director of the Property Council, Glenn Byres, said the proposed change would have major benefits for business and all electricity users.

“Changing rules to encourage more local power generation will improve energy efficiency, curb emissions and reduce network maintenance costs,” Mr Byres said.

“It is essential the regulatory environment acts to stimulate innovation and set a platform for the property industry to play its part in building better cities.”

Under the proposed rule change, local generators would get a credit from electricity networks because they only use a fraction of the poles and wires infrastructure when supplying electricity to a neighbouring building – reflecting the saved network costs.

The AEMC is the body that manages the rules in the national electricity market which includes generators, electricity networks, retailers and consumers. It will review the proposal and consult with industry, business and the community before making a decision.

 

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