AFR-7 June 2018 / By Angela Macdonald-Smith

Reforms are urgently needed in the way households pay for the electricity grid and to ensure maximum benefit is made from increasing investment in rooftop solar and batteries, network industry players have declared.

Existing pricing, where households pay for their network connection depending on how much grid power they use are “fundamentally unfair” and ignore the fact that the cost of the grid is driven by peak demand, said Energy Networks of Australia chief executive Andrew Dillon.

Mr Dillon called for a “combination of carrots and sticks” to change the system, including encouraging those that can shift their usage to either overnight, or, in future, to around mid-day when surplus renewable power will be generated.

Mr Dillon said the key challenge to the reforms is that there would be winners and losers in the short term, depending on the electricity usage pattern of households and their ability to shift demand to off-peak periods.

“But we can’t let that stop the reform or we are all going to be losers in the long term,” he said, calling on government and industry to take leadership in managing that transition.

Policymakers have for a long time recognised the need for “cost-reflective” prices for the grid to drive consumer behaviour, said Clare Savage, deputy chair of the Energy Security Board.

“Customers need the right price signals,” Ms Savage said. “That’s economics 101.”

But Greensync founder Phil Blythe said the industry had to move ahead of policy in this area and called for regulators, network owners and technology companies to work together to integrate rooftop solar and batteries into the system and keep the grid stable.

Dr Blythe, whose company provides software to manage distributed energy resources, told the ENA conference in Sydney that already within two years, the amount of solar in parts of the network would reach a critical stage, where so much solar power is being generated it would bring the transmission system to a standstill.

“It’s a totally different model. We don’t have the regulatory infrastructure to deal with it, we don’t have the technology frameworks today in place to deal with it,” Dr Blythe said. “Yet by this conference in two years, we are going to have to have systems in place.”

He said the industry needs to be “braver”. “The time for trials, playing around the edges is past,” Dr Blythe said.

Mr Dillon also suggested developing the hydrogen industry to help manage excess solar production, given some parts of the network can’t handle additional solar.

He said excess renewable power could be used to convert water into hydrogen using electrolysis. The hydrogen could be then stored in gas networks, which offers a storage capacity equivalent to 6 billion Tesla Powerwall batteries.


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