From 2025 onwards, Electricity companies will be able to charge rooftop owners for sending power back to the grid.
This new rule has been put in place by the Australian Energy Market Commission (AEMC) to remove blockages that are created by an influx of power from households, into the network, during the middle of day.
According to the chief executive of AEMC Benn Barr, ‘households selling their excess power back into the grid, are putting increasingly unmanageable strain on a system that was not set up to be two-way.’
It is envisaged that networks will only charge households for sending power in the middle of the day, when the grid is congested with excess supply.
Whilst still offering a financial incentive to those who send power when the demand is highest, during the early evening.
Benn mentioned that if rooftop owners do not want to pay for the export, they don’t have to export power.
He also added by saying that the rooftop owners can also choose to store the power in the batteries and send power back when there is a high demand. This will help us save energy and not let solar go to waste.
Furthermore, AEMC asked the power providers to develop a range of packages for consumers to choose from, which must include a “free basic service”. This way the power providers can not impose a flat fee on the consumer and can only charge them when there is congestion on the grid.
Finally Benn summed up by saying that, “What we’re trying to do is actually look to the future and a grid where it’s not just solar and solar exporting, but it’s also home batteries or community batteries or electric vehicles, and getting the grid ready for that”
The Australian Energy Market Commission (AEMC) is the expert energy policy adviser to Australian governments. Their role is to make rules which govern the electricity and natural gas markets, including the retail elements of those markets. The objective of the AEMC’s work is to promote efficient, reliable and secure energy markets which serve the long-term interests of consumers.
Each objective focuses on the long-term interests of energy consumers.
“The Australian Energy Market Commission is responsible for developing Australia’s energy markets under national electricity and gas laws – bringing consistent decision making and regulation to the energy sector”. ( AEMC website – accessed 16 April, 2019)
Australian Energy Regulator (AER)
The AER regulates the wholesale electricity and gas markets. It’s purpose is to make all Australian energy consumers better off now, and in the future. They regulate electricity networks and covered gas pipelines by setting the amount of revenue that network business can recover from customers who use these networks. They enforce the laws of the National Electricity Market (NEM) and spot gas markets in the southern and eastern states of Australia (Their jurisdiction does not include Western Australia). It is important that the interests of households and small businesses are protected which is the main objective of the AER.
“Our strategic objectives recognise that energy is an essential service for Australian households and businesses and a critical contributor to the long-term success of the Australian economy”. (AER website – accessed 16 April, 2019)
Australian Energy Market Operator (AEMO)
The Australian Energy Market Operator (AEMO) is responsible for operating Australia’s largest gas and electricity markets and power systems, including the National Electricity Market (NEM) and the Wholesale Electricity Market (WEM) in Western Australia.
“As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems information, security advice, and services to our stakeholders”. (AEMO website – accessed 16 April, 2019)
In this mix it is important to understand the following:
National Electricity Market (NEM)
National Electricity Law (NEL) National Gas Law (NGL) and National Energy Retail Law (NERL)
National Electricity Rules (NER)
National Electricity Market (NEM)
The NEM is the Australian wholesale electricity market that covers the electrically connected states and territories of eastern and southern Australia, and the associated synchronised electricity transmission grid. AEMC develops and maintains the Australian National Electricity Rules, which have the force of law for the NEM in the participating states and territories. The Rules are enforced by the AER.
National Electricity Law (NEL), National Gas Law (NGL) and National Energy Retail Law (NERL)
These laws are apply to New South Wales, Queensland, Victoria, South Australia, Tasmania and the Australian Capital Territory, and to a limited extent in the Northern Territory and Western Australia.
National Electricity Rules (NER)
The NER govern the operation of the National Electricity Market. The Rules have the force of law, and are made under the National Electricity Law. Up-to-date versions of the Australian National Electricity Rules can generally be found on the AEMC’s website.
Can this be a little confusing? Yes, maybe but as you read the news and the promises being made for a better energy future for our country, remember as consumers you are protected by regulatory bodies who protect consumers.
Still confusing? Contact our team at Watt Utilities who can help to clarify the roles of each of these bodies and the impact they will have on your future energy investment.
2019 is going to be a big year for Watt Utilities as we prepare to expand into the southern states. Established in 2006 as a family-owned business, the growth and success in Queensland has been phenomenal so it is time to increase our offering to New South Wales and Victoria. Our extensive knowledge and experience in energy procurement, make us an ideal partner in these states. Utilities, especially electricity and water, are currently under the microscope as prices continue to spiral and consumers are looking for a better deal. Watt Utilities specialise in watching the market to find the best deals for companies and bodies corporate.
Due to our rapid growth we have had the need to move to larger premises to accommodate our growing team. We have secured two tenancies at Clarence Property’s, Lakehouse in Robina. This new purchase provides us with 377sqm of floor space which will not only accommodate our growing Watt Utilities team but also our new tech start-up business, Run Your Own. Run Your Own is an online procurement platform which integrates with the major energy retailers and metering providers. The research and development of this program has been extensive and it is exciting to now launch it into the market.
The new Lakehouse premises will serve as the company’s Head Office and will house the current 17 staff while also offering plenty of room for further expansion.
“We continue to innovate and serve the industry, finding the best options in this complex utilities market”, Mick Newton, Director Watt Utilities and Run Your Own.
What is Network Tariff Reform and how does this affect you?
Network charges can make up more than 50 per cent of an electricity bill, but some businesses may not understand what network charges are. The following information will give an insight into how network charging works and what the Network Tariff Reform is.
What is Network Tariff Reform?
The Network tariff reform was passed by the AEMC in November 2014 directing all electricity distributors to transition to cost-reflective tariffs to ensure fairer and more equitable pricing from the networking body to customers. These changes were made to encourage and provide financial incentives for customers who use electricity outside of peak periods. This would lessen the pressure on the network at peak times, reducing the need to build more infrastructure resulting in less costs. The introduction of Time-of-Use (ToU) pricing provided opportunity for a customer to minimise energy usage and demand at a time when the network was under the most pressure. By encouraging the spread of a customers’ load profile with incentives of lower rates outside of peak times, demand would be lessened during those times resulting in less pressure on infrastructure and less risk of power outages.
Victoria was the first to roll out cost reflective ToU pricing as most customers were already equipped with adequate Smart Metering. From 01 July 2017 new capacity demand charges were introduced for business customers across Victorian networks. Retailers were given a grace period to implement these as the cost of ensuring the meters and systems could adequately manage the changes was substantial.
It was only from 1 January 2018 that the first customers really noticed these changes to their accounts.
What is happening with the latest Network Tariff Reform?
A move to demand capacity charges for small/medium consumers and ToU (Time of Use) network charges for large consumers not already on cost effective tariff pricing. You could be reassigned to a new cost-reflective tariff which may mean a rise in price. Some networks are however introducing transitional tariffs. This new tariff system did start in 2017 but many of the retailers have not been able to manage these new charges in their billing system and were given a ‘grace period’ until 1 July 2018. You can find the various changes in Queensland and New South Wales by following the links:
When negotiating and renewing electricity contracts, it is all about timing. Securing a contract when the market is low is the key. There is no need to wait until your contract expires and this is where Watt Utilities can help.
Electricity contracts are like the stock market – they have ups and downs and volatility in trading. Pricing changes due to many factors including season – summer or winter, natural disasters, heat waves, cold snaps and other government changes in policy or legislation.
In a volatile market when securing a contract, pricing can shift drastically from one week to the next. Using a specialist who observes the price fluctuations daily can save you thousands of dollars over the term of your renewals.
If you are a business customer or body corporate that spends more than $1300 per month (rule of thumb) on your electricity account, you may be eligible to negotiate a Contestable Market Contract and the savings could be quite significant. If you are already on a contract the time to act is now. We are seeing savings of 8% to 52% off the bottom line. This is when the market is in its low. How can the Contestable Market be low when the Tariff market is increasing? Simple answer, they are two different markets with different pricing rules. The Tariff Market is regulated pricing set by the competition authority in most states and they decide the increase in price. The Contestable Market customers negotiate their contracts at a time in the market when it has its highs or lows, like investing your money in the bank or creating a share portfolio.
So, what are your options if you spend a lot on electricity each month?
Do nothing and accept the increases but don’t complain later. If you are a smaller customer on a tariff check, make sure you are on the correct tariff and request a discount from your retailer for a contract term. Check your bill and if it is over $1300 a month engage a professional and reputable consultant to investigate if you are eligible for a Contestable Market Contract. If you are in a contract, look at forward dating this to lock in rates. Going from a tariff rate to a market contract is not a bad thing, and there are good savings to be made if executed correctly. Seek appropriate advice is essential as it is a big commitment and for Bodies Corporate the decision-making process must fit in with the good buying cycles. Going to a market contract you can make significant savings and minimise the increases you would otherwise pay if you remained on standard tariff pricing. This is because you can lock in peak and off-peak electricity prices under the contract, in which case the only increases are the regulated increases in the network and market charges. It is all about understanding the best month for your business to secure this contract.
Contact Watt Utilities today to discuss your options.
Do you want to reduce your carbon footprint, help the environment and save on your bottom line? Here are some ideas on how.
It is a misconception that it is expensive to go Green or seek alternative solutions to reduce your carbon footprint. Yes, there may be an initial upfront cost but look long-term at the return on investment and the ongoing benefits it will provide to your business. In many cases after payback your business will be in front not only on the bottom line, but also on social and environmental issues.
Consider the following option to help to go green.
Demand Side Management and Demand Reduction
Reducing and managing your electricity demand plays a significant role in going green. “The cheapest and cleanest energy is the energy you don’t use”. Taking this option not only has a positive impact on your bottom line it expands to wider economic impacts and has significant environmental benefits.
Demand reduction is key to developing a sustainable approach to the development of new power infrastructure. Our electricity supply is often taken for granted but has become a matter for concern. With our population growth, temperature shifts from heat waves to cold snaps and our general increase in demand for power, it will eventually reach the level where our demand for electricity is greater than supply.
The electricity network is based around supply and demand. Electricity generally cannot be stored so it must be produced based on the demand at the time. If the demand for electricity continues to increase and we hit capacity with current infrastructure, where do we fill the supply gap? A new power station takes eight years to build, and we don’t have enough renewable sources – how do we fill the increase in current demand? We have experienced this over-demand recently when extreme heat waves have been experienced in Victoria and South Australia causing turmoil in the network shutting down non-essential supply to cope with the demand. If we build more power stations to fuel this demand, the economic and environmental impacts may be significant.
There is a better answer though and that is DSM (Demand Side Management). This is the process of managing electrical load and managing peak demand, both in quantity and in timing of use. What it does is save money by reducing peak demand and the total consumption of electricity. Peak demand costs a business significantly depending on the tariff or contract. It also has impact on the electricity network providers, as explained above.
See what the AEMO says about Demand Side Participation in their 2018 Forecast Update.
How does a business manager, owner or operator play a part in reducing business demand for electricity? The best starting point is to undertake an energy audit. A business can then understand how and when power is used in their business or property. Education is the key.
Below are some of the ways to reduce demand and electricity consumption for business and in strata title communities.
reduce lighting operating times in car parks and stairwells through intelligent control incorporate efficient lighting including energy efficient globes, T8 – T5 converters or LED investigate more efficient hot water systems embrace renewable energy sources such as solar or wind establish minimum performance and monitoring standards for air conditioning and refrigeration stop running filters and non-essential items for swimming pools and spas in peak times, put a timing controller on the system to switch on in Off Peak. try using off-peak times for pumps and compressors To go Green and save money you can use some of the savings you generate from DSM initiatives to invest back into green power, benefiting the environment with no or minimal cost to your business.
Worth considering. Contact us at Watt Utilities to find out more and start your journey to energy efficiencies today.
The Australian Energy Regulator (AER) is an Australian Government Department which regulates electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. They set the amount of revenue that network businesses can recover from customers for using these networks. It is their job to enforce the laws of the National Electricity Market and spot gas markets in southern and eastern Australia. Competition is important in any industry but the AER ensure it is fair.
Protecting the interests of household and small business consumers is essential and the AER do this through the Retail Law. Although they monitor the industry, they do not set the prices consumers pay.
Energy is an essential service for Australian households and business and offers significant long-term success to the Australian economy. It is up to the AER to drive effective competition while equipping consumers with knowledge and choice for an equitable future.
Their role is:
Wholesale energy market regulation
Energy networks regulation
Retail energy market regulation
The AER regulates wholesale and retail energy markets, and energy networks, under national energy legislation and rules.
Did you know that as of 1 December 2017 ‘persons’ who hold a network exemption in relation to an embedded network must appoint or become an Embedded Network Manager in accordance with clause 2.5.1 (d1) of the National Electricity Rules.
Although many parties indicated their interest in seeking accreditation with the Australian Energy Market Operator (AEMO) to become an Embedded Network Manager, it has taken longer than anticipated for completed applications to be submitted, processed and approved.
To allow an opportunity for embedded network operators time to adjust to the new requirement to become or appoint an Embedded Network Manager, the AER allowed an initial transition period from 1 December 2017 to 31 March 2018.
During this transitional period, the AER is expected to be provided with evidence that parties attempted to secure an ENM or were engaging in the process of securing an ENM.
A list of current accredited Embedded Network Managers can now be found on the AEMO’s website.