Community groups dismayed as market rules lag behind modernising grid

Consumer groups have cried foul over the latest ruling by the main policy maker in Australia’s energy markets, describing it as yet another roadblock to a transition to a clean affordable grid, and the shift to locally generated solar, battery storage and shared energy.

The Australian Energy Markets Commission on Thursday announced it would reject a proposed rule change that would give credit to customers using less of the grid because they would share and store more of their locally generated electricity.

Proponents of local generation network credits (LGNCs), which gives value to generation produced locally, say the initiative would have saved $1 billion or more in avoided network costs.

The AEMC decision, if upheld, is likely to throw a big spanner in the works for community groups, councils, property developers and townships hoping to share energy that they generate on one their buildings. In effect, it protects the dominance of the energy incumbents.

Proponents of the rule change – which included numerous councils including Sydney, Byron Bay and others – were damning in their criticism of the AEMC and of the modelling it produced that claimed the new rule would add costs to consumers, not remove them.

Jay Rutovitz, from the Institute of Sustainable Futures, described the modelling and the decision as “laughable”, and distorted by a number of factors, such as the inclusion of existing systems, and by only including solar PV and no other technologies, and wrongly assuming that the proposed rule change would apply to small solar systems.

“I don’t really understand how they have not got that. I find it staggering,” she told RenewEconomy.

A co-sponsor of the rule change, Mark Byrne from the Total Environment Centre, was also damning, saying the ruling would likely cause prosumers to reduce their use of the grid, to look at private wires and microgrids, and potentially to disconnect.

Nicky Ison, a director of the Community Power Agency, says the rule-maker needs to get with the times.

“Our energy system is rapidly modernising but the rule makers are failing to catch up. The federal energy minister and his state and territory counterparts must now step in and fix this so it is cheaper and easier for communities and local business to keep building and using more renewable energy.”

© 2016 Solar Choice Pty Ltd

Giles Parkinson