Victoria town’s breakthrough deal on network tariffs as it pursues 100% renewables

The regional Victorian town of Newstead has negotiated new network charges with electricity distributor, Powercor, to to help clear the way to building a small solar farm and sharing the output with the community.

The ground-breaking deal puts in place a two-year trial on new network fees that allows the community to install solar and share the output without added network charges for each kilowatt they consume.

It also appears to break the nexus between lower energy use and soaring grid charges, and will help ensure the benefits of a shift to renewables are spread evenly throughout the community, and not limited to those who can afford it.

The deal comes as Newstead, a town of just 1500 people in Central Victoria, works its way towards a target of 100 per cent renewable energy as early as 2020.

The Powercor tariffs – specially constructed for the people of Newstead, but with a broader energy market transition in mind – introduce a fixed daily network charge of $1 day, and a monthly “demand” charge of $2/kW. It completely removes fees based on kilowatt-hour consumption.
Tosh Szatow, from energy consultants Energy for the People, which has been advising the Newstead community group, Renewables Newstead, says the new tariffs will have two significant benefits.

The first is to make community-owned solar farms, and solar sharing, more attractive, by eliminating the perverse incentive for individuals to preference rooftop solar over a shared solar farm, despite the latter option having a lower $/kW installed cost.

The second is that the presence of fixed charges, and the elimination of usage charges, will encourage people to “fuel switch” from bottled gas and wood to a grid which the local community hopes will be 100% renewables within a few years.

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Giles Parkinson