Thread: Future of the Australian Electricity Market

At a time when the cost of electricity is rising by 20% or so (in NSW), I am intrigued by a conversation I had with a PV installer just a couple of weeks ago.

In addition to designing and installing PV, he is/was also involved with teaching PV and "eco energy" stuff to TAFE and high school students. He told me about a time he took a bunch of students on a tour of a local wind farm, and on an amply windy day the students noted that many of the turbines weren't generating any significant power. Whilst in the control room, one of the students asked a worker why this was the case. The worker answered that the price of power was low, so they had reduced their output "until the price goes back up". The student was bright enough to realise that given the wind is "free", this was a case of deliberately creating (or helping to create) a shortage in order to drive prices up. Apparently the faces of the students, many of whom were very keen on "saving the planet", dropped on the spot, and he could almost hear their beliefs in the publicised drivers for "green energy" come crashing down......

Originally Posted by Warb

At a time when the cost of electricity is rising by 20% or so (in NSW), I am intrigued by a conversation I had with a PV installer just a couple of weeks ago.

Speaking of electricity prices going up, I just snipped this little table out of the notification I just received in an Email from my provider:

power increase.png

That's as close to a 50% increase that it makes little difference. Then there will be gas increase on top of that.

Doug

The wholesale price of electricity has increased a lot. I just looked up the average price for the year so far and it translates to 11.5 cents per KWhr. That is for QLD, but the other states will be in a similar ballpark. I am not surprised electricity bills are destined to increase. I am led to believe that some are even worse than your 50%. However, none of that makes the increase any easier to bear.

Those of us that have solar panels on the roof will be wondering why we are only getting paid miniscule amounts for feeding surplus power into the grid. I am not in that position so I don't know the figures, but I hear stories of 5c and less. Perhaps somebody can verify that for me.

If that is the case, it is probably time to consider a storage battery to supplement the solar panels. Put all the surplus power into the battery and use that at night. Night time wholesale prices, because they include both the morning and evening peaks, probably average 15c to 20c. By the time the power gets to the consumer the KWhr rate could be 40c. I don't know exactly what these prices are as I am only outlining a principle. I am pointing out that the nature of power generation has turned completely on its electrical head. Go back a few years and power was cheap at nightand expensive during the day. In the current climate it is the complete opposite.

Regards
Paul

Originally Posted by Bushmiller

The wholesale price of electricity has increased a lot. I just looked up the average price for the year so far and it translates to 11.5 cents per KWhr. That is for QLD, but the other states will be in a similar ballpark. I am not surprised electricity bills are destined to increase. I am led to believe that some are even worse than your 50%. However, none of that makes the increase any easier to bear.

Those of us that have solar panels on the roof will be wondering why we are only getting paid miniscule amounts for feeding surplus power into the grid. I am not in that position so I don't know the figures, but I hear stories of 5c and less. Perhaps somebody can verify that for me.

If that is the case, it is probably time to consider a storage battery to supplement the solar panels. Put all the surplus power into the battery and use that at night. Night time wholesale prices, because they include both the morning and evening peaks, probably average 15c to 20c. By the time the power gets to the consumer the KWhr rate could be 40c. I don't know exactly what these prices are as I am only outlining a principle. I am pointing out that the nature of power generation has turned completely on its electrical head. Go back a few years and power was cheap at nightand expensive during the day. In the current climate it is the complete opposite.

The wholesale price of electricity has indeed increased, but if my PV installers story is true (and I have no reason to doubt him) then this is at least partially down to manipulation of supply and demand. It is my understanding that coal fired power stations are unable to rapidly vary their outputs, which is why in the old environment we had coal fired "base load" generation, with gas fired generators able to quickly ramp up and down to service shortfalls or oversupply. If the new generators, solar and wind, can switch on and off at will, and without cost to themselves (no wasted fuel!) then surely we must expect them (if un-monitored and unregulated) to deliberately create shortfalls in order to increase the price? Their profit will be higher if they ensure that prices are high!!

PV feed in payment for domestic systems is indeed very low. Before I retired last year, my farm had about 40kW of solar to run irrigation pumps, but which fed the grid when the pumps were off (most of the time for the last few years!). We got 6c/kWh, much of which the power companies clawed back through huge rises in the daily charge.

My new property has 5kW of grid interactive PV, and I'm adding a further 20kW on my new shed. Sadly it has only a tiny single phase transformer, so I'm limited to a 4kW feed to the grid. As a result, I'm also installing a 9.6kWh battery. I very much doubt that the feed-in tariff will cover the daily charge, but the system should hopefully provide the majority of my power, though not the induction cooktop in the winter!

Batteries present a bit of a conundrum for those of us who have a limited time in their home because of age and won't see the investment in batteries pay off and they are the people who really need them to lower the electricity costs. The other factor for the retirees is that they are home during the day and use more electricity warming and cooling their homes.

Originally Posted by Chris Parks

Batteries present a bit of a conundrum for those of us who have a limited time in their home because of age and won't see the investment in batteries pay off and they are the people who really need them to lower the electricity costs. The other factor for the retirees is that they are home during the day and use more electricity warming and cooling their homes.

I'm not sure, given the cost of batteries, that they will pay off their investment for anyone. A (admittedly somewhat biased) study in the US suggested that the pay-off time for a Tesla battery was somewhere near 40 years, and Tesla only warranty their Powerwall 2 batteries (70% of initial rating) for 10 years. Tesla argued with the study, but if I remember correctly they could still only get the payoff time down to 20 something years... if the battery lasts that long!

In any case, the power companies are trying to recoup their "losses" to domestic PV by hiking up the daily charges. A while back there was a call to specifically increase the daily charge to those with PV, and whilst I believe that call was dropped it is only a matter of time, I suspect! The daily charge for everyone is increasing constantly, although apart from an enormous growth in "fat" (it now takes 6 vehicles, 12 men and several visits to achieve what two guys in a ute took 10 minutes to do 15 years ago) I can't really see why.....

Originally Posted by Warb

My new property has 5kW of grid interactive PV, and I'm adding a further 20kW on my new shed. Sadly it has only a tiny single phase transformer, so I'm limited to a 4kW feed to the grid. As a result, I'm also installing a 9.6kWh battery. I very much doubt that the feed-in tariff will cover the daily charge, but the system should hopefully provide the majority of my power, though not the induction cooktop in the winter!

its not the feed in tariff that should save you money... its the fact you shouldn't have an electricity bill at all.

if you take doug3030's example above
if you can wipe off a $2000 electricity bill a year and a battery + panel setup is something like $15000, that's 7 years for it to pay off (assuming power prices don't increase in that time again which means its even cheap) and the rest is cream.

Originally Posted by havabeer69

its not the feed in tariff that should save you money... its the fact you shouldn't have an electricity bill at all.

Sadly that isn't the case. The standing charge is about $2 per day, so at 5c/kWh for solar feed-in you need to feed in 40kWh just to cover the daily charge. With a feed in limit of 4kW, that's 10 hours of 4kW each and every day, which may be "easy" on a bright summer day, but not so much in the winter. The PV enthusiasts (and don't get me wrong, I'm one of them) will tell you that even in winter the PV system generates lots of power. That's true, except that most of that power is around mid-day, which doesn't help if you need 10 hours! The drop off in production caused by shortened hours of daylight is very real, and "lots at lunchtime" is no help if you can only feed 4kW. Equally, even for self-consumption, having lots of power at lunchtime doesn't help cook the dinner when it goes dark!

So you get a battery. At this point the cost of the installation goes up massively. A Powerwall (no panels or inverter) costs over $15k installed (estimates vary up to $17k). That allows you to shunt power to later in the day when the light starts to fade, but with limitations. Apart from the obvious (13kWh limit), the maximum continuous output is 5kW. Having ditched the gas hob, you realise that an induction hob uses 2 to 4kW per ring/zone. So when you boil a pan of water for pasta and fry some onions for sauce, the battery can't keep up and you're using power from the grid. Then put the kettle on (2kW?) and your meter is spinning wildly. Your limited 4kW feed-in is hardly covering the daily charge, so your bill is now increasing further. You still haven't any heating, or general "through the night" usage. The result is that in winter you still will have a bill, possibly quite substantial, unless you have sufficient panels and batteries to cover 100% of your usage and also guarantee that 10 hours of 4kW feed to cover your daily charge (which is absolutely certain to increase with time!).

Now of course this doesn't apply to everyone. My previous property had two large 3 phase transformers, one with a 10kw (the standard at the time) feed in limit, and the other with quite possibly no limit at all (the transformer was huge, and I was the only connection). We could feed so much during the day that all our charges (usage and standing) were covered. But not anymore, without a vast array and several batteries.

The fact is that you need to do a lot of homework to make sure you know what you will get! I have people local to me who were told "you won't have a bill" and in fact their bill is not that much less than before installing PV, entirely due to usage patterns and low feed-in tariffs. And that's before rainy days like today when the panels do nothing......

doesn't the inverter use the solar first and export the rest?

so if you have a 20Kw system, and you're using 15Kw during the day doing the laundry etc etc, aren't you only exporting 5Kw? so you only earn feed tariff in on the 5Kw but you're not drawing in any power off the grid because its being provided by the first 15Kw from your panels? so your net bill is 0kw + 5kw of export?

Originally Posted by Warb

I'm not sure, given the cost of batteries, that they will pay off their investment for anyone. .....

Correct. I have dual qualifications in economics and accountancy and a lot of experience doing fairly sophisticated cost-benefit analyses.

Two friends installed Tesla Powerwalls last calendar year and I reviewed their cost effectiveness early this year, based on the following parameters:

• Installed costs of Powerwall - $13,200 and $13,400.
• Storage capacity - 13.1 kWh (as per warranty).
• Capacity after 10 years - 9.2 kWh (70%).
• Electricity cost - 26 cents per kWh.
• Zero maintenance costs and zero downtime.

Very Rosy Glasses - Pay back period = 15 years. Assumes that the solar panels charge the batteries to 100% each and every day and that you use 100% of that power each and every night. Totally unrealistic - cloudy days, days when you do not use the aircon, etc, and when you are away on holidays.

Rosy Glasses - PBP = 20 years. Assume that the solar averages an 80% charge each day and that you use 80% of of available capacity on average each day. [A little less unrealistic]

Realistic - PBP = 30 years. Allows uniform depreciation in capacity to 70% after 10 years and continuing decline.

Real World - PBP = 40 years. Includes cost of finance. The opportunity cost of the money invested in the Powerwall - it could have been invested elsewhere.

Solar Costs - The study assumed that the cost of solar electricity was zero - totally unrealistic as there are capital costs and maintenance costs.

Electricity Price Rises - The study was done without considering future electricity price rises. If the price doubles from 26 cents used to 52 cents per kWh then the above PBP's would be effectively halved. In my real world scenario the PBP would be 20 years. Will a powerwall or me last 20 years? How many batteries are 20 years old?

Going Off Grid - I am a low electricity user averaging 11 kWh per day, but I suspect that I use 20 kWh on a high use day. Clearly the 13.1 kWh capacity is insufficient for me for one day - two needed. But we might have prolonged cloudy days so I would need more capacity - six Powerwalls for three days capacity? One of my friends above averages 21 kWh per day. If he has high use days around 40 kWh does he need 10 or 12 powerwalls? We really did not have adequate data to address those ussues, except we could see $$$$$'s.

Here is some data to show why batteries will not be charged from my 7.5kw system during two less than ideal days during winter. This same system outputs between 42kw & 45kw on a good summer day. I doubt many houses in suburbia would have any more than 10kw on the roof and most are smaller than mine being 6.5kw as a rule. Our FIT is 6 cents and there is no way I would put more panels on the roof (which I can't) to export for them to sell it back to me during the night at 30 cents+ and I would have to put a lot on to power batteries anyway.

If you enlarge the shot and then double click on it you will see the data panel on its own without the edge motif on the right. Somehow my second monitor gets included in a screen grab for some reason.

Today so far
Power Data Today 04 07.jpg

Yesterday

Power Data Yesterday 03 07.jpg

Originally Posted by havabeer69

doesn't the inverter use the solar first and export the rest?

Yes

Originally Posted by havabeer69

so if you have a 20Kw system, and you're using 15Kw during the day doing the laundry etc etc, aren't you only exporting 5Kw? so you only earn feed tariff in on the 5Kw but you're not drawing in any power off the grid because its being provided by the first 15Kw from your panels?

Yes, sort of.

Originally Posted by havabeer69

so your net bill is 0kw + 5kw of export?

No

1/ Forgive me if you know this. A kW is a unit of power, but describe the rate of energy flow. A kWh is a unit of power that has been used, so 1 kW for 1 hour is 1kWh. For a PV system to supply all your power it must be able to produce the same amount of power (kW) as you are using at any and all times. Any shortfall is drawn from the grid. The shortfall that was drawn from the grid cannot be directly "made up" by PV, only by selling enough power (feed-in) to pay the purchase price of that power drawn from the grid....... and they charge 6 or more times what they pay you! So when the sun goes behind a cloud you pay 500% interest on the power they "loan" to you, even if that "loan" only lasts a minute.

2/ PV Panels are specified for an output under a given amount of sunlight (energy) hitting them. In Australia, on a good day in summer at mid-day (from a solar point of view), we have more than the specified amount of sunlight. But that only lasts for a limited time either side of mid-day. Before and after that, there is a curve of increasing light through the morning and then decreasing through the afternoon. So 20kW of panels will produce nothing before sunrise, then increase to potentially more than 20kW at mid-day, then decrease back to nothing at sunset. To make things worse, domestic panels tend to be fixed, rather than on frames that "follow the sun". This means that they are either stuck on the roof at whatever angle and direction that happens to be facing, or adjusted to give a "best average throughout the year" result. They then gather dust, and often their output decays far quicker than the manufacturers would like us to believe. This means that the 20kW of panels, through the days and years, will only occasionally actually output 20kW. Because panels are "cheap", the solution is to install an inverter of, say, 10kW, and connect it to, say, 14kW of panels. The inverter limits the output at "best sunlight" times to 10kW, but at other times the under-performing panels can still yield 40% more than 10kW of panels. So output varies, and if you put your tumble dryer on at the wrong time, or get some clouds, then you're using power from the grid. So you have a bill.

3/ You still have a standing charge, which means you have to generate enough surplus to cover it, or you get a bill. How difficult this is depends on many things, but if (like me) the electricity company limits the amount of power you can feed in, it can become impossible even with a large PV system. So you have a bill.

4/ Without a battery, you can only use your "free" solar power when the sun is shining. As described in 2/ above, this means that in the early morning and the evening, or from mid-afternoon in winter, you struggle to produce significant power. Heating, cooking, watching TV etc. are all frequently done in those "low/no solar" times of the day. So you have a bill. Now if you have a big PV system that can export large amounts of power through the day, you'd think that would offset the grid usage. But remember that you get paid 5c for each kWh you supply to the grid, but they charge you 30c (or whatever) to buy it back - so you have to "sell" 6 times as much as you buy just to break even. So every dull day, or cloud in front of the sun, puts you further behind. And you have a bill.

5/ There are limit on how much power you can feed to the grid. For most people it used to be 10kW. For people on small transformers or long rural lines (like me!) it may be as low as 4kW. Apparently they do sometimes simply not allow any feed-in. Trying to sell 6 times as much as you use, when limited to 4kW feed-in, is very hard!

Originally Posted by Warb

Yes



Yes, sort of.




No

1/ Forgive me if you know this. A kW is a unit of power, but describe the rate of energy flow. A kWh is a unit of power that has been used, so 1 kW for 1 hour is 1kWh. For a PV system to supply all your power it must be able to produce the same amount of power (kW) as you are using at any and all times. Any shortfall is drawn from the grid. The shortfall that was drawn from the grid cannot be directly "made up" by PV, only by selling enough power (feed-in) to pay the purchase price of that power drawn from the grid....... and they charge 6 or more times what they pay you! So when the sun goes behind a cloud you pay 500% interest on the power they "loan" to you, even if that "loan" only lasts a minute.

2/ PV Panels are specified for an output under a given amount of sunlight (energy) hitting them. In Australia, on a good day in summer at mid-day (from a solar point of view), we have more than the specified amount of sunlight. But that only lasts for a limited time either side of mid-day. Before and after that, there is a curve of increasing light through the morning and then decreasing through the afternoon. So 20kW of panels will produce nothing before sunrise, then increase to potentially more than 20kW at mid-day, then decrease back to nothing at sunset. To make things worse, domestic panels tend to be fixed, rather than on frames that "follow the sun". This means that they are either stuck on the roof at whatever angle and direction that happens to be facing, or adjusted to give a "best average throughout the year" result. They then gather dust, and often their output decays far quicker than the manufacturers would like us to believe. This means that the 20kW of panels, through the days and years, will only occasionally actually output 20kW. Because panels are "cheap", the solution is to install an inverter of, say, 10kW, and connect it to, say, 14kW of panels. The inverter limits the output at "best sunlight" times to 10kW, but at other times the under-performing panels can still yield 40% more than 10kW of panels. So output varies, and if you put your tumble dryer on at the wrong time, or get some clouds, then you're using power from the grid. So you have a bill.

3/ You still have a standing charge, which means you have to generate enough surplus to cover it, or you get a bill. How difficult this is depends on many things, but if (like me) the electricity company limits the amount of power you can feed in, it can become impossible even with a large PV system. So you have a bill.

4/ Without a battery, you can only use your "free" solar power when the sun is shining. As described in 2/ above, this means that in the early morning and the evening, or from mid-afternoon in winter, you struggle to produce significant power. Heating, cooking, watching TV etc. are all frequently done in those "low/no solar" times of the day. So you have a bill. Now if you have a big PV system that can export large amounts of power through the day, you'd think that would offset the grid usage. But remember that you get paid 5c for each kWh you supply to the grid, but they charge you 30c (or whatever) to buy it back - so you have to "sell" 6 times as much as you buy just to break even. So every dull day, or cloud in front of the sun, puts you further behind. And you have a bill.

5/ There are limit on how much power you can feed to the grid. For most people it used to be 10kW. For people on small transformers or long rural lines (like me!) it may be as low as 4kW. Apparently they do sometimes simply not allow any feed-in. Trying to sell 6 times as much as you use, when limited to 4kW feed-in, is very hard!

Yep, what he said. Why would I want to spend money so the electricity grid can sell it back to me at stupid prices. What I think should happen and I know this is dreamland stuff is that there should be a community battery which relies on local solar and only buys from the grid as needed. The local solar generation is kept "in house" at an agreed price until it becomes necessary to buy from the grid. My town would be a prime example of where this sort of scheme would work. How pricing would work I would have no idea but I suspect a smart meter could be utilised.

The scheme in this link won't fly during winter because the communities are shaded for the greater part of the day by the local escarpment Electrify 2515 plan to adopt renewable energy, EV car lease in Illawarra suburb - ABC News

Originally Posted by Warb

1/ Forgive me if you know this. A kW is a unit of power, but describe the rate of energy flow. A kWh is a unit of power that has been used, so 1 kW for 1 hour is 1kWh. For a PV system to supply all your power it must be able to produce the same amount of power (kW) as you are using at any and all times. Any shortfall is drawn from the grid. The shortfall that was drawn from the grid cannot be directly "made up" by PV, only by selling enough power (feed-in) to pay the purchase price of that power drawn from the grid....... and they charge 6 or more times what they pay you! So when the sun goes behind a cloud you pay 500% interest on the power they "loan" to you, even if that "loan" only lasts a minute.

2/ PV Panels are specified for an output under a given amount of sunlight (energy) hitting them. In Australia, on a good day in summer at mid-day (from a solar point of view), we have more than the specified amount of sunlight. But that only lasts for a limited time either side of mid-day. Before and after that, there is a curve of increasing light through the morning and then decreasing through the afternoon. So 20kW of panels will produce nothing before sunrise, then increase to potentially more than 20kW at mid-day, then decrease back to nothing at sunset. To make things worse, domestic panels tend to be fixed, rather than on frames that "follow the sun". This means that they are either stuck on the roof at whatever angle and direction that happens to be facing, or adjusted to give a "best average throughout the year" result. They then gather dust, and often their output decays far quicker than the manufacturers would like us to believe. This means that the 20kW of panels, through the days and years, will only occasionally actually output 20kW. Because panels are "cheap", the solution is to install an inverter of, say, 10kW, and connect it to, say, 14kW of panels. The inverter limits the output at "best sunlight" times to 10kW, but at other times the under-performing panels can still yield 40% more than 10kW of panels. So output varies, and if you put your tumble dryer on at the wrong time, or get some clouds, then you're using power from the grid. So you have a bill.

3/ You still have a standing charge, which means you have to generate enough surplus to cover it, or you get a bill. How difficult this is depends on many things, but if (like me) the electricity company limits the amount of power you can feed in, it can become impossible even with a large PV system. So you have a bill.

4/ Without a battery, you can only use your "free" solar power when the sun is shining. As described in 2/ above, this means that in the early morning and the evening, or from mid-afternoon in winter, you struggle to produce significant power. Heating, cooking, watching TV etc. are all frequently done in those "low/no solar" times of the day. So you have a bill. Now if you have a big PV system that can export large amounts of power through the day, you'd think that would offset the grid usage. But remember that you get paid 5c for each kWh you supply to the grid, but they charge you 30c (or whatever) to buy it back - so you have to "sell" 6 times as much as you buy just to break even. So every dull day, or cloud in front of the sun, puts you further behind. And you have a bill.

5/ There are limit on how much power you can feed to the grid. For most people it used to be 10kW. For people on small transformers or long rural lines (like me!) it may be as low as 4kW. Apparently they do sometimes simply not allow any feed-in. Trying to sell 6 times as much as you use, when limited to 4kW feed-in, is very hard!

all good, did know a decent chunk of what you're saying. didn't really stop to think that you'd need to be making at least $1 a day worth of solar to cover your supply charge, which as you said comes down to your usage habbits and how much you can export.