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O.T Carbon Tax v's PV ecomonic? but for who

maxdacat

17-Aug-2011
10:22:44 AM

On 17/08/2011 Wendy wrote:
>Ah, the daily telegraph ... quality peer reviewed reading. Don't worry,
>i'm about to quote the Alternative Technology association, which i don't
>think was peer reviewed either.
>
>"At an equivalent cost of less than two cups of coffee per household per
>year, the scheme is extremely cheap and is not hurting Victorian electricity
>consumers."
>
Just because a renewable energy association says it costs the same as two cups of coffee I would not necessarily believe them.

Not sure where on the ATA's website you got that from but they have a "paper" which says the following:

"The gross metered solar feed-in tariff would be funded by an average increase in electricity costs of less than 1%; equivalent to a cup of coffee per year for a typical resident."

http://www.wind-works.org/FeedLaws/Australia/A%20proper%20solar%20FIT_Australia.pdf

This just seems to be a statement of wishful thinking without any analysis to back it up. How did they arrive at their answer? What is a "typical resident"? Are we talking short black or double mocha frappacino?

I am genuinely curious about the impact on power prices but it seems there is a dearth of information and thorough analysis out there. But take your point that capital costs are probably the major factor in price increases.


evanbb

17-Aug-2011
10:43:06 AM

I actually haven't bothered reading any of this, so forgive me if I go over old ground.

Feed-In-Tariffs are a direct subsidy by Government, the money comes straight out of their coffers and our taxes. 66c/kWh means $660/MWh, making it the most expensive form of generation I have ever heard of. In terms of raw generation per unit spent it is an appalling idea and seems to me designed as a direct bribe to voters to show they are 'doing something for the environment'. There may be additional benefits in having panels on roofs to show people they work, but, is that really worthwhile?

If you care about low-carbon electricity, just pay for Greenpower. Most people who install panels sell their future RECs, which means they are effectively using black power anyway.

I'm not convinced there is much of a demand lowering cost mechanism in Australia either; we're just too small. However, China has started a FIT of just 12c/kWh and (mostly due to their lower wages costs in installation) expect solar to reach grid-parity next year. This is the game changer.


ajfclark

17-Aug-2011
11:52:38 AM

The only Australian company which manufactures solar cells is closing the operation: http://www.abc.net.au/news/2011-08-17/sun-sets-on-australia27s-last-solar-factory/2842902


rodw

17-Aug-2011
12:29:21 PM

On 17/08/2011 evanbb wrote:

>Feed-In-Tariffs are a direct subsidy by Government, the money comes straight
>out of their coffers and our taxes. 66c/kWh means $660/MWh,

So if its a govt subsidy how does that then affect the Utilities bottom line?

In addition, they then on sell the green power at a higher rate, last I checked around 28c Kilowatt?, so they recoup that back...they also don't pay yearly upkeep on each system...and after 7years when all the contracts expire they will buy the power back at a lower rate that they sell for the rest of the life of the system, which is around 25 years. There will be no govt mandated buy back limit so I'm guessing that while electricity cost rise they will keep the feed in tariff the same...yeah they have to pay money upfront but they will get it all back then some.

My point is they keep claiming its the solar tariffs that is causing rises but is more caused by an aging system which they have constantly underfunded in updating over the years and it biting em on the arse with the feed in tariffs being the great scapegoat to hide there incompetence.


evanbb

17-Aug-2011
12:53:50 PM

On 17/08/2011 rodw wrote:
>So if its a govt subsidy how does that then affect the Utilities bottom
>line?
The Feed-In-Tarriff probably doesn't affect any utilities bottom line; Government pays producers directly for providing solar power, effectively becoming generators, and because of network rules other generation needs to back off to allow the renewables on.

>In addition, they then on sell the green power at a higher rate, last
>I checked around 28c Kilowatt?, so they recoup that back...they also don't
>pay yearly upkeep on each system...and after 7years when all the contracts
>expire they will buy the power back at a lower rate that they sell for
>the rest of the life of the system, which is around 25 years. There will
>be no govt mandated buy back limit so I'm guessing that while electricity
>cost rise they will keep the feed in tariff the same...yeah they have to
>pay money upfront but they will get it all back then some.

Government doesn't really on sell it; the PV electricity enters the grid and reduces generation from other suppliers. The pricing in the grid is heaps more complex than that too, so it is hard to say how much the electricity is worth. But, to the best of my knowledge, the Government makes nothing from the solar scheme, it is only a cost.

>My point is they keep claiming its the solar tariffs that is causing rises
>but is more caused by an aging system which they have constantly underfunded
>in updating over the years and it biting em on the arse with the feed in
>tariffs being the great scapegoat to hide there incompetence.

There was a report released by AEMO (Australian Energy Market Operator) late last year on the contributing factors to the rise in electricity prices. The Feed-In-Tariff doesn't count because the system never sees it; it is a straight transaction between Government and residents. However, the Mandatory Renewable Energy Scheme which makes retailers buy a certain amount of renewable electricity each year is driving up prices; around 16% from memory. But you are right, the lions share is coming from network upgrade costs, over 50% I think. That's not entirely because it is old, a large part of the problem is the increase in summer and winter peaks as residential usage increases. Higher peaks mean the network must be designed for a higher spike, even if it only achieves that for 4 hours a year. Air conditioners and heaters are the main reason the network needs upgrading.


rodw

17-Aug-2011
1:50:50 PM

AC and heaters have been slowly increasing numbers iover the years...the electricity companies ignored it so they could post profits and pay Govt big dividends.....only now that they have been caught out as its gotten to we have to act now and invest big....so they trying to blame someone else (ie solar panels) rather than there own mismanagement.

Wait until the carbon tax hits if you think Renewable Energy Scheme has driven up costs which will far and away eclipse it in terms of cost.


evanbb

17-Aug-2011
2:24:08 PM

On 17/08/2011 rodw wrote:
>Wait until the carbon tax hits if you think Renewable Energy Scheme has
>driven up costs which will far and away eclipse it in terms of cost.

That's probably not true, but whatever. The MRET requires retailers to buy renewable energy certificates to cover an amount of their energy purchase, which adds about $35 per MWh. The carbon tax starts at $23 a tonne, which will mean about an extra $18 per MWh extra. Hardly eclipsing.


rodw

17-Aug-2011
2:47:37 PM

But MRET isnt a 1 to 1 ratio of energy produced just a % isnt it (could be wrong)? were as the tax covers the whole lot?

lacto

17-Aug-2011
2:58:48 PM

My understanding is brown coal produces 1.3 tonne per Mwh , black coal 1 tonne and gas turbine .3 to.4 tonne which is more than $18 .
I have replaced or supplemented my storage electic hotwater heating with solar. A much better deal interms of carbon reduction but as power is offpeak the economics are not quite as good .
On the house we replaced a 600l electric storage which averaged about 10kwh a day or say 3500 kwh @ 10 cents including gst for a saving of $350. and carbon saving of $45 per year against an installed cost of $3500 plus the use of bottled gas to supplement on cold days .
In the dairy where huge amount of hot 90 to 95 degree water was needed 1200 to 1600l per day ,a solar 90 evacuated tube pre heater was put in which on average provided 25 degree of preheat a day saving 35 kwh a day or around 12000Kwh per year @ 9 cents (no gst)or $1080 and carbon of $350 a year . All up cost of $8000 plus my labour to install and no recs cashed .
Targetting electric hws is a far more effective carbon reducer

climberman

17-Aug-2011
3:11:33 PM

On 17/08/2011 evanbb wrote:
In terms of raw
>generation per unit spent it is an appalling idea and seems to me designed
>as a direct bribe to voters to show they are 'doing something for the environment'.

I can't believe you'd think this !


JamesMc

17-Aug-2011
10:19:43 PM

What really annoys me is the solar multiplier that was invented a couple of years ago to prop up the domestic solar panel installation industry.

This was a scam to multiply the value of renewable energy certificates. Effectively this means that if a householder puts PV on the roof they get to sell five one megawatt hour certificates for each megawatt hour of renewable energy they produce will produce. The reason was to make domestic PV more affordable. (Most never see the certificates - there installer takes them and discounts the cost of installation accordingly.)

As EvanB says, if you want to reduce carbon emissions you should just buy green power. The problem is this. Say I pay for four megawatt hours of renewable energy, and my retailer buys certificates from domestic PV, the retailer will only have to buy five certificates that came from one megawatt hour of renewable energy.

This means that for each megawatt hour of renewable energy produced by domestic PV, the total renewable energy is reduced by 5 - 1 = 4 megawatt hours. Domestic PV REDUCES the generation of renewable energy rather than increasing it.

JamesMc


Eduardo Slabofvic

17-Aug-2011
10:38:59 PM

You could always use less


JamesMc

18-Aug-2011
6:41:45 AM

On 17/08/2011 Eduardo Slabofvic. wrote:
>You could always use less

No. The more green power I pay for, the more that gets generated. It's like I get the opposite of a discount.

The more domestic PV that gets installed, the less green power gets generated.

JamesMc


Eduardo Slabofvic

18-Aug-2011
8:27:21 AM

I meant resources in general


evanbb

18-Aug-2011
8:47:09 AM

On 17/08/2011 JamesMc wrote:
Say I pay for four megawatt hours
>of renewable energy, and my retailer buys certificates from domestic PV,
>the retailer will only have to buy four certificates that came from one
>megawatt hour of renewable energy.

Nah James, they fixed that loophole.


evanbb

18-Aug-2011
8:49:29 AM

On 17/08/2011 lacto wrote:
>My understanding is brown coal produces 1.3 tonne per Mwh , black coal
>1 tonne and gas turbine .3 to.4 tonne which is more than $18 .
Your numbers are right, but I don;t understand your maths. Black gets down to .78 per MWh, but using 1/MWh it will add $23/MWh, which will be an increase of 50% or so on the cost of energy.


evanbb

18-Aug-2011
8:51:00 AM

On 18/08/2011 Eduardo Slabofvic. wrote:
>I meant resources in general

Why do you want us all to live in caves?

It's the hilarious thing about the carbon tax modelling; it assumes no change in behaviour. Smart people will be far better off under the new regime.


Eduardo Slabofvic

18-Aug-2011
10:24:30 AM

On 18/08/2011 evanbb wrote:
>
>Why do you want us all to live in caves?
>

Because you're a troglodyte. Its where you belong.

kieranl

18-Aug-2011
12:12:51 PM

On 18/08/2011 evanbb wrote:
>It's the hilarious thing about the carbon tax modelling; it assumes no
>change in behaviour. Smart people will be far better off under the new
>regime.
Change in behaviour is already happening:
http://www.abc.net.au/news/2011-08-15/power-consumption-makes-historic-drop/2839394/?site=sydney
No doubt this will result in rises in the price of power to the disadvantaged in the community who have limited ability to alter their consumption habits. If they're not getting ripped off by greedy capitalists installing PV cells they're hit by stingy middle-class homeowners.


JamesMc

19-Aug-2011
6:39:15 AM

On 18/08/2011 evanbb wrote:
>
>Nah James, they fixed that loophole.

DId they? How? Pleased to be corrected.

JameMc

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