Free power sounds like a giveaway. It isn’t. It’s meant to encourage people to use more electricity during the hours when solar power flows into the grid. The real aim is to get people to shift the use of water heaters, pool pumps, air-conditioning and electric vehicle charging to the middle of the day. At other times, power prices will be slightly more expensive.
The main challenge for Australia’s power systems is no longer how to meet peak demand in the evening. We now have to use or manage the floods of very cheap solar during the sunniest hours when there’s more supply than demand. If this imbalance isn’t managed, electricity voltage and frequency can move outside safe limits, equipment can trip, and the risk of outages rises.
The scheme makes sense. But there are still questions about its fairness. Electrified households will benefit most, while renters and other groups may benefit less.
The challenge of solar abundance
About one in three Australian homes now has solar. At times, this power source can supply 50% of total demand on Australia’s biggest power grid, the National Energy Market. Wholesale prices have regularly gone negative in recent quarters.
In big solar states such as South Australia, solar can supply more power than the state can use. Surplus power is exported, stored in batteries or curtailed – wasted.
The Solar Sharer Offer is meant to make better use of these floods of solar power.
This financial year, the three hours of free power will be 11am to 2pm daily in NSW and southeast Queensland and 12 to 3pm in South Australia. Australia’s energy regulator chose these times to match when solar output is highest, and network and wholesale costs are lowest. This may change year by year.
The reason the scheme isn’t national is because it’s tied to the Default Market Offer — a regulated safety net plan for electricity customers – which only applies in NSW, SA and southeast Queensland.
Who will benefit most?
Ensuring fair access has been a constant challenge for household clean-energy schemes. People who own their homes and have access to capital are usually better placed to benefit. This scheme has the same issue.
It’s easy to picture the ideal customer for three hours of free power – a homeowner with a smart meter, flexible hot water, electric vehicle, home battery and the ability to choose when power-hungry appliances run.
That’s great for them. But what about everyone else? For instance, you have to have a smart meter to be eligible. Only about 60% of households have one.
The harder question is whether this offer is fair for other households.
Renters, apartment residents and people on embedded networks in retirement villages, caravan parks or shopping centres face another barrier. If they opt in without being able to make good use of the free power, they could actually be worse off due to the higher prices at other times. These concerns were raised during the consultation process.
Authors: Saman Gorji, Associate Professor, Renewable Energy and Electrical Engineering, Deakin University; Alireza Ganjovi, Researcher, Energy Systems and Applied Physics, Deakin University
This article was initially published in The Conversation and is republished here under a Creative Commons Licence.
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