Energy costs are going down, but you wouldn’t know it if you’re still on the traditional grid.

confused man and pylons

Huh? Energy Prices Are Going Down?

How much of that quarterly cheque you cut to your local electricity supplier is actually paying for the energy you use?  According to a new scathing news story from ABC and confirmed with data from the Federal Treasury, under half.  Surprisingly, 51% of your monthly payment is, in fact, going to fund the unnecessary rebuilding of a now bloated Australian power grid.  

A major public relations push from giant network energy companies in the mid 2000’s had the Australian government believing that a massive influx of new demand for energy would occur by the turn of the decade.  This demand would, according to the energy company lobbyists and executives, render the current power grid incapable of sufficiently providing energy to the public.

As a result, 45 billion dollars worth of improvements to the grid were approved by government regulators.  Private contracts, including a clause for a ten percent return on investment from the network companies (if you’re doing the maths, that’s nearly half a billion dollars of profit), were drawn up and the colossal upgrade projects began.  But what happened in 2009 shocked everyone.  Including the energy companies.  Demand for energy actually went down. The highly-touted scare of an insufficient energy grid turned out to be a snipe hunt.  Even when it became abundantly clear that demand for energy was going down, the corporate PR machine was firing on all pistons to make the governing body and the people believe that the upgrades were absolutely necessary.

The problem?  They absolutely were not.

When they finally realized the massive waste, it was too late.  The work was already in process and the contracts were already signed.  The grid-using public was left powerless to protest.  And now the grid-using public is paying for it…with a half a billion dollars worth of interest.

That cheque you write quarterly?  A big chunk of it is going to useless poles and wires strung up in a giant tangled mess all across the country.  And, perhaps more infuriating, ten percent of that monthly payment is going straight to the pockets of companies that sold the country on a phantom energy grid crunch.

The Australian public pays some of the highest energy costs in the world.  And now we know why.

But there’s a very large thorn in the side of the behemoth energy corporations that’s wreaking havoc on the traditional power grid system.  An unintended consequence of the exorbitant energy prices tacked on to the public’s bill is something the network companies are now railing against; throwing their money (actually, the public’s ill-gotten money) at in bushels to try to suppress.  That thorn in the side?  Solar Power.

As traditional power became more and more expensive, Australian consumers began to turn to solar panels to alleviate the ever-growing hole in their pocket book.  In fact, there are now 1.2 million households that get their power from their own roofs.  Solar energy has empowered these families to not only take control of their energy production, but to actually sell the excess power they generate back to the grid.  Talk about a massive spanner in the works of the energy monoliths.  Their dishonest profit-gouging has done exactly the opposite of what they’d hoped it would do.  It’s pulled back the curtain and shown the public the better option.

The big secret?  Not only is solar power cheaper and more efficient but it’s also environmentally friendly and socially ethical.  With a country that receives as much daylight as Australia, it’s really a no-brainer.  Peak daylight production hours for solar energy also happens to fall at the exact same time as peak usage hours.  During the sweltering days when most Australian families are turning on their air-conditioners, solar panels are pumping excess energy back into the grid.  This ultimately reduces the value of the power generated by the coal-firing energy plays.  In fact, in the last few years alone, a number of coal-fired energy plants have been shut down completely as they are no longer needed to sustain the country’s energy use.  Why?  Because natural and renewable sources of energy like solar are sustaining the country’s demand.

The Energy Supply Association of Australia which speaks on behalf of the traditional energy industry is now heavily lobbying the government to reduce the  Renewable Energy Target, or RET, which is a renewable energy standard the country has been vying to hit for years.  Why?  Because that target is hitting these corporations in the pocket book as solar power and processes like it are becoming more and more viable.  The same companies that scared the public in to investing billions of useless dollars in to an unnecessary grid upgrade, and thereby profiting exponentially, is now complaining that they’re not profiting enough post-grid upgrade.

Yes.  You read that right.

Energy production is being decentralized, the price is going down, and the ones who stand to lose the most money are the same companies that gouged the public to begin with.

What’s that they always say about karma?

About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division.

Comments

  1. Hi Finn
    Some interesting points in your article re Energy cost are reducing.
    An important point overlooked that is that one of the major factors that is helping to inflate energy prices are the unrealistic feed in tariffs that were offered and taken up by those savvy consumers that had the financial wherewithal to install a PV solution.
    In NSW alone the rebate to consumers has well and truly exceeded 1 billion dollars annually !!!
    Those households that do not have a PV solution for what ever reason are directly subsidising those who do. Not a very equitable solution by any standards.
    I’m an engineer and a great supporter of renewable energy. Unfortunately most consumers of electricity are hostage to “political” outcomes that are poorly thought out and end up with very substandard outcomes.
    Personally I really lament the lack of balance within many discussions and debates these days.
    The polarisation of thought driven by an almost hysterical media in no way helps or assists healthy debate and therefore a balanced well supported outcome for the good of all.
    Climate science a good case in point. Very little rational debate, hijacked by politicians and perpetuated by a sycophantic media totally unable to provide balanced point of view.

    My rant aside, Finn, I enjoyed the depth of information within your website I’m sure it is of great use to those that are contemplating a PV solution. You have created a useful one stop reference point.

    Regards
    Colin Berneville-Claye

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