By Darryn Van Hout
Let’s be honest, the cost of electricity has made a huge contribution
to the high cost of living and the difficulties Australian families
experience in balancing their family budgets. According to a survey
carried out by Ernst & Young in October 2014, a third of all
Australians missed a payment for their electricity usage in the last 12
months.
The fact of the matter is that Australians are hurting and power
bills should no longer be a political opportunity for politicians to win
votes but a serious concern necessitating realistically lasting
solutions. In essence, not even the compensation for households that are
least able to afford the rising power prices can have a long-term
impact.
In the past five years, electricity prices have skyrocketed by as
much as 40 per cent in some states of Australia. When you compare these
statistics with other countries like Canada, the United States, the
European Union, and Japan, Australian electricity bills are way too high
as reported by the Energy Users Association of Australia (EUAA),
something the Federal Government blatantly acknowledged but has failed
to address.
Electricity prices in Australia.
The significantly high power prices are generally considered to be
fueled by three key factors: deregulation, infrastructure costs/network
charges, and introduction of the carbon tax. Despite government efforts
to mitigate the high cost of living pressures, electricity bills keep
increasing. The good news is that the most sustainable solution to
lowering power bills in Australia ultimately lies on the 1.3 million
Australian household rooftops. One of Australia’s leading consumer care
websites, Australian Solar Quotes*,
reports that despite the withdrawal of political support, the uptake of
rooftop solar panels is continuing to rise, even in the current
economic climate. Is the trend a result of Australia’s earlier solar
boom or do the good folks of Australia have little choice but to resort
to solar power as an alternative?
According to the Australian Bureau of Statistics, one in five Australian households uses solar energy
to power their electrical appliances. Even though the cost savings for
investment in solar power are clear, this figure is still surprisingly
low considering that the installation of a solar power system is a sure
way to reduce a householder’s dependence on the grid with a zero power
bill as a real possibility with the latest technological advances.
As mentioned, there are three main factors that result in high
electricity prices in Australia. The first is network charges, which in
fact account for up to 51% of the total cost of electricity. Next is the
cost of transporting the high-priced, premium electricity across poles
and wires. Lastly, let’s not forget the subsidies paid by Australians to
support renewable energy also contribute to the high power costs. The
introduction of the now scrapped carbon tax also had a significant
impact on power prices, coming in at 9%.
Fierce competition among energy suppliers forms a vital part of the
answer. Many of these companies are global, operating in export markets,
and if their electricity prices are forced up, the consequences would
be far reaching in terms of loss of jobs, investment, etc.
The federal government acknowledges that power bills are likely to
keep rising due to the huge investments needed to maintain network
infrastructure. This means that ever-rising electricity prices will
still hurt Australian households and impact negatively on businesses.
How Solar Storage Next-Gen Technology is Revolutionizing the Energy Market
As the debate about the factors driving up power prices wages on,
renewable energy product manufacturers are busy developing new
technologies to drive down electricity prices. With the emergence of
innovative solar energy solutions such as lithium-ion batteries, solar
storage batteries are poised to dramatically reshape the energy industry
in Australia.
A study commissioned by UBS, a world-leading investment bank, reveals
that solar plus storage is an economically sustainable and low-risk
solution for Australian households. For instance, if one million
Australian households invest $20 billion in solar storage systems today,
this would translate to enough capital for setting up a new LNG export
plant.
The emergence of cost-competitive solar storage batteries such as Tesla’s new storage battery
is a real revolution for the Australian electricity industry. This
advanced battery storage system is poised to have a great impact on
utilities, depending upon on how they react. If they embrace it as an
opportunity to reduce high power prices, they can provide zero-down
solar and battery storage installations to their consumers, thus pushing
down costs for Australian households. On the other hand, they can view
it as a threat and actively oppose this being launched in the Australian
market.
The Tesla Powerwall has the potential to make a huge impact in the
global energy industry and is indeed a timely innovation. The
lithium-ion battery is one-of-a-kind. It’s designed to enable
rechargeable energy storage at residential levels that can be used for
load shifting, backing up power for use during an outage, and enabling
self-consumption at peak times.
The solar storage battery by Tesla is a step forward for the
Australian energy market. As the storage battery is a cheaper (inclusive
of the foreign exchange and shipping) and highly efficient option
compared to the existing solar power systems in the domestic market,
it’s likely to significantly reduce dependence on the grid with a
relatively quick payback period.
The new Powerwall from Tesla’s leading US-based energy technology
company is an easy-to-handle wall-mounted solar storage unit which can
hold a maximum of 10 kWh, delivered at an average of 2 kWh each day. The
solution to the high power prices to Australian consumers lies in this
innovative solar battery technology.
The price of a 10kWh weekly cycling backup storage system will be
$US3,500 and $US3,000 is the price for a 7kWh daily cycling Powerwall.
This excludes the cost of inverter (which typically comes with the solar
panel system) and installation costs. Everything together is
approximately US$500 per kWh, which is way below the existing industry
cost which ranges between $US1,000 and $US1,250/kWh. Clearly, there’s
great potential for dramatic storage battery cost reduction in coming
years, just as the cost of solar panels has plunged in recent years.
The Tesla storage battery’s cost will ultimately deliver power for
about $6-8 cents per kWh to any solar system for every Australian
household. The combined cost of the rooftop solar and Tesla’s
lithium-ion storage will therefore be much cheaper when compared to the
coal-fired power delivered via the national grid.
With the new technology, eliminating grid dependence will become a
reality for Australian households and high electricity costs will be a
thing of the past. Solar + batteries have already been embraced in areas
with high electricity prices like Hawaii. Although at the crossroads
with incumbent utility companies, Tesla’s solar storage battery has a
bright future in the Australian market.
The lithium-ion batteries will see more Australian households
maximizing the amount of self-consumption. At the traditional end of
power generation, the existing business models based on coal-fired power
stations and huge networks of wires and poles will be seriously
challenged.
Why Australian Households Should Invest in Tesla’s Solar Storage Battery
Solar + storage is particularly attractive in Australia due to its
climate. The idea of generating one’s own electricity and storing it for
use at a later time is attractive to Australian households. Solar,
compared to other forms of power generation, is cost-effective and
convenient with the only big constraint being the availability of
adequate space for the panels.
The disadvantage of solar energy
is that the sun reaches the panels for only a limited number of hours
each day and solar power generation is inconsistent. The storage battery
enables the power requirements and pattern of usage of the household to
better match power generation.
Before the invention of Tesla’s lithium-ion storage battery, storage
was relatively expensive and consumer unfriendly, mostly involving less
efficient, heavy, lead-acid batteries requiring more space. However,
lithium-ion batteries including Tesla’s PowerWall are changing that.
With their costs likely to fall sharply in the near future, more and
more Australian households will enjoy the unique features of these
batteries:
- Much lighter
- Occupy less space
- Discharged virtually at a constant voltage
- Hold charge for extended periods of time
It’s worth noting that Australian households are likely to enjoy
reduced power prices through Tesla’s new technology only if the federal
government and other stakeholders in the energy industry scale up
production of lithium-ion battery housings, energy monitoring, storage
battery management systems, and integrated manufacturing of solar energy
components including inverters. Whether they take up that challenge,
only time will tell.
http://cleantechnica.com/2015/05/27/the-past-present-future-of-electricity-in-australia/