In our last blog, we discussed the details of Energex’s proposed new tariff structure. Now, let’s take a look at the general background to their new pricing system.
Energex is changing its role from a traditional deliverer of energy to an enabler of an ecosystem of distributed energy resources (DER). The new tariff options they’ve proposed are in response to these emerging network characteristics that have created, and will continue to create, challenges for their operations. Another aspect of the changing energy provision landscape is increased solar uptake and emerging new technologies.
Real savings and reflective rates
Energex says that they can now offer real savings when the network is not being used to its full capacity. They also say that they are better placed to charge appropriate, cost-reflective rates.
They believe that augmentation is no longer the only primary driver for network investment in the 2020-25 regulatory control period, and that asset replacement will, over time, become the main driver of network investment.
From ‘poles and wires’ to ‘solar and generators’
Energex’s electricity distribution network across South East Queensland comprises the ‘poles and wires’ that deliver electricity to homes and businesses. The electricity is carried across large distances by Powerlink to their connection points, because base-load generation is located remotely. But, increasingly, they also connect and support distributed generation, such as solar and embedded generators.
From generic and traditional to affordable and sustainable
As previously explained, many of Energex’s existing legacy tariffs were developed in the early 1990s. But now, with widespread uptake of rooftop solar and air-conditioning, the introduction of batteries and electric vehicles, large-scale uptake of energy-intensive appliances, and new technology to supplement or alter access to energy, many of Energex’s customers have very differing energy needs. This means that the old generic tariffs no longer cover network supply costs, or support a fair and equitable allocation of network costs.
So Energex have been challenged to develop this suite of new tariffs to maintain their commitment to safety, affordability, security, and sustainability for all customers. They explain that their proposed tariffs aim to reduce cross-subsidies between customer classes, minimise uneconomic investment in solar PV and emerging technologies, contribute to an increase in network utilisation, and delay or defer network investment in augmentation, power quality, and voltage management.