Is Barnett eyeing the right target?

It stands to reason.

Premier Colin Barnett has proven he is a reasonable bloke by doing the right thing by solar owners in Western Australia who made an investment decision with his solar feed-in tariff.

So when he said Fairfax radio this week that, “It’s fair to say that electricity consumers, all of us, whether we’ve got solar panels or not, maybe we should be paying a fixed component for all the infrastructure, particularly the power line system”, one can only assume that’s because he is so reasonable, he is going to look at who costs the networks the most money.

According to the latest (2006) Australian Bureau of Statistics data on appliance use in Western Australia, there were 800,800 homes in Western Australia. Of those, 567,600 have air-conditioners fitted.

In releasing the Energy White Paper a year or so ago, federal energy minister Martin Ferguson mentioned that:

“Every time someone in Australia installs a $1,500 air conditioning system, it costs $7,000 to upgrade the electricity network to make sure there’s enough capacity to run that system on the hottest summer day.”   

The White Paper also recognised, too, that “energy efficiency and demand management, two of the critical areas where the NEM is failing badly, provide the cheapest and easiest solutions to rampant peak demand.” 

So we can only logically assume that Barnett is going to target the low hanging fruit (energy efficiency and demand management) because it’s cheapest and easiest.

Biggest problem? Air conditioning. Lowest hanging fruit? Energy efficiency and demand management.

Western Power’s MD Mr Doug Aberle completely agrees, according to the company’s website. Mr Aberle is quoted as saying:

“In Western Australia short but high peaks in electricity use are increasing, mostly due to the rapid rise in the number of air conditioners in homes.  Eighty-two per cent of Western Australian homes now have air conditioners installed (ed:thats even more than our modelling). All electricity networks build to provide for peak use times. The question is, do communities want to live with more and more infrastructure when simple changes to energy use can reduce the need? The substations, cables, power lines and other infrastructure that we build to support energy needs are not driven by normal consumption, but by the total peak. We build to cover the worst case scenario.”

This would suggest that potentially, Barnett (who is reasonable as we know, and bound to agree with the federal minister and his own Western Power), is going to somehow try to claw back a staggering $3.973 billion from Western Australians with air conditioners in their homes. Divided by the number of air-conditioned homes, if he tries to recover that in the four-year budget period, that’s a $4.79 per day (or $1750 per year) fixed charge for every air-conditioned home in the state.

Wow, lifting daily fixed charges from $0.43 to $4.79 (an 897 per cent increase) is going to be a tricky sell though.

As we can see from the above, the 75,000 solar homes can’t possibly recover the cost outlined by Ferguson, compared to 576,000 air-conditioned homes – so he really has little choice if he’s genuine.

‘Air Conditioned Citizens’ anyone? 

This article was originally published by Solar Business Services. Republished with permission.