Solar eclipsed in an energy paper parody

The government's energy white paper review has given a platform for networks to attack solar, and the laughable situation where government is lobbying government for gas help.

Responses to the government’s Energy White Paper review were always going to be interesting, to say the least.

You have to expect a certain amount of bias from groups who want to put forward the views of the stakeholders, it just stands to reason. First off the blocks seems to be the Energy Networks Association, which represent network owners around Australia.

Predictably, the ENA has called for the axing of the Small-scale Renewable Energy Scheme.

Given that networks make money off selling electricity transported through their poles and wires, it’s not surprising that they are against a technology that slows down demand. Some network staff I have spoken to claim it could be costing them hundreds of millions of dollars a year in lost revenues.

But what really intrigues me is ENA membership, which we have written about before. According to its website the ENA has 15 network operators as members. Of those 15 members, 10 (almost 67 per cent) are government owned entities, although it prefers to refer to its members as “businesses”.

So, in effect, if the ENA is representing its member base properly, it will (predominately) represent the views of its government owned members.

In this sense, it’s a case of government lobbying government through a body that represents itself as being about businesses.

In their submission, the ENA variously calls for:

"Cost reflective pricing": customer initiated trigger events (such as the connection of solar photovoltaic panels, battery storage and electric vehicles and connections to new premises). This is code for “non energy related charges for connecting solar”.

– "Displacement technologies to be excluded": i.e. solar water heaters and heat pump water heaters currently included in SRES should be excluded.

– "Current government incentives schemes": such as the Small-scale Renewable Energy Scheme distort markets by further driving the residential customer base away from least cost emissions gas technologies.

Under the section titled "A level playing field for gas" the ENA says:

A number of energy schemes designed to encourage lower emissions energy consumption are not fuel neutral and thus represent a distortion in the market. The ENA believes that this is particularly the case in residential hot water heating appliances, where there are market distortions that discriminate against gas hot water systems.

They also say:

Incentives are provided for solar and heat pump technologies under the SRES to replace electric water heaters but less expensive gas hot water systems are excluded. The costs imposed on consumers by the  lack of a level playing field for gas hot water systems will only be compounded if the proposed Million Solar Roofs program includes solar water heaters.

The costs imposed on consumers – what the?

Surely the costs for consumers are lowest when they have no fuel cost, especially rapidly rising gas costs.

They also recommend:

Recommendation 8: Support market development and a level playing field for gas, through removal of unnecessary barriers to new gas supply, developing measures to promote greater transparency in the gas market and to ensure that energy schemes designed to reduce emissions are fuel neutral.

I just find this statement quite bizarre for a number of reasons.

Firstly, it suggests that there is a need for schemes that use fuel and, as such, that reasonable and cost-effective alternatives don’t exist. They do through solar hot water, heatpumps and, increasingly, PV as a direct offset or substitute for electric hot water demand.

Secondly, it argues that gas needs a level playing field, which implies it doesn’t get support. What a load of bull.

1) Mining and exploration for gas get huge subsidies through diesel excise handouts. The average Australian pays 38 cents of tax per litre of fuel. But big mining companies operating in Australia pay just 6c a litre. Instead of paying their fair share, they get a massive tax refund costing the Australian taxpayer around $2 billion a year.

2) They also get support through accelerated depreciation. The coal, oil and gas sectors get special treatment under Australia’s tax system allowing them to depreciate their assets like drilling rigs and pipelines over a much shorter period than they are actually in use, costing the Australian taxpayer another $2 billion a year.

So clearly, they already get a lot of support. Given that the cost of SRES is minuscule and is passed on to consumers (and not borne by network companies) this recommendation is quite simply driven by their desire to sell more gas, nothing more nothing less.

Government lobbying government. Gotta love that democracy at work.

Nigel Morris is director of Solar Business Services.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles