There’s nothing new under the sun

If you are at all concerned about sustainable energy supplies and the need to get off the fossil fuel powered electricity path you can’t have missed what some solar PV groups are calling a proposal to “tax the sun”.

What it comes down to is that the Australian Energy Market Commission has issued a report highlighting what they see as the need for new tariffs for every solar home connected to the grid because, they seem to be saying, grid connected solar homes are “free-riding” on those electricity consumers who don’t input solar-generated electricity into the grid.

In a longish article on the issue published in REneweconomy, Giles Parkinson said:

AEMC chairman John Pierce on Wednesday [October 9] unveiled a “strageic priorities” document that highlights solar PV as one of the most pressing issues for the electricity industry – both for providers and consumers – and suggests that network tariffs in particular do not reflect the reduced use of the grid caused by solar households.

“Distributed generation is blurring the traditional delineation between consumers and producers of electricity,” Pierce said in a speech to the East Coast Energy Outlook conference in Sydney

“One source of stakeholder concern is that network costs of consumers with rooftop solar PV are subsidised by other consumers because the full costs and benefits of distributed generation (such as solar PV) are not reflected in the prices consumers pay for electricity.”

The solar industry is outraged by the singling out of solar, because they say it is clear that the greatest cross subsidy in the electricity industry goes to users of air-conditioners: The government white paper conceded that each $1,500 air con system imposes five times that amount in network costs on other users.

Now is starts to seem like AMEC has got their strategy out of the playbook of the American Legislative Exchange Council (ALEC), which Wikipedia describes as a US  forum for politically conservative state legislators and private sector members [read organisations] to collaborate on model bills, i.e. draft legislation, often serving the interests of the private sector members, that members can customize and introduce for debate in their own state legislatures.  The website ALEC Exposed is dedicated to uncovering the doings of ALEC, its corporate connections, and its funding sources.

In what a recent article in The Guardian calls “a sweeping new offensive against renewable energy”, ALEC proposes that governments penalize homeowners who install their own solar panels—casting them as “freeriders” who are not paying for the infrastructure they are using. In effect, they say, all the other non-direct generation customers are being penalised, and instead homes with grid-connected solar PV  should be paying to distribute their surplus electricity on the grid.

The article reports that this is a part of a larger anti-renewable energy strategy which will promote a suite of model bills and resolutions aimed at blocking Barack Obama from cutting greenhouse gas emissions, and blocking state governments from promoting the expansion of wind and solar power.

If the AEMC is copying the ALEC strategy, stand by for more or the same here in Australia.

The Australian Energy Market Commission (AEMC) was set up by the Council of Australian Governments through the Ministerial Council on Energy in 2005.  It is is the rule maker and developer for Australian energy markets, and also provides advice to Ministers on how best to develop energy markets over time.

I can’t help wondering whether the AEMC is as independent as it should be as a statutory commission set up by government, given the similarity of its stance on grid-connected PV generation to that of the ALEC.  Or, if it really is acting independently in this regard and the similarity to the ALEC stance is coincidental, whether its terms of reference might not be too much focused on maintaining a stable market for the large energy generators and distributors, and not enough on the best outcomes for the country in the long term.  There is also the question of whether the AEMC regards the totality of the multitude of grid-connected electricity generators as a valid player in the market – or are they seen as “collateral damage” in moves to maintain profitability for the traditional players?

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