Energy Retailers and Prime Minister meet again

The large electricity retailers have followed up on their previous meeting earlier this month in Canberra, meeting with Prime Minister Malcolm Turnbull in Sydney today. The topic of discussion was in regard to retailers contacting their existing customers who are on high standing electricity rates and informing them of more competitive deals available to them. The retailers agreed to the PM’s request to make contact with their customers on high standard rates and will be writing to over 2 million customers. This is one of the measures taken by the Turnbull government to reduce energy costs for Australian households.

It was noted that the energy retailers stressed to Mr Turnbull the need for energy policy certainty. This relates to whether or not the Turnbull Government will accept the final recommendation from the Finkel Review to implement a Clean Energy Target. On Monday night, Mr Turnbull appeared on the ABC’s 730 Report. When asked if his government would make a decision on the Clean Energy Target before the end of year, Prime Minister Turnbull could not commit but insisted that his government was taking a detailed considered approach to the matter.

Victoria announce 650 MW reverse auction and Queensland launch “Renewables 400”

Earlier today the Victorian Premier Daniel Andrews and the Minister for Energy, Environment and Climate Change Lily D’Ambrosio announced the introduction of legislation for Victorian Renewable Energy Targets (VRET); the largest renewable energy auction in Australia. The ministers also announced the award of contracts for two large scale solar plants to supply energy to Melbourne’s tram network.

Daniel Andrews announced that the Victorian Government would conduct a reverse auction for 650 MW of renewable capacity. Details of when the auction would be taking place were not provided. This move by the Victorian Premier will help towards achieving the states renewable energy target of 25% by 2020 and 40% by 2025.

Earlier this week the Palaszczuk Government launched the Renewables 400 program; a reverse auction for 400 MW capacity. The program invites parties to participate in a reverse auction for wind, solar and storage capacity. As part of the project up to 100 MW will be allocated specifically to storage capacity. An Expression Of Interest (EOI) will commence in late August 2017. The aim of the project is to:

• Diversify the sources of Queensland’s electricity generation
• Support system security and reliability
• Accelerate the deployment of energy storage in Queensland
• Support local business and employment

As was the case in Victoria, this project will move Queensland closer towards achieving its target of 50% renewable energy by 2030.

150 MW Solar Thermal Plant to be constructed in South Australia

On Monday 14 August South Australian Premier Jay Weatherill announced that Solar Reserve had won a 20 year electricity supply agreement with the South Australian government. The agreement is reported to account for 75% of the SA Governments electricity requirement.

The 150 MW solar thermal plant has been named Aurora and will be constructed just north of Port Augusta. The plant is a critical piece of infrastructure which will help mitigate volatile electricity prices in SA. The plant provides synchronous renewable energy that can be dispatched when there is no sunlight or wind available. According to Aurora the plant will have 8 hours of full load storage.

It is reported that the South Australian Government will be paying $78/MWh for electricity generated from the plant which is a competitive price for energy in South Australia. The project is being partially funded by a $110 million concessional equity loan from the Australian Federal Government. Construction of the plant is expected to begin in 2018 and be completed in 2020.

CS Energy and Alinta team up to provide lower prices for residential customers

The Queensland Government has announced CS Energy; which is wholly owned by the Queensland State Government, will form a 50/50 partnership with the privately owned Alinta Energy. The newly formed company would provide discounted electricity prices to residential customers and small businesses in South East Queensland.

The new company would offer a 2-year electricity contract with a headline 25% discount of usage charges. This offer is currently marketed on Alinta’s website as a Home SaverPlus.

The Queensland Government is urging other retailers to offer similar discounts and has encouraged them to approach the government owned corporations to strike similar deals and pass on savings. There are currently no plans to extend this offer outside South East Queensland.

Update on Prime Minister meeting electricity retailers in Canberra

Today (Wednesday 9 August) Prime Minister Malcolm Turnbull, Treasurer Scott Morrison and Energy Minister Josh Frydenberg met with Australia’s largest energy retailers and Matthew Warren of the Australian Energy Council in Canberra to discuss options that will mitigate the rising cost of energy for Australian consumers.

The meeting appears to have been successful with energy retailers agreeing to contact customers on a discount rate and provide details of alternative offers prior to the expiry of the agreement. The correspondence is to be in plain English and provide facts that can be understood by normal customers. In addition to this retailers will need to direct customers to the price comparison website managed by the Australian Energy Regulator (AER).

As an indication of how seriously Mr Turnbull is taking this he has requested that the retailers inform the Federal Government and the energy market regulators of the number of customers that are on the highest tariffs after they come off discounted plans.

It was agreed that a follow up meeting would occur later this month which again, Edge will be monitoring closely.

Prime Minister summons electricity retailers to Canberra for summit

Today (Wednesday 9 August) Prime Minister Malcolm Turnbull, Treasurer Scott Morrison and Energy Minister Josh Frydenberg will meet with Australia’s largest energy retailers and Matthew Warren of the Australian Energy Council in Canberra. The Prime Minister has requested the meeting in an attempt mitigate the rising cost of energy for Australian consumers.

One of the key concerns Mr Turnbull will be discussing is the action of retailers switching consumers to more expensive tariffs without their knowledge.

Whilst the ACCC is investigating competition within the electricity retail market, this report will not be finalised until next year. The Prime Minister is seeking more immediate solutions to the issue of rising electricity costs.

Edge will be monitoring this meeting closely and will provide commentary after the contents of the discussion are released.

Hydraulic Fracturing Inquiry – Northern Territory

On Friday 14 July 2017, the inquiry into Hydraulic Fracturing in the Northern Territory released an Interim Report on the impacts and risks associated with hydraulic fracturing.

The interim report details the activities undertaken by the panel so far.  This includes:

  • community consultations;
  • research into shale gas development;
  • effective water management;
  • land,
  • social; and
  • environmental impacts.

The panel will continue with planned activities including site visits to Queensland coal stream gas (CSG) operations, consultation with the Alberta Energy Regulator, and will continue to hold public hearings and community consultations as scheduled.  It is anticipated that the final report will be handed down by the end of 2017.

Read the interim report via the Fracking Inquiry website here.

Victorian Government announces Renewable Energy Action Plan

The Victorian Government has announced its Renewable Energy Action Plan. The Plan reconfirms its commitment to meeting its renewable energy targets of 25 per cent by 2020 and 40 per cent by 2025.  There will be a second round of renewable certificate purchasing to encourage up to 75 MW of largescale solar, of which 35 MW will be used to power Melbourne’s trams. Other initiatives such as battery storage, energy efficiency and solar panels will be supported through cooperation with the Clean Energy Finance Council (CEFC), and the $300 million raised through the Government issuing Green Bonds.

To read all the actions that the Victorian Government has committed to, go to https://www.energy.vic.gov.au/about-energy/victorias-renewable-energy-action-plan

South Australia – Tesla Motors and Neoen awarded South Australian Battery system contract

On Friday afternoon Tesla Motors and French wind farm developer Neoen were awarded the tender for the South Australian battery system as part of the South Australian Governments energy security plan. The system will have a capacity of 129 MW hours and will be paired with Neoens Hornsdale 200MW wind farm. The purpose of the battery system is to provide energy when renewable energy isn’t available, i.e. when there is no wind.

The timing of the announcement couldn’t have come at a better time as this last week South Australia observed a curious situation where low cost renewable generation was more available than the week prior however average spot prices increased. The reasons for this was increased intensity and frequency of price spikes driven by the intermittent nature of wind generation. In previous weeks generation was supported by gas which is not intermittent and despite its marginal cost being significantly higher than wind the predictable nature of gas resulted in a lower average cost. The battery technology is specifically designed to mitigate this problem.

Whilst 129 MW hours of battery is not sufficient to smooth out all of South Australia’s problems it is an exciting move forward and Edge Energy Services are very pleased to see this project going ahead!

Select Solutions for Sale

This week AusNet Services announced the sale of its metering and asset intelligence business, Select Solutions.

AusNet Services is the largest diversified energy network business in Victoria, owning and operating approximately $11 billion of assets.  The company owns and operates three regulated networks – the whole of Victoria electricity transmission network, and electricity and gas distribution. The company also has a Commercial Energy Services division focused on unregulated opportunities, which Select Solutions is a part of.

Select Solutions is believed to be worth approximately $100 million and has 1000 employees.

It is anticipated industrial companies will be interested in the purchase.

AusNet Services was listed on the Australian Securities Exchange in December 2005.  Its two largest shareholders are Singapore Power with 31 percent and State Grid Corporation of China with 19.9 percent.