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New measures to unlock local energy potential could save electricity consumers $1bn

21 September 2016

Innovative measures to support local small-scale energy, such as solar and co-generation, could be worth over $1 billion in the long term if implemented, according to new research released today by the Institute for Sustainable Futures (ISF) at the University of Technology Sydney.

Economic modelling found paying ‘local network credits’ to local generators for their role in reducing overall investment in the electricity network could reduce network expansion costs by 59 percent, representing an overall positive economic benefit of approximately $1.2 billion by 2050.

The new findings strongly support an energy market rule change to allow for local network credits proposed by The Property Council, the City of Sydney and the Total Environment Centre. A decision on the rule change by Australian Energy Market Commission (AEMC) is due to be announced on Thursday.

ISF Project Director Jay Rutovitz said new technologies are already rapidly changing the electricity market and the findings clearly indicate a need for mechanisms to level the playing field for local energy.

“Our research shows that combining local network credits with a measure allowing households and businesses to trade electricity with their neighbours (known as Local Electricity Trading or Virtual Net Metering) improves the economic viability of local energy projects,” Ms Rutovitz said.

“Exploring regulatory changes will be critical for building the energy systems of the future and encouraging more renewables into our grids.”

ISF researchers conducted five trials of proposed local energy projects at council and utility sites around the country, including solar PV, wind energy, geothermal and co-generation. The Australian Renewable Energy Agency (ARENA) provided over $300k of funding support for the project.

Mayor Clr Gail Giles-Gidney of Willoughby City Council, one of the project trial participants said, “Willoughby Council is committed to greening our energy supply, but we also need to achieve value for money for Willoughby residents. We see local network charges and local electricity trading as fair and necessary measures to enable councils to take stronger action on renewable energy, and make better use of our existing electricity grid.”

Stephanie Bashir of trial participant electricity retailer AGL Energy (AGL) said “The need to provide secure and cost effective energy to consumers is paramount and as our energy landscape changes, exploring new ways to supply and exchange energy are needed. AGL considers that projects such as this – which explore and test alternative models for network pricing and facilitating uptake of distributed energy – are of great importance when considering what regulatory and market frameworks will best support the transition to the electricity grid of the future.”

Mark Byrne of the Total Environment Centre said, “The Total Environment Centre strongly supports the implementation of Local Generation Network Credits. It’s a common sense measure to ensure that we get the best use out of our existing investment in the NSW electricity grid, while recognising the multiple benefits of local power generation.”

The project is supported with funding from ARENA, UTS, Byron Shire Council, City of Sydney, Ergon Energy, Moira Shire Council, Swan Hill Rural City Council, Wannon Water and Willoughby City Council, and with in-kind support from  AGL, NSW Government Department of Industry, Powercor and Total Environment Centre.

More information: http://bit.do/Local-Energy

Contact: Jay Rutovitz, Project Director, jay.rutovitz@uts.edu.au, 0421 651 048, or
Alison Atherton, Project Manager e: alison.atherton@uts.edu.au, 02 9514 4909 

ISF media contact: Xavier Mayes, Xavier.Mayes@uts.edu.au, 0423 030 658