Network investment responds to interest in solar, battery storage and EVs

SA Power Networks has lodged its electricity distribution network plans for 2015-2020 with the Australian Energy Regulator (AER), outlining strategies to ensure the network can reliably and safely meet the changing energy needs of South Australian households and businesses.

The proposal will be subject to a rigorous review process including public consultation, with the AER’s initial determination due in April and a final determination in October.

“We are keeping the lid on our prices for customers in 2015-2020,” stakeholder relations manager Paul Roberts said.

“Distribution charges represent about a third of the bill and, over the five years from 2015, customers will see our charges rise below the rate of CPI, averaging less than 1 per cent per annum on the total bill (about $14 per annum for the average residential customer).

“South Australian electricity consumers will continue to benefit from reliable, safe and cost-efficient distribution services and we will start to shape a network that is better placed to support customer interest in rooftop solar, battery storage and electric vehicles as they emerge.

Mr Roberts said SA Power Networks had undertaken an unprecedented level of community consultation and research in developing the proposal. This included understanding the issues of most concern to customers and their willingness to pay for some targeted new initiatives or different approaches in some areas, including safety and vegetation management.

About $250 million of the capital investment program relates to customer-initiated investment in improved vegetation management approaches and bushfire and road safety.

“We have clearly heard the concern from some sections of the community regarding prices. Our customers have also told us they want us to maintain safety, reliability and quality of supply and they support targeted new investment,” Mr Roberts said.

While energy demand has fallen, Mr Roberts said there remained a need to invest to keep the power on, whether that be maintaining the reliability and safety of the network, replacing ageing assets or meeting localised growth in demand.

“In terms of the average age of assets, our distribution network in SA is the oldest in Australia and we need to accelerate investment in replacing ageing assets, particularly our huge fleet of Stobie poles, to arrest their ongoing, deterioration,” he said.

SA Power Networks is also working to ensure its network can accommodate changing customer behaviour, such as as the uptake of rooftop solar, possibly combined with battery storage.

“Government and regulators are wanting energy companies to develop new tariff options that ensure clearer pricing signals for customers’ future investment choices and improved fairness in pricing,” Mr Roberts said.

“The Australian Energy Market Commission is currently developing new rules to allow the introduction of a competitive market for metering services and to encourage introduction of cost-reflective tariffs that reflect people’s use of the network rather than their energy use. This is important in promoting efficient investment as customers consider investing in roof top solar, battery storage and electric vehicles.

“We are proposing the gradual introduction of smart-ready meters, which can support introduction of a new capacity-based tariff for small customers in 2017-18. We are planning that from July 2015 smart-ready meters be installed as the standard meter in all new and replacement meter situations.”