Australia’s energy market rule-maker today baulked at a golden opportunity to modernise and decarbonise Australia’s energy system by valuing electricity generated close to where it is also consumed.

That’s the view of the Total Environment Centre, which has been working since 2004 to reform the electricity sector – the dirtiest, most greenhouse-intensive industry in Australia.

Today the Australian Energy Market Commission announced that it was rejecting the proposal by TEC, the City of Sydney and the Property Council of Australia to introduce local generation network credits (LGNCs).

“These credits would have recognised the value to networks of energy generated in the local system rather than requiring expensive infrastructure to travel hundreds of kilometres”, explained Mark Byrne, TEC’s energy market advocate.

“With network charges amounting to nearly half the average retail bill across Australia, our proposal would have made it more financially viable to sell energy locally. It would have been of great benefit to local councils, community energy groups and precinct scale co- and trigeneration facilities wanting to put local solar, wind and bioenergy into the grid to replace dirty coal and gas.”

TEC is critical of the economic justification used by the AEMC to justify inaction. “We had modelling done by the ISF at UTS that showed that more than half of the new investment in network infrastructure that would have been needed by 2050 would have been avoided with local network credits”, said Mark Byrne.

“We also had work done by energy economists OakleyGreenwood that found that solar plus storage especially could be useful to networks in reducing peak demand, and that this value should be reflected in a credit to the local generator.”

“We never thought our proposal was the last word, and looked forward to discussing how to improve it. But that didn’t happen.”

“The impact of this decision will be to push more local generators and prosumers to reduce their use of the grid, to look at private wires and microgrids, and potentially to disconnect”, argues Mark Byrne.

“Today we are therefore calling on state and territory ministers to support a change to the national electricity objective (NEO) to force the AEMC and others to take seriously the need to urgently reform Australia’s energy market to help meet Australia’s Paris climate change commitments.”

“In the meantime, the reform option is still live until the AEMC makes its final determination, so we encourage everyone to make a submission before 3 November.”

For more information or interviews please contact Mark Byrne on 0403070442