Network Charges will Fuel the Grid Isolation
In 2012, AGL economists Paul Simshauser and Tim Nelson introduced the concept of the "death spiral" to the Australian energy sector, highlighting the escalating issue where the increasing adoption of rooftop solar and rising electricity prices began to significantly diminish grid electricity demand. While solar, particularly rooftop solar, hasn't led to the death of the National Electricity Market or any other electricity market, it continues to massively transform the industry. This shift affects everything from the economics of coal and gas-fired power stations to grid stabilisation and resilience.
Even with zero energy costs, electricity bills don't drop to zero due to other charges, notably network charges. These charges cover the infrastructure required to transport the energy supply, and they are sky rocketing.? As renewable generation capacity is set to more than double by 2050, network charges will likely increase significantly. At the household level, and in some industrial and commercial settings, combining solar with batteries is becoming increasingly economical, especially for remote locations and farms, which may eventually lead to greater grid isolation.
The potential introduction of nuclear power isn't expected to reduce costs significantly due to high capital costs, maintenance expenses, fuel, and running costs. Consequently, even with the installation of nuclear plants, the energy market will still face substantial challenges in trying to keep costs down.
Customers have opted for solar to reduce their energy costs, and as network costs continue to soar, the practicality of considering self-supply options will become increasingly apparent. If not already considered, this should be a priority for future energy planning.
Companies interested in exploring battery solutions and grid independence could benefit from expert guidance in this evolving landscape. Expertise like mine, can help navigate these complexities and identify the most cost-effective and resilient energy solutions.