Push to reform the electricity market

The Property Council of Australia, the Total Environment Centre and the City of Sydney are asking the Australian Energy Market Commission (AEMC) to change the rules that govern the electricity market.

The groups have acknowledged that more and more Australian businesses and households are generating and exporting local electricity. As well as saving money for themselves, local generation benefits other users by bringing down the costs of transporting power across long distances from remote power stations.

Yet under current rules, full network charges are still payable if an office tower with its own generator sends surplus power to the building next door or across the street. This fails to recognise the savings made from not using the long-distance networks of poles and wires.

The proposed rule change would ensure local generators receive a credit for surplus power exported to the grid which reflects its economic value. This would increase the financial return for local energy projects, making the electricity network more efficient and lowering electricity prices for all consumers over time.

The NSW director of the Property Council, Glenn Byres, said the proposed change would encourage more local power generation and thus improve energy efficiency, curb emissions and reduce network maintenance costs.

The Total Environment Centre’s energy market advocate, Mark Byrne, added that the rule change would be “a major milestone on the journey towards creating a modern, decentralised, low-carbon electricity market fairly and cost-effectively”.

The AEMC will review the proposal and consult with industry, business and the community before making a decision.