Victorian feed-in tariff introduced with improvements

I have just received a media release from Energy Minister Peter Batchelor stating that the Brumby Labor Government’s feed-in tariff legislation passed by the Victorian Parliament on 25 June 2009.

The final structure of the Victorian feed-in tariff includes:

• 60 cents credit per kilowatt hour for energy fed back into the grid within that year. This is about four times the current cost of electricity in Victoria.
• The tariff is paid to residences, community organisations and small businesses with energy consumption less than 100 MWh a year
• An array size limit of 5kW applies
  

This outcome is a significant improvement on the feed-in tariff initially proposed by the government. Amendments introduced in the Upper House which improved the scheme include:

• extending participation to community organisations and small businesses with energy consumption less than 100 MWh a year
• increasing the array size limit from 2kW to 5kW

Two electricity retailers have also provided letters which state they will provide cash or rollover credits for energy produced, rather than these credits "expiring" as was initially proposed.

The additional amendment put by the Greens for the tariff to be paid on the gross output (rather than the net output) was not accepted.

The tariff does not apply to large scale solar or wind either, so there is potential to further improve this legislation in the future.

On balance, this is a significant improvement over the legislation initially proposed. The government states that the amendments were made "in response to input from responsible environment groups" which demonstrates that the efforts made to contact politicians and build community support for a good feed-in tariff were successful.

Well done ATA, Environment Victoria, Climate Action Groups and everybody who spent time and considerable effort on this campaign.

2008 Feed-in Tariff rally at Parliament

External links

• Victorians to benefit from the fairest and best solar feed-in tariff, Media Release, Peter Batchelor, 25 June 2009
• Victorias new solar laws, Greenlivingpedia
  

The Labor government should introduce an effective feed in tariff to take real action on climate change

An open letter to:

• Labor Government Cabinet Members
  
• Eastern Metropolitan Region Labor party members
  

I find it very disappointing that the Energy Minister Peter Batchelor is refusing to represent the best interests of the Victorian public by threatening to kill the solar feed-in tariff in parliament.

Peter Batchelor has proposed a crippled feed-in tariff that favours the big end of town. Some energy companies have even been promoting his proposed net feed in tariff several months before it has even been legislated.

The net tariff proposed by Peter Batchelor will not encourage the uptake of solar power by households and community groups.

The Greens have put amendments to provide a gross tariff that has been proven to be effective in other countries and is in line with those in the ACT and Western Australia.

Peter Batchelor cannot even get his sums right. After claiming a real feed-in tariff would cost $100 per household per year, he now claims it will cost $40. He apparently has not bothered to read his own consultant's report that found it would cost about $8 per year.
In addition, low-income households can easily be protected from increased prices by granting them a concession.

A simple gross feed-in tariff should have been a easy and effective way for the Labor Government to provide real incentives for households and community groups to increase renewable energy generation and transition off coal-fired power.

Unfortunately, the Labor party is playing politics and looking after vested industry interests rather than listening to the community and taking real action to address climate change.

If the Labor party kills the solar feed-in tariff, you will kill the only real action on climate change you have on the table. I implore you to see sense and support an effective gross feed-in tariff.

Peter Campbell

Links

• Household solar power laws at risk, state warns, Adam Morton, The Age, June 2, 2009
• Feed in tariff, Greenlivingpedia
  

Another letter to Minister Batchelor on his clayton's feed-in tariff

Here is a letter I have just sent to Peter Batchelor cc to Victorian Ministers and some other MPs on feed-in tariff legislation.

Feel free to use any or all of the content if you would like to write them an email (or letter) too.

It seems this legislation is about to go through the Victorian parliament!

Melissa Fyfe sums up the situation well in this article: http://www.theage.com.au/opinion/solar-hopes-up-in-smoke-20081004-4twd.html?page=-1


====================================

Dear Minister Batchelor,

I have received a letter from the Department of Primary Industries (your ref: ME003562) in response to my three recent queries to you regarding the Brumby Government's proposed feed-in tariff legislation. Unfortunately, the letter does not answer any of the queries I have raised with you. It provides me with a summary of the proposed legislation and a "fact sheet" on it. I was not requesting further general information on this ill-considered legislation, my queries relate to specific issues concerning it, none of which have been addressed in the letter I received.

To reiterate, my previous questions, to which I still request answers from you, are listed below in bold.

1. When will your feed-in tariff legislation be introduced?
2. When can a copy of it be sent to me?
3. What is the purpose of the 2kW array size cap?
4. Why are you not able to model the tariff for gross metering similar to successful tariffs in place in Germany and elsewhere?
5. Why you have chosen to keep the economic modelling that you say your decisions were based on secret?
6. When can I meet with you to discuss these concerns?

My further questions to you are numbered in the text below:

I also note that the national RENEWABLE ENERGY (ELECTRICITY) AMENDMENT (FEED-IN-TARIFF) BILL 2008 being considered by the Australian Senate is framed around a gross metered tariff, in accordance with world best practice.

I also note that the Labor ACT feed-in tariff legislation pays on gross metering (the full production amount) and has a generous 10kW cap on array sizE.

7. Why is the Brumby government proceeding with a feed in tariff for Victoria that will be completely ineffective and conflicting with the proposed national legislation?

8. What is the Brumby government's target for domestic solar panel installation (in MW) for 2009 and 2010?

If your proposed feed-in tariff legislation proceeds it will simply not deliver any of the benefits you claim. The 2kW cap on array size means that residences will not be able to install a big enough array (e.g. 3 to 4 kW) to generate a significant net output so nobody will actually be paid the premium rate. In addition, all power generated should be paid the gross tariff as it is reducing the power that would otherwise be sourced from the coal-fired electricity on the grid.

It is not clear to me how you have constructed such abrogated legislation, hence my questions seeking clarification. If this legislation proceeds in its current form, it will soon be regarded as an enduring bad legacy of your government, and a missed opportunity for the people of Victoria.

By contrast, and gross feed in tariff with say a 10kW cap on array size would greatly boost installation of solar panels and green jobs associated with this, both of which will greatly benefit Victoria.

I am seeking an urgent response from you to my eight questions.

Peter Campbell
http://greenlivingpedia.org
0409 417 504

My previous emails:

• Subject: Re: Solar Feed-in Tariff Date: Thu, 10 Jul 2008 18:58:48 +1000
• Subject: Re: Solar Feed-in Tariff Date: Mon, 09 Jun 2008 23:38:12 +1000
• Subject: Re: Solar Feed-in Tariff Date: Thu, 08 May 2008 22:29:08 +1000
• Subject: LETTER: Please introduce a feed in tariff Date: Wed, 19 Mar 2008 11:26:37 +1100

Labor's feed-in tariff can still be fixed

Below is the third letter I have sent to Peter Batchelor; so far he has not bothered to answer my first two. I don't think he will bother to answer this one either. So much for accountable government "for the people".

I have also sent copies to all members of John Brumby's Cabinet, as they participated in the decision to implement a Clayton's feed-in tariff in Victoria.


Dear Minister Batchelor,

I am disappointed to have still received no response from your office to my suggestions and questions regarding the government's proposed feed-in tariff legislation (included below).

It should now be apparent to you and the rest of Cabinet that your proposed legislation has had a very detrimental effect on the uptake of solar panels and therefore comprised Victoria's opportunity to become a leader in the installation and even manufacturing of solar panels. This in turn compromises Victoria's ability to meet both State VRET and Federal MRET requirements.

The 100K household income means test on the solar rebate introduced by Peter Garrett has further exacerbated this situation, to the point where solar installations have plummeted when the very opposite should be occurring.

Your stated concerns about impacts on low income households can be addressed by providing them with an appropriate concession.

Also please note that net metering in fact favours high income households where nobody is home consuming power during the day (when a net output can be generated) and actually discriminates against working families where a parent is at home with children using appliances such as washing machines, lighting and cooking - which prevents them generating net output.

In the interests of transparent and accountable government, could you please answer the following questions?

1. When will your feed-in tariff legislation be introduced?

2. When can a copy of it be sent to me?

3. What is the purpose of the 2kw array size cap?

4. Why are you not able to model the tariff for gross metering similar to successful tariffs in place in Germany and elsewhere?

5. Why you have chosen to keep the economic modelling that you say your decisions were based on secret?

6. When can I meet with you to discuss these concerns?

Feed in Tariff - Victorian government reasons don't hold up

I rang Peter Batchelor's office to discuss details and reasons for the structure of the Feed in Tariff being introduced in Victoria. I spoke at length to one his ministerial advisors. The concerns raised by the advisor and my reponse to them are listed below.

=================

Thanks for taking the time to speak with me last Friday about the feed in tariff legislation.

In answer to the following concerns you raised regarding gross metering, and your reasons for justifying the 2kW limit:

1. The government doesn't want to pay people for the energy they use

The government should pay a premium for every watt of renewable energy, both when used domestically and when exported to the grid. This is because the energy is zero emissions and directly replaces energy from coal-fired power stations. The energy is also very valuable as it is generated at peak times on hot days when the grid is nearing capacity to supply.


2. A gross metered feed in tariff without the 2kW cap will drive up electricity bills for low income households

Premier Brumby claimed on Stateline (Friday May 9, 2008) that the FIT "would have imposed a significant burden on low income households, with some estimates that this would add up to 10% to the cost of power bills". I understand from you that the economic model used to support this claim is now a Cabinet in Confidence document that cannot be released to the public.

Given that other economic analysis has estimated no more that 1% increase in power bills, I question the veracity of the report (or model) that the government claims has informed their decisions on structuring the FIT.

I also think is is quite inappropriate for such an important and non-sensitive piece of economic information to be subject to Cabinet secrecy. This is not transparent or accountable process or decision making.

In addition, specific measures, such as Government funded installation of a solar system, could be provided for low income households if they are genuinely disadvantaged by the feed in tariff. Other subsidies or grants to them are also possible.

3. The FIT doesn't encourage energy efficiency.

The feed in tariff is not a policy instrument for directly encouraging energy efficiency, and should not be regarded or measured as such. However, households with solar panels generally become more aware of their electricity consumption and production and are therefore more likely to investigate and adopt measures to improve the efficiency of their electricity usage.

A more appropriate way of encouraging energy efficiency - which is complementary to a gross-metered non-capped FIT is to mandate that homes produce an amount (say 15% or 20%) of the energy they consume. This would drive efficiency measures so that the energy production percentage can be achieved (e.g. by solar panels) with the minimum and most cost effective energy generating system.

The Government should also mandate energy efficiency labelling for all appliances immediately.

4. The VRET is a more important factor in encouraging renewable energy

While the Victorian Renewable Energy Target is good to have, I would argue that it should be higher (e.g. 20%). Also, it yields little benefit to household producers with solar panels, it mainly benefits energy companies and large scale producers. I addition, a FIT complements and supports the VRET. Treating them as alternatives is a false dichotomy - we can have both.

5. The 30 minute timeboxing for net metering reduces the impact of the 2kW cap

While this may result in some additional payments to producers I think this will be insignificant compared to what gross metering would yield. This is very complicated too - the vast majority of people simply don't understand this measure.

A 2kW system will supply about 60% of an average household's elecricity consumption, so there will be very little net exports to the grid from such systems. I can see no good reasons for the 2kW cap.

In summary

It seems to me that the Victorian government has lost sight of the overall goal of reducing carbon emissions. Many more solar panels on Victorian and Australian roofs would directly reducing carbon emissions, and successful Feed in Tariff models in other countries have proven that this works. In Germany, this has resulted in power now produced from solar panels that is equivalent to two coal fired power stations - Germany now has 4,000 times more energy output from solar panels than Australia.

The Victorian Government's claim on the proposed Feed in Tariff will pay off solar panel systems in 10 years is inaccurate. More accurate financial modelling indicates that it will have negligible effect on reducing the payback period for panels.

Increased clean energy production for solar panels, along with investment in other forms of renewable energy such as wind power and large scale solar, will reduce and hopefully eliminate the need to build any more coal fired power stations which the entire community would have to pay for - and which would also impose significant financial burden on low income households.

I strongly urge the government to modify the tariff to a proven effective and equitable model , which is:

• 60 cents per kWh
• paid for at least 15 years
  
• paid on the entire output of a system via gross production metering
• no caps on array size and/or outputs.

This tariff would encourage many more people to install panels, dramatically increase output of clean zero emissions energy, and contribute to a thriving and growing local solar installation industry in Victoria.

It would benefit all Victorians, and be a key local measure in tacking climate change.

Regards,

Peter Campbell


Links

• Premier Brumby declares Victoria a national leader on alternative energy, Stateline Victoria

Brumby goes for "green coal" and subverts real action on climate change

Just when I thought government rhetoric and funding (using taxpayer's money) on pretending that the coal industry can somehow be made "green", "clean" and even "carbon neutral" had reached ridiculous levels, Peter Batchelor comes out with this:

"But Mr Batchelor said coal must be used in a more environmentally friendly way and clean coal technologies, such as burying carbon emissions underground and drying coal, offered the potential for zero emissions from coal-fired power stations."

"The future of coal relies on it becoming greener," he said.

Mr Batchelor said that capturing carbon, by returning and storing it underground in a safe and environmentally friendly way, "mimicked nature".

The question here is whether he actually believes this nonsense.

Zero emissions coal fired power stations? Green coal? That's funny, I thought it was brown or black.

Mimicking nature? Oh, we dig it up (using fossil fuel energy), process it, burn, capture CO2 from the chimneys (using more than 30% more energy and coal in doing so), liquefy it (using more energy), pump it a considerable distance (using more energy), squirt it under the ground - if we can find cavities vast enough to accommodate it - then cross our fingers and hope it stays there.

So how exactly does this mimic nature?

Next week's state budget will contain $110 million for an industrial-scale project investigating the capture and storage of carbon produced by power plants.

The Government will also fund a new body, Clean Coal Victoria, based in the Latrobe Valley, and commit $5 million to search for carbon storage sites, such as used oil and gas reservoirs in Bass Strait. So they don't even know yet whether they will be able to store it.

No public money should be spent on this risky venture, which even if it can be made to work, won't be viable until 2020 or later. We need emission reductions now.

So why are they doing this?

Well, there are marginal Labor state seats in the Latrobe Valley and an upcoming by-election in Gippsland which Labor wants to win. Looks like politics wins and real action on climate change looses. Or maybe they do believe their own nonsense.

Link: State puts greenhouse money on clean coal The Age