Hardship, inclusion and our customer-driven energy future Chris - - PowerPoint PPT Presentation

Hardship, inclusion and our customer-driven energy future

Chris Twomey

Leader, Research & Policy Development WACOSS Senior Industry Fellow BCEC

Rapid rise of energy costs in WA

Electricity costs: model WA household, 2009-17 Residential A1 tariff WA 2009-17

…but prices are higher in other States

Electricity costs – States and Territories Electricity costs – Perth vs Australia

Energy burden for low income households

2 4 6 8 10 12 14 16 18 20 Lowest Second Third Fourth Highest Proportion of EDHI / GHI Total energy expenditure as proportion of EDHI Dwelling Energy expenditure as proportion of EDHI Total energy expenditure as a proportion of GHI

Energy Expenditure as proportion of EDHI and GHI in Australia

Household types – single parents struggle

1 2 3 4 5 6 7 8 Couple family with dependent children One parent family with dependent children Couple only Other one family households Multiple family households Lone person Group households

Percentage of GHI

Dwelling Energy Fuel for Vehicles Total Energy

Comparison of average Australian housing costs by household composition ($/week)

Going without…

10 20 30 40 50 60 70 Not turning on heating / cooling Not cooking hot meal Going to bed early Keeping to one room

Percentage

Lowest < $31k Income $31 - 70k

Households reporting energy saving strategies

Cost of living pressure – its about the rent

Income Expenditure Net Position Single Parent Family $978.00 $905.92 $72.08 Working Family $1,425.59 $1,294.62 $130.97 Unemployed Single $310.46 $343.67

• $33.21

Cost of living pressure

Minimum Wage and Unemployment payments vs AWOTE

40% of low income households rent

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Less than $25,000 Less than $50,000 Less than $70,000 Less than $110,000 $110,000 or more Owned / mortgaged Rented

Housing tenure by income bracket in WA

Rising housing costs for renters

100 150 200 250 300 350 400 1994–95 1995–96 1996–97 1997–98 1999–00 2000–01 2002–03 2003–04 2005–06 2007–08 2009–10 2011–12 2013–14 WA NSW VIC QLD SA NT TAS ACT

Average housing costs for renters by state ($/week)

Landlords aren’t keen on energy efficiency

20 40 60 80 100 120 Owner without a mortgage Owner with a mortgage State housing Renter Private Renter All households

Percentage of households

Insulation % Window treatments % Solar electricity or hot water system %

Properties fitted with energy saving measures by tenure

Rising Underemployment

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Aug-2006 Dec-2006 Apr-2007 Aug-2007 Dec-2007 Apr-2008 Aug-2008 Dec-2008 Apr-2009 Aug-2009 Dec-2009 Apr-2010 Aug-2010 Dec-2010 Apr-2011 Aug-2011 Dec-2011 Apr-2012 Aug-2012 Dec-2012 Apr-2013 Aug-2013 Dec-2013 Apr-2014 Aug-2014 Dec-2014 Apr-2015 Aug-2015 Dec-2015 Apr-2016 Aug-2016 Underemployment Unemployment

Our new energy future?

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Proportion of electricity generation sourced from renewables (%)

WA Australia NSW Vic Qld NT

Renewable electricity generation by state

Growth of solar PV in WA

15% 14% 11% 7% 5% 5% 5% 83% 79% 70% 74% 63% 64% 62% 11% 8% 8% 2% 7% 19% 19% 22% 23% 26% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Composition of renewable fuels used for electricity generation (%)

Solar PV Hydro Wind Biogas

500 1000 1500 2000 2500 Jan 2016 Jul 2016 Jan 2017 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Jul 2019 Jan 2020 Jul 2020 Jan 2021 Jul 2021 Jan 2022

Generating capacity from WA rooftop solar (MW)

MW from rooftop solar projected MW from rooftop solar ci(lower) ci(upper)

WA Generating capacity rooftop solar 2016-22 WA renewable energy mix 2006-15

Reduced network payments from PV

Smoothing the duck curve?

5 10 15 20 25 30 35 40 45 50 400 600 800 1,000 1,200 1,400 1,600 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 MW\h of operational electricity load Summer Sun Light Winter Sun Light 2016 Winter 2016 Summer

Changing load patterns

5 10 15 20 25 30 35 40 45 50 400 600 800 1,000 1,200 1,400 1,600 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 MW\h Summer Sun Light 2013 2007 2010 2016 5 10 15 20 25 30 35 40 45 50 400 600 800 1,000 1,200 1,400 1,600 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 MW\h Winter Sun Light 2007 2010 2013 2016

Power Ahead trials: Horizon Power - Port Hedland

20.3 S, 118.6 E

Power plans

• like a mobile plan …
• Logic is that:
• Peak capacity is more costly so pricing

should reflect it

• Customers want more visibility on bills
• Stay within your allowance to earn

discounts during the peak period (Jan – Mar, 1pm – 8pm)

• Free app provides alerts when likely to

exceed allowance

• During trial incentives were lost
• nly if exceed target after an alert sent

Mobile Plan

Data Allowance (3GB)

Consequence if you exceed allowance

$100

per month

Calls and texts 20c per call / text

Power Plan

Peak Allowance (9kW)

Discount incentive if do not exceed allowance

$xxx

per month

Electricity used XXc per kWh

Early findings

407 households - including 41 ‘vulnerable’ in trial Anxiety about summer bills – some paying over $7000/yr (A/C) 63% vulnerable met all targets, 18% lost one incentive “Incentives and alerts worked and made sense” 40% changes usage “a lot” … learned about appliances… ..But 28% anxious about incentive – rises to 66% who went over 1 in 3 say would struggle to maintain changes (esp family members) 2 in 3 made ‘difficult’ choices, faced discomfort (e.g. A/C off)

Discussion

Are we asking low income households to bear more of the burden? Vulnerable = more sensitive to incentive and more anxious Other family members, larger households struggle, conflict… Risk of encouraging harm? Exclude some groups (aged, DV) Problem with inefficient ‘in wall’ A/C – Can utility supply in bundle? … But high rates of rental turn-over (30% per year) Options – opt in model ‘no worse off’, concessional tariff

The Energy Trilemma - Finkel

Affordable, Reliable, Clean Affordable for whom? Risk of shift to two-tiered system

Outcomes

• 1. Energy priced efficiently to deliver cheap & clean
• 2. Inform and enable customers to engage the market
• 3. Support household efficiency and productivity
• 4. Stronger consumer protection
• 5. Improve capacity to pay energy bills (incomes & concessions)

Challenges

Low income households:

• Inclusion in the new world - affordable, accessible & simple

Average consumers:

• Choice and control, consumer protection, affordability

Innovators & high density living:

• Strata planning & regs, precinct scale, ‘citizen utilities’ …

Challenges

Established utilities:

• Sunk capital stranded assets, new biz models, innovate to survive

New market entrants:

• Certainty to invest, rules of engagement, a niche

Policy makers:

• Vision for the future, transition strategy, principles