The Australian Energy Regulator (AER) conducts a compliance check annually to ensure that distributors comply with the distribution determination price controls and that the total revenue recovered from consumers is no more than required for a safe and reliable electricity supply. As a process, AER requires distributors to submit a pricing proposal each year for the next regulatory year. Distributors provide detailed information on network tariffs along with the eligibility criteria with respect to each network tariff.

We, at Empower, have performed a detailed analysis on network costs AER approved for distributors in Victoria which was effective from 1 January 2021. The new distribution charges will be valid for 6 months until 30 June 2020, as AER changes for the first time to review Victorian distributor rates on 1 July each financial year in line with other AER states.

The following table presents the average network price changes for various tariffs under respective distributors*.

The Australian Energy Regulator (AER) conducts a compliance check annually to ensure that distributors comply with the distribution determination price controls and that the total revenue recovered from consumers is no more than required for a safe and reliable electricity supply. As a process, AER requires distributors to submit a pricing proposal each year for the next regulatory year. Distributors provide detailed information on network tariffs along with the eligibility criteria with respect to each network tariff.

We, at Empower, have performed a detailed analysis on network costs AER approved for distributors in Victoria which was from effective 1 January 2020. The following table presents the average network price changes for various tariffs under respective distributors.

The Australian Energy Regulator (AER) conducts a compliance check annually to ensure that distributors comply with the distribution determination price controls and that the total revenue recovered from consumers is no more than required for a safe and reliable electricity supply.

We, at Empower, have performed a detailed analysis on network costs AER approved for distributors in Victoria which was from effective 1 January 2019. The following table presents the average network price changes for various tariffs under respective distributors.

Think about it….you may have used hot water for washing dishes, hands, clothes, sterilizing equipment or cooking. Now, how much do you think it costs on your energy bill? 5% ,10% or 15%? Unsure? Don’t worry, you are not alone, most businesses would struggle to answer this question. Hot water costs can contribute up to 21% of your electricity bills^1,2 and with the use of conventional hot water systems, you are literally flushing your money down the drains, when you could be using it to reinvest in your business.

Sustainability Victoria suggests that you can save up to 74% by switching over from conventional electric storage hot water systems to heat pump and 39% from gas hot water systems³. To find out more, we met with Ben Cole, distributor for Sanden heat pumps. Ben talked about their new range of hot water heat pump systems which are currently the most energy efficient on the market. Sanden Eco Plus Hot Water Heat Pump System employs ozone friendly -R744 CO₂ refrigerant technology that consumes 1kW of electricity to generate 4.5kW of heat (COP~5) which can save up to 80% of your conventional electric storage system, making it the most efficient system in the market, clearly beating the industry averages identified by Sustainability Victoria. This also works seamlessly with Solar PV as it draws only 0.9kW of power.

On top of that, As the Sanden system is highly efficient, you will receive the highest amount of Small-Scale Technology Certificates (STCs) which can be used to discount the purchase price. This is an absolute no brainer as Sanden provides you with the rare trio combination: saving money, protecting the environment and a stable on demand hot water supply.

Now for the boring bit, if you want to understand more about how heat pumps work, keep scrolling down.....

Heat pumps are an efficient storage water heater that draws heat from air, water or ground to heat water. The most common types are air-sourced heat pumps. An air-sourced heat pumps absorbs heat from surrounding air and transfer it to heat water in the storage tank. They run on electricity but is about three times more efficient than a conventional electric water heater. It uses less energy  as it just transfers heat rather than generating heat. Instead of using an element to heat the water directly, electricity in heat pumps is only used to run the compressor and to move refrigerant around the system which absorbs heat from the surrounding and transfer to the water.

References

1.  http://yourenergysavings.gov.au/energy/hot-water/about-hot-water

2.  http://www.energyrating.gov.au/products/water-heaters

3.  http://www.sustainability.vic.gov.au/You-and-Your-Home/Save-energy/Hot-water/Hot-water-running-costs

The University of Melbourne, ACCC chair Rod Sims, Grattan Institute’s Tony Wood and Dr Leslie Martin from The University of Melbourne’s Department of Economics and the Centre for Market Design presented to an audience of energy enthusiasts and professionals the state of National Electricity Market; problems and potential solutions. The discussion included:

·  ACCC report and its recommendation to government on solutions.

·  Grattan institute Report on causes for current high wholesale prices.

·  Retail price and influencing factors

Electricity prices have increased by 56% in the last 10 years and today customers are paying more than they should due to excessive regulated network asset base; one proposed solution on ACCC’s report is to write down the excessive regulatory asset bases in Queensland, NSW, Tasmania and remove the network tax in Victoria.

Excessively generous solar feed-in tariffs have resulted in customers without solar panels subsidizing  excessive benefits for those with solar panels. ACCC’s report recommends government to take the cost of feed-in tariffs in its budget. However, this cost will ultimately will come from tax payer’s money. So, a balance in equation would be required.

Considerable  market power in generation has led to higher wholesale prices. ACCC recommends limiting the future generation market share to 20% for any entity, creating an environment for a competitive market in electricity generation and government to provide price support for generation by small players.

To meet the Renewable Energy Targets (RETs), providing high subsidies for generation assets which may not be able to provide energy when the markets need it, has added to the increase in wholesale prices. A properly designed National Energy Guarantee (NEG) scheme can do the job.

Tony Wood discussed the Grattan Institute’s report on the causes for increase in wholesale prices and concluded that:

·  Increase in gas prices has resulted in increase in the price of all generation.

·  The closure of Hazelwood and Northern power plants added to the impact in supply, increasing the prices.

·  Gaming: Generators can create artificial scarcity resulting in market to respond on spot pricing through rebidding. Gaming is against the intent of the market which creates profitable outcomes for some players.

Dr. Leslie with her team of PhD students carried out a survey where they hired actors to call  to switch retailers. The study concluded that:

·  Retailers offered cheaper rates when customers said they want to switch retailers rather than when they said they are moving to a new house.

·  Large variation in prices

·  Complex bills

·  Marketing based on discounts

Simpler and easy to understand bills should be provided by retailers to customers and  default tariff should be set by AER to not let the retailers market based on discounts.