In addition to the inquiry into electricity pricing announced in April 2015, the Queensland Government recently announced an inquiry into solar feed-in tariff pricing in Queensland with an Issues Paper for each inquiry to be released shortly.
The electricity pricing inquiry will cover the entire electricity supply chain and consider a number of issues, including:
- - the costs and benefits of retail price deregulation, and whether the proposed market monitoring and consumer protections will provide sufficient safeguards to allow the removal of price regulation;
- - Government election commitments, including increased penetration of renewable energy (particularly solar) and pricing issues associated with the mergers of electricity networks and generators; and
- - network tariff reform, including the potential outcomes for vulnerable customers such as low income households.
To support the renewable energy sector, the Government has set a target of one 1 million rooftop photovoltaic installations (or 3000MW) by 2020. The aim of the inquiry into solar feed-in tariff pricing is to determine a fair price (or fair prices) for solar power that is produced at the home or business premises of a ‘small customer’ and exported into the electricity grid (both National Energy Market (NEM) connected and isolated grids).
A fair price for exported solar energy:
- - is to be determined based on an assessment of public and consumer benefits from solar generated electricity; and
- - must not have an unreasonable impact on network costs for non-solar users.
When a solar power installations on small customers’ premises generates more electricity than is required by the customer, - resulting in the surplus electricity being exported into the local electricity grid - payments to the customers for their exported solar energy are known as Feed-in tariffs (FiTs).
FiTs are currently available in different forms for small electricity customers (those consuming less than 100 megawatt-hours of electricity per year) across Queensland. In south-east Queensland (SEQ), FiTs are offered by participants in the competitive retail market, with no minimum amount mandated. There are currently six retailers in SEQ offering FiTs which range from 6 – 12 cents per kilowatt-hour.
In regional Queensland the mandated FiT is determined annually by the Queensland Competition Authority, and is paid by Ergon Energy’s retail business, or by Origin Energy for customers connected to the New South Wales electricity network operated by Essential Energy.
Following consideration of the submissions and consultation with stakeholders, the Commission will release an interim report for each inquiry. A final report for each inquiry is due to be delivered to the Queensland Government within 10 months of commencement.