Electricity could be cheaper and cleaner if regulations blocking local energy production were removed, the City of Sydney has told a national inquiry into electricity network regulation.
“Trigeneration networks could solve peak power demand problems more cheaply and efficiently than continually upgrading electricity networks and building remote, inefficient coal or gas–fired power stations,” said the City’s Chief Development Officer, Energy and Climate Change, Allan Jones.
The submission to the Productivity Commission outlines the City’s plans to install Australia’s first major trigeneration network in Central Sydney to supply City–owned and private buildings with low–carbon electricity and zero–carbon heating and cooling.
The network would run on natural or renewable gases and aims to be twice as energy efficient as coal–fired power stations, which produce 80 percent of carbon emissions in the local government area.
“Consumers face another rise in electricity prices, mainly due to network charges – the cost of upgrading the poles and wires to bring more power long distances to the city, and to feed growing peak power demand from electric air–conditioning,” Mr Jones said.
“Network charges now make up half of average electricity bills in NSW and are expected to rise to 60 percent by 2014.
“Producing electricity locally and more efficiently, as proposed for the City’s trigeneration project, would help reduce the impact of these network costs on electricity prices.”
The City’s submission says that in NSW electricity networks are undertaking capital expenditure of $17.4 billion over the five years to 2013–14. This represents $2,400 per person and is an 80 percent increase on the previous five–year period.
The proposed $440 million trigeneration energy system could supply 70 percent of electricity in the local government area and reduce carbon emissions by a third by 2030, based on 2006 levels.
The submission says Sydney’s trigeneration network could achieve savings in deferred electricity network costs and new power station capacity of $1.5 billion by 2030, according to a study by the University of Technology.
“The electricity market needs to be opened up to competition from small–scale energy producers and give consumers a cheaper, cleaner alternative, to coal–fired power,” Mr Jones said.
The City is in final contract negotiations with Cogent Energy, owned by Origin, to jointly finance, design, build, operate and maintain the first two stages of the trigeneration network. Final agreements are expected to go before Council in October.
The City’s buildings would be the first to be supplied with low–carbon energy by 2014, including at the Green Square urban development and the Prince Alfred Park Pool, followed by Town Hall House and Sydney Town Hall.
Mr Jones said the regulatory barriers to the City’s trigeneration project would be partly overcome because Cogent Energy has an electricity retail licence and can trade electricity directly to customers across the local distribution network – outside the wholesale electricity market.
However, the City’s submission draws attention to the removal of the regulatory barriers to decentralised energy in Britain, and how the electricity rules were changed as an example for Australia to follow in order to create a level playing field for small–scale energy generators and suppliers.
