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Electricity industry scared of solar and batteries

 We understand that the electricity sector and EECA do not like the choices its customers are making which have been caused by the 150% increase in power prices they have imposed on families over the last 20 years. But, in New Zealand, a pioneer of fair and open trade, we had hoped that companies and government agencies would respond to competition and innovation with better service, lower costs and increased efficiency.

In the last few months Contact Energy, Meridian Energy, Mighty River EECA, Unison and Powerco have worked together to commission the first in a series of reports that claims increased solar means increased CO2 emissions from the electricity sector. Which, of course, makes no sense.  Further, the report argues, a higher price on carbon will result in more carbon emissions - clearly nonsense. 

This is the same EECA that just a few years ago was a strong supporter of the solar industry and it is the same EECA that has no renewable energy expertise on its board but has two from the fossil fuel sector. It is the same Meridian that, in 2012, slammed the Parliamentary Commissioner for the Environment for producing a report that was anti solar. Indeed, in Australia, it is the same Meridian that promotes power for the people by supporting solar to recruit customers for Powershop. And, of course, this is the same Meridian Energy that, on the one hand, claims to be 100% renewable and, on the other, lobbies to have New Zealand’s coal-fired power station remain in operation.

In contrast, the fossil fuel company Shell gets it. The head of Shell recently said; “I have no hesitation to predict that in years to come solar will be the dominant backbone of our energy system, certainly of the electricity system”. Solar will be a key part of getting to 100% renewable energy generation, which all countries in the world signed up to in Paris last year.

So why has the PCE, Meridian Energy, EECA etc got it wrong? They reckon as 80% of our electricity is from renewable sources that smart, clean technology will only encourage fossil fuel generation and result in greater CO2 emissions. Truly bizarre.

The truth is that batteries shift power generated by solar during the day to meet night time demand. Hydro shifts power between seasons. That is why solar, batteries and hydro fit well together and reduce the nation’s carbon footprint. As Meridian said in 2012, criticising the misguided Parliamentary Commissioner for the Environment views on solar; “In simple terms hydro can be used when the wind doesn’t blow. The same applies when the sun doesn’t shine”. Simple. 

So, why this irrational and quite ridiculous attack on solar and batteries? The answer is that the electricity industry fears a smart grid, clean future. This future is the nightmare Kodak-digital camera death scenario for the electricity industry. 

Solar generation is becoming cheaper and, in a few years, will be roughly equivalent to the wholesale price of electricity in New Zealand.  Already it is cheaper than the cost of delivered electricity (i.e. the cost of producing and delivering electricity to your home) making solar an affordable option for all Kiwis.

Solar electricity will be generated locally, on houses, meaning much of the grid and distribution system will be used less.  And, household or distribution level batteries will change the game even further, allowing electricity to be stored and released into the grid when needed.

Houses will use the existing electricity infrastructure to “top up” their battery system. They will use electricity when it is the cheapest to produce and store it in their home batteries. They will use the power at peak times or sell it to neighbours and they will charge their electric vehicles using solar power and fuel their cars for free, on sunshine. All this may not involve much use of the national grid because, increasingly, electricity will be generated and sold locally.

The implications of this change in electricity production are huge. Historically our utilities have had a fundamental financial incentive to ‘build more to profit more,’ which with the price of solar now below the retail price of electricity conflicts with the public interest of building and maintaining an affordable grid. This financial incentive model is a vestige of how utilities have always been regulated, a model originally constructed to encourage the expansion of electricity access.

The bottom line is that the existing players in the electricity system could lose out financially, but if they succeed in stopping solar and clean technology we will all be the losers.

Let's be the generation that embraces clean technology and frees our nation from the tyranny and expense of fossil fuels and high energy costs. Let's turn this time of crisis, triggered by climate change, into a moment of opportunity for innovation, and job creation, and an incentive for businesses that will serve as a model for the world. Let's be the generation that makes future generations proud of what we did, rather than opposing the creation of a more affordable clean energy future for our nation.