Endeavour Energy Annual Performance Report - Parliament of New ...

03
OUR
OPERATIONS
A sAFe, relIAble and eFFICIent network
Solar feed in tariff scheme
On 1 January 2010 the NSW
Government introduced the Solar
Bonus Scheme to implement a 60
cent per kWh feed-in tariff for roof
top photovoltaic (PV) systems and
wind turbines up to a maximum
of 10 kW.
In creating the Solar Bonus Scheme
the Government had a number of
objectives including encouraging
and supporting those who want
to generate renewable energy as
a response to climate change and
to increase public exposure to
renewable energy technology to
encourage the whole community
to respond to climate change.
The Scheme was limited to
customers with an annual electricity
usage of less than 160 MWh. For
eligible small retail customers, this
feed-in tariff was credited on a gross
metered basis.
The credit is paid by distributor
businesses to customers via their
retailers. The recovery of the costs
associated with the Solar Bonus
Scheme commenced on 1 July 2011.
The Scheme rapidly gained interest
from the public leading to higher
than expected subscription to it
and ultimately resulting in changes
to the Scheme on 27 October
2010 following the outcomes of
a review of the Scheme’s first six
months of operation. Two of the
primary changes to the Scheme
were the cessation of the previous
60c per kWh rebate to be replaced
by a 20c per kWh rebate, and the
introduction of a target ‘cap’ for
NSW of 300MW of small scale solar
PV generation capacity. The revised
Solar customers connected
Scheme provided for the Minister for
Energy to close the Scheme to new
entrants once the ’cap’ of 300MW
of generation capacity was installed
and connected to the energy grid.
On 1 July 2011, the Minister, by way
of notice in the Gazette, closed the
NSW Solar Bonus Scheme, citing
that 300MW of small scale solar PV
had been installed and connected
in NSW.
The Government also provided
transitional amendments to
the Electricity Supply (General)
Regulation that allowed customers
who had made an application prior
to 29 April 2011 to continue to
connect a generator and receive the
Solar Bonus Rebate notwithstanding
the closure of the Scheme.
The Government has also asked the
Independent Pricing and Regulatory
Tribunal (IPART) to review certain
actions to manage costs arising
from the installation of small scale
generators and their impact on
electricity prices and taxpayers,
while continuing to support a
sustainable renewable energy
industry in NSW.
Following the conclusion of this
review, Endeavour Energy expects
that minor administrative and
implementation issues will need to
be addressed.
Endeavour Energy has absorbed
the substantial implementation and
administration operating costs of the
Scheme. As at 30 June 2011, these
costs are estimated to approach
$3.9 million over the life of the
Scheme. These costs will be funded
through efficiency initiatives so
customers will not be impacted by
the additional costs imposed on us
for administering the scheme.
The table below shows the
breakdown of customers currently
connected and those predicted
to connect as of 3 July 2011. If all
customers enter the scheme as
expected, a total of 47,362 customers
will be involved, representing a solar
generation capacity of 105.9MW.
In response to defects identified
as a result of the Department of
Fair Trading inspection regime
on existing solar installations,
Endeavour Energy has taken the
lead in developing an agreed
minimum inspection regime for
new solar installations by NSW
electricity distributors.
Demand management
One way of reducing the cost
of network management is to
investigate demand management
alternatives to network
augmentation for specific capital
expenditure projects.
Where feasible, Endeavour Energy
investigates and implements
projects that modify demand as an
alternative to spending money to
upgrade the network. Projects may
include negotiating with high-use
customers to move peak loads away
from the network peak conditions
or implementing projects to reduce
overall usage in those peak times.
Endeavour Energy recognises there
is an imperative to ensure electricity
is delivered reliably, and in an
energy efficient and environmentally
responsible manner, which is why
we evaluate demand-side as well as
construction options in the network
planning process.
60 cent per
kWh rate
20 cent per
kWh rate
Total
Customers currently connected 37,294 4,712 42,006
Generation capacity 84.1MW 10.0MW 94.1MW
Approved customers applications yet to be connected 299 5,057 5,356
Generation capacity 1.5MW 10.3MW 11.8MW
24