South Australians spend over $2bn per year on electricity. Households and small business account for approximately 60% of that expenditure and are increasingly recognising that they can generate the same amount as their electricity needs each year by installing rooftop solar energy. In other words, we all live close to a local energy source that is extremely affordable compared to grid energy.
In addition to our expenditure on electricity, we spend a similar amount on transport and heating energy – and there are increasing opportunities to electrify these two energy needs.
How much of this expenditure could be returned to energy consumers – with a system that is cheap to run? with good use of the energy assets we have invested in? with further help to reduce consumption and to use energy at the cheapest times?
How much of this expenditure could be returned to communities – with investments made by local investors rather than remote shareholders? With expenditure supporting local jobs?
Some estimates suggest 30%. All parties are focused on reducing energy costs but none have really explained how they will get the system operating in the most effective manner. They offer pieces of the puzzle – a community owned electricity retailer for the low income sector, integration of demand management and storage into market operations, a distributed virtual power plant.
With a potential prize to South Australians of over $500m – community energy deserves stronger consideration.
There is an opportunity for each party to spend some time exploring the ramifications of locally scaled energy – its impact on affordability and local economics, its improvement to local energy security, resilience and energy self-sufficiency.
There is an opportunity to support communities to develop their own solutions, increasing the likelihood that fairness, local jobs and local investments will become priorities.
There is a clear case for government support. Communities cannot mobilise resources at the pace of the private sector and so are the poor cousins in the race to profit from renewable energy. Communities are concerned with delivering public goods, the unprofitable benefits that come from pursuing affordability for all, local employment and skills enhancement.
What support does community energy need?
- Funding to get started. Initial funding can bring communities together to plan and provide seed capital for projects. It can leverage 20x or more in capital from small investors and leverage enormous amounts of productive community volunteer time.
- Community-based institutions such as community energy hubs.
- A retailer focused on delivering customer and public benefit in order to set a standard for the whole market and to provide a strong collaborator for community projects.
- Trials and examples that prove the cost-effectiveness of the local energy model and demonstrate the necessity of rules changes in the market. Championship for such rule changes.
- Local price signals and incentives to support investments and behaviours that improve the utilisation of local energy assets and improve energy security.
- Unbiased advisory services that help consumers reduce bills, navigate the complexity of new products and shifting markets and identify community-benefit initiatives. …used to build skills, knowledge and capacity within each community.
- Commitments to deliver local community benefits for every new energy project and fair democratic processes to empower community voice and provide opportunities for local control of energy resources.
- Opportunities for local investors and small investors to invest in new energy projects.
- Flexibility in rule making and design to support communities in the myriad of ways they might choose to implement fairer systems and support to the most vulnerable members in their community.
- Subsidies at the community level to re-engineer local systems for improved energy security – with a focus on those communities most poorly served at the moment.
- A focus on skills and training to enable local businesses to participate in the energy transition and local procurement policies to ensure a substantial proportion of investment is captured locally.
We have an election coming up in less than 10 days and our emerging community energy sector has co-signed a letter to each of the major parties asking for stronger consideration of community energy.
This blog will publish some of the comparisons between parties, published policies, political promises and from the responses we receive, so please check in before you head to the polls on March 17.
You can view our letters here: