Retailers seek cost relief to offer three hours of free power to all
“If all you do is make an artificial compromise at the retail level… then all you’re going to do is break the market,” he said.
Officials from the Australian Energy Regulator and the federal energy department are seeking feedback from industry participants, including on the design of tariffs, and recognize the need for retailers to make a reasonable return.
Bowen reassured retailers that the government would “discuss the issues” with companies, but promised consumers would be prioritized. With daytime wholesale prices regularly trading at $0 or falling into negative territory as Australia leads the world in per capita uptake of rooftop solar panels, energy retailers were often “not paying for that energy… and I don’t think consumers should be paying energy companies for that,” he said.
‘We may face a situation where it will be more expensive for retailers to cover these costs at their leisure.’
Amber Electric co-founder Chris Thompson
Only a few retailers, including AGL, OVO and Snowy Hydro’s Red Energy, offer some customers free access to electricity mid-day on certain occasions. But many are increasingly introducing schemes built around cheaper daytime tariffs for powering appliances or charging electric vehicles, and financial rewards for storing excess rooftop solar energy in batteries that can be exported to the grid at night.
Flow Power CEO Matthew van der Linden said the Solar Sharer offering risked being a destabilizing intervention in a market where customers and providers were already pulling in the same direction.
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“I would like regulators and governments to look at ways to improve the market factors that are already in place and find a way to reward customers who step up and participate,” he said.
Amber Electric, a retailer that allows customers to buy and sell electricity at fluctuating wholesale rates rather than fixed rates, said the ability to take advantage of much cheaper daytime electricity rates is what it has based its business on for the past seven years.
“It’s great to see the government moving in this direction,” said Amber co-founder Chris Thompson.
But he said there were some “question marks” about how the Solar Sharer plan would be implemented, including whether it would be paired with significant changes to network tariffs and whether those reforms could be made in time for the scheme’s launch date in July next year.
“We could end up in a situation where it’s going to be more expensive for retailers to cover those costs at their leisure,” he said.
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