Reforming Electricity Market Rules

For years the City has been pushing for a system that makes it easier for residents and businesses to access clean power that is generated and used locally.

We are now teaming up with the Property Council of Australia and the Total Environment Centre to ask the Australian Energy Market Commission (AEMC) to change the rules that govern the electricity market.

Local generation of power is a win for the environment, businesses and consumers. Across Australia, more and more businesses and households are generating and exporting local electricity. Local generators range from office buildings with generators in the basement through to sugar mills making electricity from waste heat and residents with rooftop solar installations.

More than half the cost of electricity bills for both households and businesses is due to transporting power across long distances from remote power stations. Local generation saves money for the producer and the broader community by bringing down the cost of electricity transport.

Unfortunately, under current rules, full network charges are still payable if an office tower with its own generator sends surplus power to the building next door or across the street. This fails to recognise the savings made from not using the long-distance networks of poles and wires.

The proposed rule change would ensure local generators receive a credit for surplus power exported to the grid which reflects its economic value - increasing the financial return for local energy projects, making the electricity network more efficient and lowering electricity prices for all consumers over time.

Last week I toured the recently completed second stage of the Central Thermal Plant (pictured above). The plant generates hot and chilled water for the Central Park precinct, whilst generating its own electricity with a natural gas fired engine. This provides heating and cooling for 2,100 apartments and 50,000m² of office and commercial space for 11 high rise buildings. You can read more about it here.

The AEMC, which manages the rules in the national electricity market, will consult with industry, business and the community and review our proposal. If the AEMC accepts our proposal, projects like the Central Thermal Plant would be viable on a larger scale and cheaper, cleaner electricity, produced locally, would be a possible CBD-wide.



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