An over-investment in poles and wires means that ‘network charges’ on Australian electricity bills are among the highest in the world. But by charging these high prices, have the networks created conditions that will lead them to be undercut by new solar technologies?
A few years ago, electricity in Australia was cheap. Now we pay some of the highest prices in the world.
This dramatic increase has been driven not by the actual cost of the energy you use, but by a massive spike in network charges. This has been caused by an over-investment in the poles and wires, otherwise known as ‘gold-plating’.
‘The long and the short of it is the networks are still seeking to milk the system for what it’s worth. I don’t think there’s been the sort of realisation that should have occurred, taking account of the extraordinary expenditure and profits of the businesses’, says Bruce Mountain, director of Carbon and Energy Markets Australia and a longtime advisor to electricity regulators around the world.
In driving up their charges, the networks have helped make Australia the best market in the world for solar storage—the very thing that will enable network customers to get away from using the grid.