At Flow Power, we believe that the National Electricity Guarantee could provide a great opportunity to reconnect customers to the signals of the market – as long as we get the details right.
When we prepared this submission, we asked our customers to give us their thoughts on the issues raised by the NEG. They gave us great insights into how we will integrate low cost renewables and demand response into the reliable power system of tomorrow. Some of the comments included:
- Knowing the forecasted price for the week is nice but of little value since the price can vary by $’000’s every 5 minutes. When coupled with the fact that electricity can be consumed at a given price for a five minute period but charged at a higher price for the 30 minute interval because prices spiked late in that interval it means that pricing integrity goes out the window. Innovation in demand response is likely to improve reliability but doubtful whether it will reduce costs.
- Businesses such as ours need lower electricity costs overall and better pricing certainty as it is extremely difficult to compete internationally with our current system.
- A guarantee that enshrines large incumbents at the expense of competition will lead to worse outcomes in the long run. We would favour policy certainty that encourages new investment as the energy sector transitions to lower emissions technologies.