❓ Question regarding Western Power's renewable energy access regime, specifically concerns about variable top-up pricing and transparency. The Minister acknowledges the concerns and outlines steps being taken to address them, including an independent review and ongoing industry reform considerations.
AnsweredQoN 1006Legislative Council
QuestionView source ↗
I refer to the renewable energy access regime currently being implemented by Western Power. (1) Is the minister aware that the Western Power proposal is to publish a variable price to top-up energy, which will be calculated on a monthly basis, and that Western Power will not disclose how this top-up price is to be calculated? (2) Is the minister aware that the Sustainable Energy Industry Association has raised concerns that this policy of variable monthly top-up prices may make renewable energy access regimes unworkable? (3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS
AnswerView source ↗
(1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(1) Is the minister aware that the Western Power proposal is to publish a variable price to top-up energy, which will be calculated on a monthly basis, and that Western Power will not disclose how this top-up price is to be calculated? (2) Is the minister aware that the Sustainable Energy Industry Association has raised concerns that this policy of variable monthly top-up prices may make renewable energy access regimes unworkable? (3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(2) Is the minister aware that the Sustainable Energy Industry Association has raised concerns that this policy of variable monthly top-up prices may make renewable energy access regimes unworkable? (3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(1) Is the minister aware that the Western Power proposal is to publish a variable price to top-up energy, which will be calculated on a monthly basis, and that Western Power will not disclose how this top-up price is to be calculated? (2) Is the minister aware that the Sustainable Energy Industry Association has raised concerns that this policy of variable monthly top-up prices may make renewable energy access regimes unworkable? (3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(2) Is the minister aware that the Sustainable Energy Industry Association has raised concerns that this policy of variable monthly top-up prices may make renewable energy access regimes unworkable? (3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(3) Will the minister recommend that in the interest of ensuring price stability for proposed renewable energy generators, top-up prices be linked to a published electricity tariff? Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
Hon TOM STEPHENS replied: (1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(1) I am advised that the Western Power Corporation Pty Ltd board is to consider at its meeting of 20 February the proposed regime for providing access to its electricity networks by suppliers of electricity generated from renewable energy sources. The proposed regime includes two options. One option provides for Western Power to supply any shortfall in energy delivered by the renewable energy supplier, called top-up energy, at the currently published energy balancing prices. These prices have been used since January 2000 by private suppliers of electricity generated from fossil fuels. The top-up prices are meant to cover Western Power’s costs in supplying that energy. As such, the price varies from hour to hour and day to day as the load varies and the availability and cost of plant changes. This is akin to the variation in any commodity as supply and demand varies. As part of this option, Western Power has agreed to charge the top-up to renewable energy suppliers on an average monthly basis rather than the half-hourly basis that private suppliers are currently charged. The renewable energy suppliers are not subject to the same variability. Western Power is reluctant to reveal publicly the methodology it uses to calculate the energy balancing prices because it considers it will reveal too much about its commercially sensitive costs of production. However, it has agreed to have an independent consultant review the methodology for determining the prices and advise whether the methodology is considered to be fair and reasonable and whether the published prices have been consistently calculated according to that methodology. I am advised that Western Power expects to complete this review by the end of April. (2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
(2) The Sustainable Energy Industry Association has raised concerns that this variability in top-up prices will make it difficult for some people to raise finance for their renewable energy projects due to the perception that Western Power may manipulate the prices it charges to the disadvantage of the project proponent. It is considered that the independent audit described above will address this perception. In fact, this process is likely to produce top-up energy prices that are far less volatile than those experienced by power project developers in the eastern States that purchase their top-up energy from the national electricity market, where prices can fluctuate greatly. If a developer of a renewable energy project is concerned about the variability of top-up price, it can elect to use the other option offered as part of the access regime. This option requires Western Power to offer additional energy at prices directly linked to the gazetted R1 tariff, less the published time of use access charge. I am advised that not all potential developers of renewable energy projects consider that the proposed regime is unworkable. (3) The electricity reform task force is currently considering reform of the electricity industry and has been asked to make recommendations to the Government on a range of related issues, including the structure of an electricity market that will remove, where practical, impediments to renewable energy generation. The task force is aware of the renewable energy access regime that Western Power has proposed and is due to report to the Government in August 2002. Once those recommendations have been received and properly considered by the Government, a decision will be made on whether an additional special top-up price linked to a gazetted tariff needs to be developed for the renewable energy industry.
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