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29 comments on Big boost for solar rebates in South Australia
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Interesting stuff, SP, thanks.
Certainly I believe that every system will inevitably be imperfect. This comes from looking at history where the guiding principle of everyone involved seems to have been, "well, it seemed like a good idea at the time." Yet we muddle along :)
I'm not really keen on the idea of limiting where and how people use their power. It reminds me of the water rationing thing - I can have twenty baths a day, but can only water my vegies twice a week. Do we just want to abolish hosing down driveways, or limit total consumption? It'd be more sensible to charge according to use, progressively. Likewise, with energy.
Just as we have a progressive income tax, we ought to have progressive energy charges, whether by their retail rate, carbon taxing or whatever. If we decide that we want to have household energy use drop from its average of 14kWh/day to (say) 7kWh/day, then we just price it accordingly - the rate goes way up after 7kWh/day.
We could do other things like offer interest-free loans, payable on your power bill, to pay off installation of solar panels on your home, etc.
There are a zillion ways to do it... I don't think we need worry whether the consumer used 10kWh on their AC, on a home theatre system, on a life support system, or hydroponics for their homegrown... vegetables. Who cares, really? What matters is the total usage.
I couldn't agree more with this.
Calls for rationing drive me mad - no one is ever going to voluntarily agree to this (Well - no one outside a very small minority) - the only time rationing ever seems to work is during wartime, when people aren't given any other option and there is a strong social incentive not to complain about it.
Well, according to the ABS, in 2004 there were produced 564.7 Mt CO2e (table 24.20), 27,400kg per Aussie.
So a carbon tax of $0.01/kg could raise $5.6 billion. That's $274 per Aussie, not a big deal given that a lot of the carbon-intensive spending is discretionary. It'd add $0.028/lt to the price of petrol, about $6
to the price of a Sydney-Melbourne round trip flight, $0.013/kWh to the price of coal-derived electricity, and so on.
What I'd probably do is to have the carbon tax be something like $0.05/kg, but with rebates for people on less than full-time minimum wage equivalent.
If you wanted to do it through retail stuff progressively, you could just do it as I said earlier, set some goal household power consumption, and charge like a wounded bull for amounts above that. I'd have no "account charge" or "service charge" at all - you use nothing, you pay nothing. Account charges are the "corkage fees" of the utilities world, complete bollocks.
Something like,
- no service charge
- the first kWh is $0.22
- each kWh after that is charged at another $0.02
So you'd get,
so that if you use 5kWh or less, you pay less than you currently do. If you use the average 14kWh/day, it works out to $2.10 more a day, or $189 a bill. It starts getting crazy in the 20s of kWh daily.
As usual there'd be discounts for people living on low incomes, etc.
This rate would apply only to power got from fossil fuels. If you got your power from wind or solar, you'd pay whatever rate they charge.
Carrot and stick, mate :D
Not quite. There is a cost for providing and maintaining that infrastructure.
Yeah, like the cost of the waiter's corkscrew.
The costs should be rolled into the per kWh cost; if you use less power, you put less strain on infrastructure, if you use none at all you put no strain.
There's no account or service charge for water. Does water require no provision or maintenance of infrastructure?
For all discretionary consumption: Use nothing, pay nothing; use lots, pay lots.
A certain amount of utilities consumption is non-discretionary - but only maybe one-tenth to one-fifth of the average use. The rest we just piss away.
So I guess I shouldn't have to pay for those roads I don't drive on? Should I pay for those parks I don't visit? Or maybe I shouldn't have to pay for that hospital until I arrive at emergency. And I think we know how well THAT system operates.
I live on rainwater, so I don't know about water service fees. But I do know (pers comm) that the main activity of Melbourne Water is infrastructure provision and maintenance. The charges for water are to cover this cost... so maybe you are right and they roll it all up into that.
Perhaps consumption of water is less variable than consumption of electricity... so electricity companies charge a higher service connection fee to "level" that variability out...?? maybe?
I think your approach is a tad extreme.
A service has been provided to you even if you don't flick the switch. That service is the ability to flick the switch at any time of your choosing. You can quibble over the price... but it is a real service.
And I think it is more significant than your analogy of the waiter and the cork screw.
Can you build a sub station?
I said, "all discretionary consumption."
Roads are partly funded by the general revenue, since some amount of roads are necessary regardless of an individual's chosen mode of transport; but they're mostly funded by vehicle registration and fuel excise, so that the amount you pay is more or less proportional to how much you use the roads.
Parks give people pleasure whether they visit them or not, since you pass by them on your way to other places. But in any case, parks are in general funded by local council rates, and the spending of rates is generally determined by a council of about nine elected representatives sitting in a room with 10-100 members of the public - and those 10-100 people are usually regular attendees at council meetings, and their voice is decisive in allocation of spending; so that if your payment isn't proportional to use, at least you have some say in it if you can be bothered to go to the meetings.
Hospital treatment is not discretionary consumption.
Water consumption is very variable across the country. Just state to state we see hre that Victoria has a 81kl per capita domestic water consumption, while WA had 180kl. So we see a factor of two variation from state to state. From place to place we see a variation of a factor of ten, from about 50lt/day per person in some towns in far north Qld, to 500lt/day per person in western Sydney, much of Perth and so on.
Historically the power service fee comes from the State Electricity Commission days, when the account fees were set aside for infrastructure and paying off the loans the government had to take out to build the power stations, while the per unit used fees were used for maintenance, fuel and so on.
Nowadays we have a three-tiered privatised system. All the infrastucture remains owned by the government, but is leased out to private companies. We have the producers (run the power plants), the distributors (buy the power off the plant operators, sell it to retailers), and the retailers (buy the power from the distributors, sell it to the public).
There's some overlap as some of the retailers invest in generation, like Origin building its own wind turbines. But basically we have this three-tiered system.
The government sets wholesale and retail prices, so if you're at all competent where you really want to be is as a distributor, all they do is buy and sell units of power, produce nothing... If you're incompetent you don't want to do it, you might stuff it up and the retailers won't have enough to sell, someone gets a blackout and then the state government steps in and takes over.
Basically we need the account fee to keep all those useless middlemen employed.
Although in theory I think limiting consumption has merits, and we agree that in practise its not as politically acceptable... I did not suggest this.
All the price mechanisms suggested rely on the idea of optimal allocation of resources thru the free market. I'm not totally convinced this happens automatically... just as I'm not convinced that Big Govt has the solutions.
I do think we need to pay some attention to the uses of the power.
An AC Airconditioner affects the system in a different way than the home theatre system... the former being a combination of reactive and resistive loads ( 1, 2, 3), whereas the latter is mainly a resistive load.
Allowing everyone to have all these electric motors (Air Cons) results in a different allocation of resources by the power generator.
Monetary measures do not (necessarily) take this into account, as once reduced to a monetary unit, these important differences in system detail are minimised.
Mr Odum would have something to say about this.
Well, I think we can learn from the experience with trying to reduce water consumption.
Melbourne went for restricting types of use, and public education, and reduced domestic water use by 25%.
Brisbane introduced a tiered pricing scheme, and reduced domestic water use by 50%.
I don't see why electricity should be any different. Price is a strong market signal, so the economists tell us.
Two points to consider.
The use to which water is put at the consumers end has little bearing on the processes used to clean the water... as all water in public systems is treated to drinking water standard (even though a lot of the water is then flushed down the loo or sprayed on the garden). This is not directly comparable to my point about reactive power and AC motor use... where the process of consumption has an immediate feedback effect at the power plant.
Secondly, along side your percentage figures, we need to see absolute consumption values. Comparing percentages is meaningless otherwise.
Melbourne may already have been at a lower absolute consumption level (I don't know), the "easy saving" may already have been made.
I agree with the general thrust of your argument/proposals. A tiered system is good... but it's not everything, and you need to be careful of details that have systemic effects. That's all.
You can adjust price and thus consumption without any new infrastructure; all this DC lighting stuff requires new infrastructure.
In absolute figures per capita daily, from 1995 to 2005, Brisbane went from 500 to 250lt, Melbourne from 290 to 230lt. I dunno about "low-hanging fruit" - Brisbane is a lot hotter and more humid than Melbourne, and you commonly find domestic water use is about double in summer what it is in winter, whatever city you're in.
The national average in Aussie cities is 253lt. And that's heaps. Our household uses 65lt per person daily, since we reckon that every drop counts (warning: contains useful advice which you're a lazy drongo if you don't follow).
I thought it was clear that I was suggesting the minimal change that utilised the existing wiring, without the expense of a complete PV system.
What is the point of your pricing structure if not to facilitate a change to a more sustainable system? A change that will require new infrastructure.
In my system, you raise the funds first and then you build the infrastructure. And the method of raising funds encourages people to consume less, so that buys you extra time to build the infrastrcture.
In your system, we build the infrastructure first and charge for it later, and we have to build it all ASAP.
I prefer scenarios where we get to start with more money and time than we need. We're dealing with big government and corporate projects, after all - and they always take more money and time than you expect, it's nice to have some leeway.
Again, you are misunderstanding what I proposed.
I am trying to think of how we evolve our existing infrastructure at the most appropriate scale; in this case only considering domestic lighting. Where did you get the "all at once" idea from? I suggested new houses at first, and older houses (where practical) as the lighting circuit in a house is separate from the power outlets, stove and hot water. You would not need to rewire the house. A small solar PV system could easily charge a battery bank to power the new generation of LEDs (etc) for a nights lighting.
I like to think that a scheme like this achieves more in the long run than just reducing consumption...
What monetary system you put in place to encourage the adoption of such a scheme I left vague.
But, I would argue you must have some idea of the infrastructure you want before you start out raising the money... aren't we too far down the track to just "muddle through" on this one... is there enough time for "the market" to pick a winner through successive iterations of business successes and failures?
And would it really matter if some of these changes were paid for by the Federal Govt?
We could take a billion away from buying crap second hand weapons from our great saviour and put it into something really useful!
Consider it a national investment in reducing a part of our CO2 economic externality.
By "muddling through" I didn't mean "leave it to the market." I meant the usual and actual combination of market, government, luck and so on.
"Leave it to the market" means "do nothing and watch CEOs crash everything and go back to their home countries with record bonuses."
Fair enough... :-)
We could do with some luck.
But then, the only trouble with luck is that those in power at the time attribute it to their own skill...
Yes but that's only a problem if your country is trying to conquer a good chunk of a continent or something.
"The Iraqi people understand what this crisis is about. Like the people of France in the 1940s, they view us as their hoped-for liberator." - Paul Wolfowitz, March 2003
Aside from that it's a matter for the history books to sort out. And in the end I don't give a damn what history says or who takes the credit so long as it comes out alright.