I just love it when the electricity industry goes on the attack. It tells me that the great energy transition is making progress.
In the last 24 hours, we have seen no less than three separate reports highlighting the palpable desperation that the incumbent industry faces.
Taking out the number one position on the “Solar is to Blame” charts is the inimitable AGL chief economist Paul Simshauser.
Clearly, he’s a smart bloke and doesn’t mind voicing an opinion or two. I can relate to that (the second part). However, coverage of his latest theory about why solar is the root of all evil in today’s Financial Review actually made me feel a great sense of relief that things are going to change and the future (smart grid and more open access for solar) is much closer than I thought.
Whilst Simshauser uses his usual approach of being a very clever Professor and providing some advanced economic analysis to argue his case, it’s impossible to miss a distinct change in his language that for me at least, smashes the credibility of his entire argument. Even to the uninitiated, his story comes across as a desperate and thinly veiled, self interested, outright attack.
For a utility (let alone one who has been named as one of “the dirty three“) to claim that solar support is “… a scam but it’s hidden,” and “This is something that will remain a big problem and get more inequitable rather than less. This is a problem that needs to be fixed” just reeks of hypocrisy. I can’t think of a simple (non electricity utility person) in Australia who would either believe or feel a modicum of sympathy for a mega retailer claiming that things aren’t fair for them. Sorry Professor, but this is blatant and transparent self interest clumsily disguised as you caring for consumers and it doesn’t wash on anyone.
Even more bizarre is that at the same time as his extraordinary and vitriolic attack on solar users (many of whom AGL Solar actually sold systems too….) only a week ago, we saw AGL’s Mark England giving a speech where AGL said ” it plans to lead the growing charge into household solar power, batteries and smart meters”.
Really, you guys should do lunch and get your story straight.
(Seriously – If you do it in Sydney and let me come along, I’ll pay)
Ironically, Simshauser’s wafer thin claims that solar is the root of evil overlooked a number of key issues, some raised by the Electricity Networks Association, who also released a report trying to suggest it’s the big issue too. Only problem is, their report couldn’t overlook the fact that solar saves networks money too – and in fact they even put a value on it. In the ENA report, they calculated that Australian networks save around $130Million dollars a year, thanks to solar system owners.
Whoops.
We all know damn well there are costs and benefits and subsidies smeared across the economy and try as they may both AGL and the ENA just make themselves look deceptive by cherry picking small parts of the story. Not a mention of the cost of air conditioning to users. Not a glimpse of the value solar provides through the merit order effect. Nothing at all on the fact that Retailer profits are scheduled to rise.
Staggeringly, Simshauser even decided to attack solar users for taking up State based Feed In Tariff’s because they were too generous. Somehow it seems he was thinking “The imprudent proletariat, they have no idea no what’s good for them”. Someone might want to remind him that
a) his sales team did a pretty good job selling to those same proletariat making quite a lot of money for AGL,
b) AGL then managed to hedge on RECs in many states, buying them cheap, then claiming $40 as a pass through inflating the cost of electricity to the same customers and
c) there are almost 2 Million solar homes or 4 Million proletariat who really like their solar and you are making enemies of every single one of them. And their friends and cousins and neighbours.
Given that 80% of Australians think solar is a bloody good idea, I think this could actually go down as one of the all time classic PR blunders and will be used as a case study on how to ignorantly offend every single potential customer you have.
We also saw another report released this week, but this time a more balanced and open view, focused on Western Australia.
Adjunct Professor Bill Grace from the University of Western Australia’s (UWA) Australian Urban Design Research Centre (AUDRC) summed it up pretty well when we said that despite the much hyped “generation over capacity”, continued growth in solar and other renewables is quite simply inevitable. To deny this, is to simply pretend it isn’t happening. But it is, every single day.
Professor Grace has warned Western Australia’s government and the state’s electricity sector must act now to prepare for the inevitable impact of residential and commercial solar power; which he says will be much higher than currently predicted by the Independent Market Operator (IMO), the controller of WA’s Wholesale Electricity Market. “The days of the electricity industry being the sole provider of energy services to consumers are over.” he said.
And therein lies the very core of the problem.
As I said at the start, I’m upbeat and a bit more optimistic today because clearly the electricity industry is shitting it’s pants, or they wouldn’t be punching out such impulsive and transparent arguments. It’s not 198o. The full story and the facts are in the public domain at the click of a button and they are (thankfully) being reported almost as much as the self interested corporate propaganda being published by some companies.
Post expires at 2:36pm on Wednesday November 25th, 2015