Tamatha Smith

Western Australia’s regional electricity provider Horizon Power recently announced the replacement of part of its poles and wires network with standalone power systems. Why is this great news for rural customers?
Tamatha Smith, General Manager Corporate Affairs for Energy Networks Australia, explains why.

Horizon Power is decommissioning and removing 64km of poles and wires and replacing them with stand-alone power systems (SAPS) in the Esperance region, along WA’s south coast.

It is the first electricity network in the nation to take some customers completely off-grid, instead delivering power via solar panels and batteries backed up by diesel generators.

The utility has previously installed eight stand-alone systems in the region and in Exmouth, in the state’s north-west.

By the end of 2019, Horizon Power will have installed a further 17 systems around Esperance.

For these customers going off-grid with stand-alone power costs no more, but it delivers cleaner electricity and greater reliability and safety in regional and remote areas .

Why stand-alone power systems make sense

Power customers at the end of long lengths of poles and wires are subject to some of the lowest reliability levels in the country. These networks are more prone to impact from bushfires and extreme weather events.

The distances can also make it difficult and time consuming to locate and fix faults.

Deploying power through many kilometres of network to a small number of customers is also very expensive – far more so than for highly populated urban areas. These costs are borne by all electricity consumers.

Supplying these people with power through solar panels, batteries and back-up generation can be more efficient for power distributors and delivers far greater reliability for customers.

Customers are provided with a fully maintained and remotely monitored system designed for their energy needs and billed the same way for no additional cost.

How a stand-alone system works

Energy Networks Australia considers stand-alone power systems a no-brainer and Western Australia is leading the way nationally with its work delivering this innovative approach.

The state’s other distributor, Western Power, has also been conducting SAPS trials. It has identified more than 15,000 potential sites where customers could benefit from a stand-alone system over the next ten years.

For east coast customers in the National Electricity Market (NEM), things are moving more slowly – but they are moving.

After a three-year review process, the Australian Energy Market Commission (AEMC) has recommended to the COAG Energy Council that network businesses be allowed to install a stand-alone system in regional locations where existing poles and wires are expensive to maintain.

NEM networks Energy Queensland, Essential Energy, Endeavour, Ausgrid, TasNetworks and AusNet Services have all identified opportunities for a SAPS roll-out.

While the number of NEM customers likely to seek a stand-alone system solution is relatively small, these edge-of-grid consumers account for a much greater proportion of network costs on a per-customer basis.

This means transitioning these customers off-grid to a stand-alone system can result in significant cost savings for all.

The AEMC’s draft report and recommendations for a regulatory framework for SAPS was published in June this year and a final report was due at the end of October. This report will complete the review process.

The Commission’s recent 2019 Economic Regulatory Framework Review report re-iterated the benefits of SAPS for edge-of-grid customers:

“For these customers, switching to a SAPS can provide them with decreased costs and increased reliability, while also reducing the costs other consumers incur in maintaining distribution network infrastructure.”

Next steps

Customers in the NEM are still not yet able to take advantage of SAPS as the AEMC’s recommendations require the approval of the COAG Energy Council (EC).

The COAG EC comprises state and territory energy ministers and is chaired by the Commonwealth Government Energy Minister. While the council is supposed to gather at least twice a year, there has been no meeting since December 2018.

Federal Energy Minister Angus Taylor recently announced that the next meeting would occur on 22 November in Perth.

Assuming the COAG EC considers the reforms at the meeting and provides its endorsement, the required rule changes must then be legislated.

So, there is still a way to go before the progress underway in Western Australia can be enjoyed by customers within the NEM, but the groundwork has been well and truly laid.