Thursday, 3 November 2011

National market inflates prices, says city

Sydney Morning Herald
Monday 24/10/2011 Page: 4

THE structure of the national electricity market results in unnecessarily high power prices by effectively blocking the development of smaller generators and is resulting in over-investment in electricity assets.

"It costs more to participate in the market than to generate", the chief development officer, energy and climate change with the City of Sydney council, Allan Jones, said. "We need a trading system outside the national market. A trading system supplying Sydney and Wollongong, for example, should be exposed to the full cost of the transmission grid".

Decentralised energy such as trigeneration systems, which use the waste heat from generating electricity to heat water and in cooling systems, are sidelined from use by the centralised nature of the national electricity market, he said. The Sydney council is pursuing plans for a trigeneration system, which would involve a network of gas-fired power stations around the edge of the central business district. This would boost the security of power supply to the area and potentially provide electricity at a cheaper price, with lower carbon emissions.

The proposal involves installing up to 360 MWs of generation capacity, which would be split across four units, from 20 MWs in Green Square to 120 MWs in parts of the CBD Energy. Using natural gas, the system would reduce emissions associated with office buildings and shopping centres by as much as 60% while providing for a return on investment of as much as 20%.

"This would enable the thermal energy networks connecting buildings together to be implemented, distributing zero carbon waste heat from local low-carbon electricity generation", the council said in its submission to the Tamberlin electricity inquiry, which is to deliver its report to the NSW government by the end of the month.