THE FINAL REPORT OF THE ECONOMIC REGULATION AUTHORITY (ERA) INTO MICROECONOMIC REFORM WAS RELEASED LAST WEEK WITH A MYRIAD OF RECOMMENDATIONS WHICH NOW HAVE TO BE ASSESSED BY GOVERNMENT AND SORTED INTO THOSE TO BE IMPLEMENTED, THOSE TO BE REJECTED AND THOSE THEY WILL CONSIDER SHOULD THE POLITICAL ENVIRONMENT BE FAVOURABLE.
Amongst the braver decisions would be to implement fully cost reflective electricity tariffs for households and small businesses. Government subsidisation of energy is forecast to cost $1.5 billion over the period 2013/14 to 2016/17, however electricity pricing is a highly sensitive political issue. Even the ERA qualifies their recommendation by saying that WA should progress towards that goal; achievement could be a long way away.
Decisions such as this will impact on urban development as the higher the energy tariff through the grid, the greater the likelihood of a viable alternative market emerging. This goes beyond putting solar panels onto the roof and feeding it into the grid, this is about communities looking at their options including third party providers.
A paper released earlier this year by the Alternative Technology Association and Energy for the People, looked at timelines for alternative energy supply to become viable and determined that a standalone micro-grid for greenfield housing developments, delivered by a speciality energy service provider, is highly likely to be viable by 2020 (where natural gas is available). Another suggestion in that report was the potential for communities to purchase their section of the main grid, particularly where it is aging, and upgrading to renewable energy supply through a third party.
Distributed energy provision will become more likely with the rapidly falling cost of energy storage; domestic and commercial batteries are going main stream. Currently the batteries are still round ten times the price per kWh when compared to a car battery so there is plenty of room for improvement.
For urban development, infrastructure planning is one of the most important aspects of a successful project and, with connection to the power grid being one of the most expensive individual items, alternatives are continuously being investigated. Higher tariffs and the potential introduction of taxation on infrastructure gifted to Western Power and Horizon Power may accelerate the viability of alternative approaches, particularly in regional areas, but it is unlikely to happen for at least a decade or more.
The ERA report has many interesting recommendations but at some 479 pages, there is a level of commitment to get through it all.