Mr BAYLEY - We had a conversation yesterday with Aurora that demonstrated that there's no technological metering challenges with this proposition, but we're contacted relatively regularly and I've tracked this issue for a few years of farmers and the agricultural sector investing significantly in renewable energy assets on a meter, an irrigation pump or a dairy or some other meter. They use what they can of that energy through that meter and in that energy-intensive activity and they export the balance into the grid at feed-in tariffs.
Meanwhile, on the very same farm, an account being held by the very same farmer is importing on to the farm into another meter to use for another product or irrigator at significantly greater cost. There are no technological issues in terms of metering and balancing out this as an issue. Assuming and acknowledging that there can and should be some kind of fair recompense to TasNetworks for the use of poles and wires, I'm interested in exploring this from a policy perspective. What do we need to do to move to the space where farmers can share power across their own meters on their own farms using TasNetworks' poles and wires?
Mr DUIGAN - I'm certainly aware of this issue and I'm sure Sean is too. I'd be interested to hear what TasNetworks' position is on this.
Mr McGOLDRICK - We've had discussions over years about this matter with various individual farmers and farmer bodies. We were stymied for a number of years by the existing regulatory arena and what was allowed and what was not. There have been some changes in the last year that have been very helpful to us and in that regard we have now found it possible to bring forward a tariff trial in Tasmania for a number of such farmers as you've described, some in the Midlands, some in the south of the state.
Mr BAYLEY - Is that active now?
Mr McGOLDRICK - It's going to be in our regulatory submission. The regulator has to accept it as a trial, we have to establish some data and then we'd run it for a number of years - three or four years, if not five - but we're hopeful that if we have the right number of participants and the right physical set-up, including smart meters, that will allow us to run the trial. During the trial those participants will benefit from that exchange of energy and hopefully some savings associated with it. If the trial is a success it would be deemed by the AER as being an appropriate tariff that could be used throughout the entire National Electricity Market.
Mr BAYLEY - As I understand it, there are aspects of your network that at times get stressed, the demand on it is such, with irrigators turning on their irrigators all at the same time and the like. This kind of on-farm investment in renewable energy would not only assist the farmers in terms of better using their energy and drive significant investment in more renewables, which then frees up energy for other customers, but designed correctly and supported through TasNetworks it could relieve some pressure on the network where you're currently having challenges and outages. Is that correct? Could you talk us through that benefit as well?
Mr McGOLDRICK - First of all, we absolutely welcome the investment that farmers and other householders make in renewable energy. It is the way forward and gives us great resilience in our power system. We have to configure it, but that's a quiet revolution that's happening all around Australia and happening here in Tasmania. It's up to us to respond as a network and make sure we can give value to customers who have made such investments.
Separate and apart from that, there is the tariff of policy issues. We need to make sure that if there is an avoided cost, if we as TasNetworks avoid having to make an investment but somebody else has invested in some solar panels or wind turbines locally on-farm, we have to be able to demonstrate that there is a prudent way that we can indicate to the regulator that we avoided this cost, therefore part of that cost saving we can pass through to these individuals and groups that have made the investment. That's the nature of the trial, that's what's behind it. It's absolutely technically possible from a policy point of view. We have smart metering so that we can track this. We can do all of those things. We just have to set the right tariff up, and more importantly the regulator has to be convinced that it's in the best interest of all consumers.
Mr BAYLEY - That's very welcome. Is the charging element and the use of the poles and wires reflected through the tariff structure, or would you have some other system where depending on the distance through there, so it doesn't make any difference in terms of the distance for farmers shifting power from one to the other, it's purely a set rate through the tariff structure?
Mr McGOLDRICK - It would not quite be a set rate because there are time-of-use complexities in this as well. We're currently working through the nature of the tariff itself and whether it has to be a contiguous property or further afield. We're working through those details right now. That's the purpose of the trial.
Mr BAYLEY - Minister, from a policy perspective, is government supportive of this as an approach to drive investment to increase the benefits from the investments already made on-farm?
Mr DUIGAN - As I alluded to, I am aware of this being an issue. I have a meeting in my diary for early December with representatives from TFGA to discuss exactly this issue. I think broadly it makes sense, notwithstanding what Mr McGoldrick has said about the regulator and some of the complexities. On the surface it seems like a very simple idea, but I understand in the energy space it is rarely that.
Mr BAYLEY - Thank you.
