Staying connected – energy in tasmania an overview

STAYING CONNECTED

Energy literacy training for front-line community services workers

ENERGY IN TASMANIA An overview

Electricity – what do we pay for?

The price we pay for electricity is made up of the individual costs of each part of the supply chain – as well as some extra costs.

The retailer, Aurora Energy, sends us a bill that includes the cost of all of the parts.

Aurora pays the other companies their share and keeps some to cover its costs.

Who uses electricity in Tasmania?

Household consumers

(approx 236,500)

Small to medium-sized businesses and government Large industrial businesses

(less than 20, mostly in the mining and minerals sector)

Electricity cost breakdown in 2016

52% 12.2% 5.6% 2.7% 0.4% 27.1%

approx

20% approx

20%

Electricity consumption in Tasmania

approx

60%

Network: Costs of using, managing and maintaining the transmission and distribution networks Retail: Costs of billing and customer service

Renewable Energy Certificate charges: Australian Government charges to support renewable energy generation in Australia

Metering: The provision, maintenance and reading of electricity meters Market charges: Fees payable by all customers for the management of the National Energy Market Generation: Electricity generated by Hydro Tasmania (or purchased from the mainland)

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THE ELECRICITY SUPPLY CHAIN

Generation

Transmission

Distribution

Generation

Networks

This is the process of creating electricity.

In Tasmania Hydro Tasmania generates electricity by using water, windfarms and gas-fired generators. Hydro Tasmania also buys electricity from Victoria when it’s needed and brings it into the State through Basslink (an electricity cable that runs under Bass Strait and links Tasmania to Victoria).

Electricity networks are the poles and wires that carry electricity from where it’s generated to where it is used. The transmission network consists of very large, high voltage power lines that carry electricity from generators to the distribution network (as well as directly to the very big industrial companies). The distribution network is made up of the poles and wires that deliver electricity to homes and other buildings.

Hydro Tasmania is owned by the Tasmanian Government.

Electricity is also generated by the many solar panels that sit on rooftops around the State.

Part of this electricity is used by the people who own the solar panels and some of it is fed back into the distribution system (or ‘the grid’) and distributed to other homes and businesses.

R

In Tasmania there is only one electricity network company: TasNetworks which is also owned by the Tasmanian Government.

TasNetworks is also responsible for the electricity meters on our homes and buildings; TasNetworks staff read our meters and pass the information on to Aurora Energy for billing.

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Rooftop solar generation

How are electricity prices set?

In Tasmania, prices for all parts of the electricity supply chain are regulated. Price regulation protects consumers from unfair pricing in situations where there are single suppliers (that is, where there is little or no competition).

Retailer

Households

The Tasmanian Economic Regulator regulates both: ·· the price of electricity that Hydro Tasmania generates and sells to retailers (Aurora Energy) in Tasmania (this is sometimes called the ‘wholesale energy price’) ·· the retail price of electricity, that is the part of the price that Aurora Energy can charge for its costs to serve its customers.

The Australian Energy Regulator (AER) regulates: ·· network prices for both transmission and distribution networks.

Retailer In Tasmania there is only one retailer that sells electricity to households – Aurora Energy. Aurora Energy buys electricity from Hydro Tasmania and pays for its transmission and distribution across TasNetworks’ poles and wires. Aurora then charges us for the electricity we use and the costs it pays getting it to us (and for some other charges – see p1).

Aurora Energy is also owned by the Tasmanian Government.

In other states, there are multiple retailers who compete with one another for customers.

While the Tasmanian market is open to other retailers, Aurora Energy is the only retailer currently serving Tasmanian households.

The AER also regulates energy markets and networks under the national energy market law and rules. It makes sure that all market participants (e.g. Aurora Energy and TasNetworks) follow the rules and it has the power to impose fines and other penalties on companies that fail to follow the rules.

The AER provides information for consumers about consumer rights and financial hardship (see www.aer.gov.au/consumers).

The AER has a website where consumers can compare prices and offers from energy retailers where there is retail competition (NSW, Victoria, South Australia, parts of Queensland and the ACT). There is also information about Aurora Energy’s prices and conditions in Tasmania. At the moment only Aurora Energy sells electricity to Tasmanian households but it is possible that other retailers will come to Tasmania in the future. See www.energymadeeasy.com.au

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THE GAS SUPPLY CHAIN

Production

Transmission

Distribution

Retailer

Households

Gas production and processing

Gas retailers

Tasmania’s natural gas supply is produced in the gas basins located in and around Bass Strait. It is processed at an onshore site in Longford, Victoria.

There are two natural gas retailers in Tasmania: Tas Gas Retail and Aurora Energy. They both sell natural gas to households and businesses. Around 12,000 Tasmanian households use gas, with Tas Gas Retail supplying 68% of them and Aurora Energy supplying 32%.

Tasmanian Gas Pipeline Natural gas is brought from Victoria into Tasmania by a transmission pipeline owned and operated by Tasmanian Gas Pipeline (TGP). The pipeline enters Tasmania at Bell Bay and transports natural gas to Port Latta in the North-West and to Bridgewater in the South of the State. At various locations along the pipeline are meter stations that connect to local distribution networks, as well as to direct supply for major industrial companies. The transmission network supplies the gas distribution network.

Gas distribution network Tas Gas Networks owns and operates the State’s gas distribution network that delivers gas through underground pipelines to Tasmanian households and businesses. Tas Gas Networks also supplies and reads gas meters. It sends usage information from gas meters to one or other of the State’s two gas retailers for billing.

Gas prices Gas prices, like electricity prices, are made up of the costs of all parts of the supply chain; however, unlike electricity, prices are not regulated in any part of the gas supply chain.

The two gas retailers in Tasmania compete for customers but offer very similar prices.

All of the companies involved in the natural gas supply chain in Tasmania are privately owned (except for Aurora Energy, one of the gas retailers, which is owned by the Tasmanian Government).

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