Economic, Education, Jobs and Skills Committee: community energy projects (3)
CRISP (Mildura) — I rise to speak on the inquiry into community energy projects, and today I would like to focus on grid connection, mentioned in chapter 4 of the report, on page 65. The transmission system, that is the poles and wires, connects the energy source to the customers. Most of the renewable energy projects are in regional areas: solar in north-west Victoria and wind in the highlands and along the coast. The section that this relates to — and I will quote from the report — is grid access, which will impact on a project's network and business proposition. So these renewable projects, whether community or otherwise and wherever they are located, require us to work within the energy distribution system.
We also need to understand the units of energy: we have the watt; 1000 watts is a kilowatt; 1000 kilowatts is a megawatt; and 1000 megawatts is a gigawatt. I think to understand the scale of the energy distribution network we need to understand these. At home we use watts or kilowatts for a toaster or a kettle. In generation a wind turbine typically has a capacity of 2 or 3 megawatts, and a solar panel is typically 250 to 300 watts. Victoria's use is measured in thousands of megawatts. For example, Loy Yang A, which has been in the news recently, has a nameplate capacity of 3300 megawatts. Currently most of our generation capacity is in the Latrobe Valley for brown coal and at sites closer to our major population centres for gas. The solar resources are in the north of the state, and exploiting the resource will be limited by the transmission line capacity or the grid.
Capacity in north-west Victoria — that is Mildura, Swan Hill, some of south-west New South Wales and some of the Riverland — is via two lines that run back towards the south of the state. The best we can do is to reverse the flow of the line capacity. So the current capacity to supply energy to the major customers, which are in our capital cities, is in fact what currently supplies the north. Swan Hill, Mildura and parts of south-west New South Wales are important areas, but compared to supplying a regional centre or a capital city, it is extremely low. I also know that there is little capacity left for solar projects in the north-west of Victoria as the line capacity that is available is now fully committed. This was also highlighted in the report, and I quote from page 65:
In addition to being costly and onerous, the grid connection approval process can be unclear, uncertain and difficult to appeal … There may also be grid constraints at the point of connection, especially in regional areas where connection to a new renewable energy generator could exceed the technical limits of the network.
And that is just what is happening in the north-west of the state. So what are we going to do about this requirement, because for Victoria's energy needs, we will need a huge increase in the transmission capacity? If you are leaving Melbourne and driving towards the Latrobe Valley and you look out next to the freeway, you will see the huge number of powerlines that come from the valley, and that is not what you see elsewhere in the state.
As always in this, it comes down to who pays for the reconfiguration of the transmission network or the grid. Some say the line operators should pay, and in our system that means the customer. Some say the government should pay; that is the taxpayer. We all know who is going to pay because, whether you are the customer or the taxpayer, that is you and me and the users.
I note that the federal government are inquiring into this issue of grid capacity and focusing very much on that. I look forward to their report because moving generation around the state and around the nation will make it much harder. There is much to be done in solving our transmission capacity and our grid connection issues.