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Feb 2017 Tasmanian Energy Newsletter

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Tasmanian Energy News

2017 Throws up new challenges for businesses
Late last year an account manager from one of our local energy retailers asked me, "Why aren't more businesses screaming about the massive electricity price increases"? Wholesale "Energy Only" pricing for next Financial Year (2017/18) is currently at unprecedented levels and the Tasmanian price path is shown below: (View in your Web Browser to best enjoy our graphics!)

Sadly my answer was simple, "most businesses are unaware of what's happening in the market and only think about energy when their contract is about to lapse". So this month we'll take a look at how Goanna clients stay abreast of market movements and are able to assess the business impacts, 24/7 across the globe, on their desktop and mobile devices. 

Enter Goanna's Business Intelligence Services
It all happens overnight, when we upload each of your meters daily data before sunrise:


Armed with your daily meter data, we calculate each sites contract, network and market charges, to update your accrued costs, including your monthly and EOY outlooks:


If you're uncontracted for say the later part of the forward period, we also calculate your "Cost at Market" and "Cost at Risk" exposures, using current market data and volatility equations:


We monitor the forward markets and help you identify opportunities to engage with the market for energy and renewable energy certificates:


Network Tariffs make up the other half of your energy costs, can be changed annually and are totally independent from your choice of Retailer. New Regulations for "Cost Reflective" Network Tariffs from 1 July this year will see TasNetworks introduce a range of new business tariffs. So to ensure your costs are minimised we regularly optimise each of your sites network tariff choices and track the savings forecast against those actually achieved:


Using your sites actual consumptions we run monthly Business as Usual "Shadow Pricing" so the real dollar savings from any initiatives you've undertaken can be tracked against the BaU scenario. Because this is done at the site level savings are auditable and highly visible through our Savings Tracker module:

The Savings Tracker "Drill Down" function quickly identifies the key cost components and whether any variances are being driven by changes in consumption, demand or rates, right down to the individual site (NMI) level.

Finally, scenario modelling, decision making and reporting become straight forward with a single point of truth, forensically reconciled against your retailers invoices:

Ready to have real business intelligence at you and your teams fingertips? Then call Marc White now on 0418 596 162 to set up your in house BI demonstration.

Energy Users Association, Tasmanian Energy Forum 23 March 2017
Goanna is delighted to continue its support of the Energy Users Association of Australia (EUAA) in its major sponsorship of the Tasmanian Energy Forum being held in Hobart at 2pm on Thursday 23rd March 2017. Energy End Users can download your official Goanna discounted registration form.

Tas Generation Update
Since their record low of 12.8% on 11 April 2016, hydro storages rebounded at a record rate from May 2016. Hydro storages are currently sitting at just below 42% and falling, which is fairly normal for this time of year, See long term storage levels below. 


Hydro has been conserving water in storage by running gas fired generation to supply around 19% of the States needs during January/February. Hydro generation for January was at it's lowest level since 2013. See Tassie's Calendar Year to date generation splits below.


This regime has corresponded with high demand in Queensland, interconnector constraints and changes in generator behaviour, leading to strong spot prices, averaging around 8.7c/kWh. The highest first Quarter on record in Tas, excluding the 2016 Basslink outage. See Long Term average Quarter 1 Tasmanian Spot Price history below.

The January "risk-of-change" in Tasmania's Spot price was the highest since July 2016. The monthly price increased, but so too did the potential risk for further increases. Unfortunately these strong spot prices feed into the market's expectations for higher forward prices, as we've seen in the first chart in this newsletter.

For February's detailed National & State by State Electricity Market Commentary, call Marc on 0418 596 162.

Goanna Assists with Submission on Energy Security Taskforce's Interim Report
We have recently assisted the TSBC with a submission to the Tasmanian Energy Security Taskforce's (TEST) Interim Report. The TEST was formed in the aftermath of the threat to electricity supplies in Tasmania from December 2015 to May 2016 due to low hydro-electric storages and a 6 month outage of Basslink. Gas generation, voluntary load shedding by some major customers and portable diesel generators had to be called on to avert loss of supply.

The TSBC submission supports many of the findings and recommendations of the Interim Report, including more conservative water management and the proposal to set up a more arm's length scrutiny of energy security in light of potentially conflicting interests in Hydro Tasmania regarding water management on the one hand and maximising revenue on the other. On the latter, it retains concerns that this new approach does not remove all such risks.  It also supports the TEST's findings that the viability of the Tasmanian gas market is at risk, including if gas generation exits the Tasmanian electricity market or a contract to supply gas to the Tamar Valley Power Station is not renegotiated. This is consistent with the recent Goanna Energy study of the Tasmanian gas market.
However, the submission takes a less optimistic view of some aspects of the Taskforce's findings on electricity and gas security.

The TSBC submission also proposes that energy security be set within a State energy strategy and supports the need for further competitive reform of the Tasmanian electricity and gas markets.  It further expresses concern about the lack of knowledge of what caused the Basslink outage and the impact of this on energy security settings, and calls on the TEST to subject it's intended final findings and recommendations to public scrutiny before its final report is completed (due mid year).

Cross-subsidies in Tasmania Electricity Tariffs Hurting Small Business Goanna Study Finds
Goanna Energy was asked by the Tasmanian Small Business Council (TSBC) to examine whether Tasmanian electricity tariffs contain cross-subsidies that damage small businesses. Our study found that electricity cross-subsidies are costing small businesses up to $10 million annually and that they are hurting small businesses by increasing their costs, and limiting their ability to invest and create jobs. It recommended an end to the cross-subsidy as soon as possible, noting that TasNetworks and Aurora Energy are now moving in this direction but that the time taken to remove them (up to 15 years) is far too long and will continue to hurt small business and limit its ability to contribute to the Tasmanian economy in the meantime.TSBC Report on Cross Subsidies in Tasmanian Electricity Tariffs.

Small Business Submission on Regulation of TasNetworks' Distribution Prices
Goanna have recently assisted the TSBC with a further submission on the Australian Energy Regulator's (AER) draft decision on TasNetworks' distribution prices for the next two years. This covers lower voltage connections. We also assisted with an earlier submission on TasNetworks' proposal to the AER which strongly supported reductions in distribution prices.

Whilst it is gratifying that both the AER and TasNetworks have proposed useful  reductions in distribution prices in 2017/18, this is followed by a slight increase the following year. The latest TSBC submission supports further reductions in prices - based especially on the feasibility of lower costs - it also highlights risks to those price reductions proposed in the AER's draft decision. These risks flow from a possibility of higher interest rates in future, which would flow into network prices via TasNetworks' rate of return, decisions on appeals on other AER decisions and revised proposals by TasNetworks that would increase its revenue base.

The AER's final decision on TasNetworks Distribution is expected by the end of April.

Energy Consumers Australia Tasmanian Residential Consumer Sentiment Survey
Results from the December 2016 ECA Survey show that Tasmanian's overall satisfaction with energy services is the lowest out of all of the states and territories, down 6% from the previous survey. Whilst the ECA Survey notes that this may have been influenced by the failure of the Basslink undersea power cable.

Also of note 54% of Tasmanian Households surveyed say they have either installed (20%) or are considering installing (34%) Solar Panels. In addition to this, 2% say they have already installed electric battery storage with a further 24% saying they are considering it.

You can find out more about Goanna's consumer advocacy services by contacting Marc on 6223 7253.

Other noteworthy items
We are proud to have once again sponsored the UTAS Isolated Power Systems workshop which was held on Flinders Island in November/December 2016. Marc was kept busy during the week playing host and minibus driver to over 50 national and international delegates. Both the 2015 & 2016 UTAS IPS events have proven to be very worthwhile and the Organising Committee are once again turning their attention to this years event.

 
Find out more
Want to know more about Goanna Energy or any of these stories? Is there anything we can do to help your business reduce its energy costs? Phone Marc White on 0418 596 162 for more information or follow him on Twitter at https://twitter.com/MarcBWhite


While Goanna has endeavored to ensure that the information contained within this newsletter is accurate, we do not make any warranties or representations in relation to the accuracy of the information contained herein.
 
This newsletter is intended as general advice only and is not intended to constitute personal financial product advice. It is has been prepared without taking into account the personal circumstances, financial needs or objectives of any one person or organisation. Accordingly, individuals or organisations who seek to rely on information contained within this newsletter should undertake their own independent enquiries and seek legal or financial advice prior to doing so.
 
Disclosure: Tasmanian Energy Brokers Pty Ltd is an affiliated business of Goanna Energy Consulting Pty Ltd.


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2017 Goanna Energy Consulting Pty Ltd. All rights reserved.

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