The National Electricity Market (NEM), which accounts for 90 per cent of the network and supplies 90 per cent of Australian customers, generally provides a high level of service, and there is little evidence of systemic asset maintenance underspend.
However, reduced electricity consumption and other factors have led to a surplus of generating capacity and a fall in wholesale electricity prices. In these circumstances, there is some debate as to whether coal-fired generators (in particular) may reduce their maintenance outlays as a means of cutting operational expenses, thereby presenting some reliability risks to customers.155
Changing technologies in the energy sector have potentially far-reaching implications, including for the maintenance of electricity networks. At present, the focus of stakeholders in the sector appears to be on ensuring fair pricing structures that also allow uptake of these technologies. For example, the Council of Australian Governments (COAG) Energy Council has confirmed it is:
… 'scenario testing' the current regulatory provisions to ensure these are flexible and robust in light of emerging opportunities, new technologies, potentially changing customer expectations and declining demand. … The Council supports consumers' right to take up new technologies, but recognises that this should not be on the basis of cross-subsidies from other end users. The Council therefore sees the importance of having the right balance between uptake of technology and efficient outcomes for consumers across the system as a whole.156
Some electricity consumers are choosing to go 'off the grid'. The number of consumers in question appears to be quite small at present, but there is some commentary suggesting that the necessary technological changes may occur sooner than previously thought.157
Such a shift offers potential benefits, including a reduction in greenhouse gas emissions. However, it also raises issues for the wider energy sector and the community, including potentially difficult commercial and equity questions as to how historical capital and maintenance costs would be shared amongst the remaining users of electricity. The implications for asset management and user charges in the electricity sector could be substantial. This matter deserves ongoing attention by the industry, regulators and other interested parties.
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155. Department of Industry and Science (2014a), p.35
156. Council of Australian Governments Energy Council (2014)
157. See for example Register, C. (2015) and Hannam, P. (2014)