Alongside the AEMC draft determination, the AEMC is publishing a report commissioned from Marsden Jacob Associates, who were asked to estimate:

  • the unit value of a Local Generation Network Credit (LGNC) that would be paid to owners of embedded generators by each Distribution Network Service Provider (DNSP) in the National Electricity Market (NEM), based on published long-run marginal cost (LRMC) values and mirroring the consumption tariffs of each DNSP;
  • the total LGNC payments earned over a twelve month period by various types of embedded generation types; and
  • the total LGNC payments made by each DNSP over a twelve-month period.

Marsden Jacob Associates estimates the total annual LGNCs paid by all DNSPs to be $50 million, of which around 73 per cent ($36.7 million) would be to households with solar PV.

Individual DNSPs are estimated to pay between $0.2 million (CitiPower) and $10.3 million (Ergon Energy). The following annual LGNC payments may be implied:

  • Households with 4KW solar PV – less than $50 in most DNSP pricing zones

Commercial with 20KW solar PV – less than $60 in most DNSP pricing zones, but $580 in Ergon’s West pricing zone.

  • Distribution-connected 200KW solar farm – from $2,300 in South Australia, Victoria and rural New South Wales to $6,700 in Ergon’s East pricing zone.
  • Distribution-connected 1MW wind farm – from $11,000-$15,000 in Victoria to $27,000-$28,000 in rural New South Wales and Queensland.
  • Co-generation 5MW system – from $105,000 in coastal New South Wales and $129,000 in South Australia to $200,000 in rural New South Wales and Queensland.
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