Small generators to get cheap links

By CHRIS DANIELS

The Government has unveiled plans to ease restrictions on small-scale electricity generation.

A discussion paper, published yesterday by the Ministry of Economic Development, has laid out ways for smaller generators, such as solar panels or wind farms, to be connected to local power grids without being hit by big connection charges from monopoly lines companies.

Despite an open environment for investment, and a lot of interest in renewable power generation, there had been only minimal investment in so-called "distributed generation".

Several projects had been cancelled because of the difficulty in getting interconnection agreements with local lines companies.

Most of these companies have no standard terms and conditions for connecting to their network, meaning each plan needed a newly negotiated connection contract.

There was also uncertainty for investors about the cost and terms of connection and disputes had arisen over how the costs of connecting up new generators to lines should be shared.

The proposed new rules will allow generation up to 10 kilowatts (kW) to be connected to local lines without an extra charge. This is enough to supply an average sized house.

A 10kW system could come from solar panels or a small wind turbine. The lines company which would supply a house with power some of the time would not be allowed to charge someone another fee for connecting their generation system up to the same lines.

For bigger projects, such as windfarms, that will be built and run by the bigger power companies, a new, standardised approach to plugging into neighbouring lines will be developed.

An arbitration system will be established to settle disputes between the generators and the lines companies.

Energy Minister Pete Hodgson said he expected that regulating lines charges for this kind of generation would help expand its use.

Wind farms and micro hydro stations would, he said, be frequently located away from the national grid and the ability to connect to local lines for a reasonable charge would help make them viable.

Green Party co-leader Jeanette Fitzsimons, who generates all electricity at her Coromandel home from solar panels and a wind turbine, said difficulties with lines companies had been one of the biggest obstacles to greater use of small-scale generation.

Lines charges from the monopoly lines companies were controlled by the Commerce Commission, however their charges to generators wanting to put electricity into the network were unregulated.

There needed to be a move away from the big centralised grid connected to big power stations, to a more flexible and robust system where small local networks with their own generation were connected by the national grid.

But the Government's proposal met with a lukewarm response from the biggest lines company, Auckland-based Vector.

Its group general manager for networks, Simon Mackenzie, said a range of other, more pressing industry issues should be given priority.

He said Vector already had arrangements in place for connections of distributed generation and while there were always issues surrounding them they had always been sorted out commercially without any regulation in past.

Submissions on the regulations are sought by November 3.