And the Minister whose proposition prompted the review still has concerns that the proposed charges ‘will act as a deterrent’ to companies looking to establish themselves in the local renewable energy market.
NERA Economic Consulting was commissioned by the States last year to determine whether Jersey Electricity’s proposed standby charge was ‘cost reflective’ and ‘consistent with the form of charge that would emerge in a competitive market’.
The proposed standby charge would be a monthly fee to commercial customers who generated their own power through renewable means but still wished to be connected to Jersey’s grid as a back-up.
The review was commissioned after International Development Minister Carolyn Labey’s 2018 proposition argued that JE’s proposal to impose standby charges could damage the development of the sector in the Island.
The NERA review concluded that the principle of JE reforming its charging regime was ‘justifiable on a commercial basis’ but that there were still ‘problems with the proposals put forward by JE that meant it would not promote efficiency in practice’.
Deputy Labey added her own concerns following the publication of the review.
‘With this standby charge that Jersey Electricity are proposing, they would be introducing a mechanism that, while it might be fixed at a conservative rate at the moment, I cannot help but feel will allow JE to act as a deterrent to independent operators,’ she said. ‘That charge could easily be brought up as the cost of producing renewable energy comes down. I am not saying it will, but it could.
‘This report will act as a good backdrop for the new electricity law and for government policy. But I would like to see everyone around a table to work out what is best for Jersey, and not just what is best for the shareholders of JE.’
Mark Brandon, the director of local solar-technology company Sun Works, also feels that the NERA report could become a catalyst for discussion between the States, JE and private operators.
‘The report conducted by NERA suggests that the current JE tariff structure does not cater for the introduction of renewable technologies onto the Jersey Electricity network without charge,’ he said. ‘Jersey has so much to offer in terms of on-Island power generation that we really hope this can be addressed.
‘The agreed Energy Policy, as well as many politicians’ individual manifestos, states that renewable energy is an area of high importance. A consistent message is needed to allow people to make the right energy choices and give all Islanders access to affordable alternative energy solutions.
‘Preserving our planet and aligning our energy sources with the natural ones all around is a key global priority of our time. SunWorks look forward to working with JE and government this year on a fresh and ambitious renewable-energy vision for Jersey in 2019.’
JE chief executive Chris Ambler said: ‘We have co-operated fully with this review and we are obviously pleased that the report clearly acknowledges the legitimacy of JE recovering its costs of providing grid and backup power services, including the need to make a fair return to ensure continued investment in the network. We have been, and continue to be, supportive of bringing local renewables into Jersey’s energy mix.’
