increase in electricity use. This is because demand/capacity tariffs do not correlate
with the volume of electricity used but with the load placed on the network. The
tariff developments and the corresponding cost increases have raised serious questions as to the financial viability of agricultural producers, and many have considered
going off-grid or reverting to more water-intensive irrigation practices. Whilst both
steps are problematic, the latter is more worrisome in the context of ever-increasing
water scarcity in a climate change context plus the increasing demand on and costs of
water. In addition, substantial electricity network augmentation has occurred since
2009 which has raised questions as to whether the transition to demand/capacity
tariffs was appropriate. Demand/capacity tariffs are considered suitable if there are
‘constraints’ in the system (e.g. in the delivery of electricity). However, given the
large-scale infrastructure upgrades to the QLD and NSW networks, network constraints only exist in small isolated pockets across both States (most of which are
located close to major population centres like Brisbane and Sydney) (Grant 2016).
Whilst this factor would support further tariff reform, governments across the NEM
are disincentivised to change the current tariff structure as a large number of
residential consumers (with small loads) have benefited from the change at the
expense of users with larger loads, including agricultural producers (AEMC 2014).
Given the cycle of revenue determinations for QLD and NSW distribution network
services, this is likely to cause distributional cost issues, as agricultural producers are
charged for large loads over short time periods (despite the lack of constraints in the
network).
7.7 The Murray-Darling Basin Plan and Its Direct
Relationship with the Nexus
The Murray-Darling Basin (MDB) covers 14% of Australia’s land area across QLD,
NSW, Victoria, South Australia and the Australian Capital Territory. The geography
of the Basin takes in 23 rivers and their catchments. Almost four million people
inside and outside the Basin need its water for the survival of their families,
communities and industries. Around 70% of Australia’s irrigation occurs within
the Basin, accounting for 40% of Australia’s agricultural produce (MDBA 2014).
The MDB is a diverse and dynamic system. Its characteristics are constantly
changing in response to the influences of people, the climate and the way available
water is used for agricultural production and other industrial use, by communities
(including for cultural values of Australia’s indigenous people) and the environment.
Water availability is an increasingly important issue within and outside the MurrayDarling Basin, and the Millennium Drought (1995–2010) magnified the concerns
about future water availability for both consumptive and environmental use. For that
reason, the then Prime Minister John Howard introduced the National Plan for Water
Security in 2007 which fundamentally altered the landscape of water management
and regulation in the Murray-Darling Basin. The National Plan for Water Security
100
S. Schulte et al.
with the volume of electricity used but with the load placed on the network. The
tariff developments and the corresponding cost increases have raised serious questions as to the financial viability of agricultural producers, and many have considered
going off-grid or reverting to more water-intensive irrigation practices. Whilst both
steps are problematic, the latter is more worrisome in the context of ever-increasing
water scarcity in a climate change context plus the increasing demand on and costs of
water. In addition, substantial electricity network augmentation has occurred since
2009 which has raised questions as to whether the transition to demand/capacity
tariffs was appropriate. Demand/capacity tariffs are considered suitable if there are
‘constraints’ in the system (e.g. in the delivery of electricity). However, given the
large-scale infrastructure upgrades to the QLD and NSW networks, network constraints only exist in small isolated pockets across both States (most of which are
located close to major population centres like Brisbane and Sydney) (Grant 2016).
Whilst this factor would support further tariff reform, governments across the NEM
are disincentivised to change the current tariff structure as a large number of
residential consumers (with small loads) have benefited from the change at the
expense of users with larger loads, including agricultural producers (AEMC 2014).
Given the cycle of revenue determinations for QLD and NSW distribution network
services, this is likely to cause distributional cost issues, as agricultural producers are
charged for large loads over short time periods (despite the lack of constraints in the
network).
7.7 The Murray-Darling Basin Plan and Its Direct
Relationship with the Nexus
The Murray-Darling Basin (MDB) covers 14% of Australia’s land area across QLD,
NSW, Victoria, South Australia and the Australian Capital Territory. The geography
of the Basin takes in 23 rivers and their catchments. Almost four million people
inside and outside the Basin need its water for the survival of their families,
communities and industries. Around 70% of Australia’s irrigation occurs within
the Basin, accounting for 40% of Australia’s agricultural produce (MDBA 2014).
The MDB is a diverse and dynamic system. Its characteristics are constantly
changing in response to the influences of people, the climate and the way available
water is used for agricultural production and other industrial use, by communities
(including for cultural values of Australia’s indigenous people) and the environment.
Water availability is an increasingly important issue within and outside the MurrayDarling Basin, and the Millennium Drought (1995–2010) magnified the concerns
about future water availability for both consumptive and environmental use. For that
reason, the then Prime Minister John Howard introduced the National Plan for Water
Security in 2007 which fundamentally altered the landscape of water management
and regulation in the Murray-Darling Basin. The National Plan for Water Security
100
S. Schulte et al.