Power could be cheaper by using trigeneration and having fewer regulations blocking local energy production, according to the City of Sydney.

With the council’s $440 million trigeneration project about to go underway with Cogent Energy in its final contract stages to oversee the project, the council told the Productivity Commission that electricity could be cheaper if these regulations were removed.

This submission comes as Cogent Energy was required to register a network exemption to the Australian Energy Regulator (AER) for two trigeneration plants owned and operated by the applicant in North Sydney.

Similar exemptions have come from the AER regarding other trigeneration plants in Melbourne for Cogent Energy.

According to the University of Technology, the council’s trigeneration network could create savings of $1.5 billion by 2030 in deferred electricity network costs and power station capacity.

City of Sydney chief development officer, energy and climate change, Allan Jones said trigeneration networks could solve peak power demand problems more cheaply and efficiently than continually upgrading electricity networks and building remote, “inefficient” coal or gas-fired power stations.

“Consumers face another rise in electricity prices, mainly due to network charges – the cost of upgrading the poles and wires to bring more power long distances to the city, and to feed growing peak power demand from electric air-conditioning,” Mr Jones said.

According to Mr Jones, network charges are expected to rise to 60 per cent by 2014 and currently make up half of the average electricity bills in NSW.

Mr Jones argued that producing electricity locally and more efficiently would help reduce the impact of these network costs on electricity prices.

He said the regulatory barriers to the council’s trigeneration project are partly overcome because Cogent Energy has an electricity retail licence.

This allows the company to trade electricity directly to customers across the local distribution network outside the wholesale electricity market.