Wednesday, October 27, 2010

NBN batteries to cost $150m a year

PROVIDING back-up batteries for 11 million phone subscribers to the National Broadband Network will cost taxpayers up to $150 million a year. 
Back-up battery units will be made mandatory on the NBN after industry concerns over consumers' ability to place emergency calls during a power outage.

Once the NBN is fully operational, about 2 million to 4 million back-up batteries are expected to be disposed of annually.

The McKinsey-KPMG implementation study into the NBN said it would cost an "additional $90m to $150m each year" to give all phone service users the emergency back-up batteries.

"This estimate is based on a high-quality sealed lead acid battery, which costs approximately $40 and has an operational life of three to five years," the implementation study said.

The price was based on heavily discounted wholesale rates for lead batteries of between 66 per cent and 79 per cent.
The study's $43 billion costing of the NBN did not include the price of a power supply unit to house the batteries. It also advised against mandatory back-up batteries because of the environmental hazards of battery disposal.
NBN Co, the company charged with building the fibre network, initially said back-ups would be optional.

Its own technical documents state that NBN Co would not supply, install or maintain a back-up battery, and that the power supply unit could be ordered as an optional component.

However, the government recently instructed NBN Co to make back-ups mandatory, after industry concerns over the ability to place emergency calls on the NBN during a power outage.
An NBN spokeswoman has confirmed residents would not be slugged with additional fees to purchase back-ups.

"NBN Co has factored the cost of the battery back-up into its business case," she said. "It will come at no cost to end-users.

"Additional details in relation to technical and operational issues are subject to further development by NBN Co, following feedback on the technical specifications. Further information will be released in due course."
The McKinsey study said NBN Co should not be required to provide battery back-ups to all Australians but should "provide a PSU with the option to insert a back-up battery for all FTTP (fibre to the premises) customers".

It warned of potential environmental problems related to the battery program.
"Providing batteries universally would involve disposing of approximately 2-4 million batteries annually," it said. "This could cause an environmental hazard if toxic lead-acid batteries used are not recycled or disposed of safely.

"If a battery back-up approach is pursued, NBN Co should explore available technologies to reduce the cost of the solution, for example, batteries that automatically enter stand-by mode unless a call is in progress."

Taxpayers are expected to pay for about $26bn of the total spending for the planned high-speed broadband project.
The government has yet to respond to the McKinsey report.

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