I was talking to a manager from one of the utility companies here at a conference last year and the conversation drifted onto a few topics that I find interesting.
The first item of note was that they have cut back on the amount of data that they are collecting from smart meters, noting that there are a few different customer segments with varying levels of interest in the data that is captured - but even the keenest lose interest in the data once they have optimised their usage patterns. Obviously this would change if pricing was more dynamic but that day seems to be a way off.
I also asked how they were dealing with the problem (from their point of view) of falling demand and his response was that they were looking to increasing uptake of electric vehicles to compensate for this.
This approach is now being promoted by the utilities industry association - Utilities hail electric cars to cut bills, reduce emissions.
A new report has uncovered that the cost of recharging electric cars could be as little as a quarter of the $1.50 a litre it currently costs to fill petrol-run cars.
Analysis by the Energy Supply Association of Australia (ESAA) found that an equivalent litre of electricity, or e-litre, could cost from 37 cents in off peak up to 62 cents in peak prices. It found that electric cars have the equivalent fuel costs of approximately 3 cents per kilometre, compared to 10 cents per kilometre for conventional cars.
The ESAA represents most of the country’s generators and network suppliers. Many of these businesses are being impacted by reduced demand for electricity. Some analysts, and some of its members, suggest that increased electric vehicle ownership could be a solution to those problems.
CEO Matthew Warren says electric cars are not only a “faster, cleaner, quieter and safer driving experience, they are also cheaper to run,” with electric engines being “simpler and far more efficient than the most advanced combustion engines.”
ReNew Economy has a related article on the factors causing the decline in demand - Why is electricity consumption decreasing in Australia?.
All of the decline in consumption has in fact been at the expense of coal fired generators. Many are now barely profitable. Greenhouse gas emissions fell by 9.2 Mt CO2-e, roughly 2% of Australia’s total emissions, in 2012 alone.
To be precise, what the above figures are measuring is not electricity used by final consumers, but electricity supplied to the national grid system by large generators which participate in the (wholesale) National Electricity Market.
It is very difficult to find consolidated data on the quantities of electricity supplied by small distributed generators, such as rooftop photovoltaics and landfill gas plants. But the Australian Energy Market Operator (AEMO) has estimated that in 2012-13. photovoltaics supplied 2.7 TWh and other small generators supplied 3.1 TWh. So, although important and growing, these sources alone do not account for the whole of the 8 TWh reduction from the peak year, let alone the 37 TWh reduction from the long term trend.
Research we have recently completed concludes that the three largest factors contributing to the recent dramatic changes in demand for electricity are:
- the impact of (mainly regulatory) energy efficiency programs
- structural change in the economy away from electricity intensive industries
- since 2010, the response of electricity consumers, especially residential consumers, to higher electricity prices.
Australia’s first mandatory regulatory energy efficiency measures were introduced in the late 1990s. These were Mandatory Energy Performance Standards (MEPS) for refrigerators and freezers.
Since then, these standards have been extended to a very wide range of residential and commercial appliances and equipment. Analogous energy efficiency requirements have been applied to new buildings. We have used data in reviews of the appliance and equipment measures and the building measures to estimate that the increased impact of these measures between 2006 and 2013 has in total reduced annual demand for electricity by 10.5 TWh, or 28% of the total 37 TWh reduction.
Smaller demand reductions have come from increased uptake of solar and heat pump water heaters (supported by various government programs), the Home Insulation Program (the so-called “pink batts scheme”), and the Victorian and NSW retailer energy efficiency obligation schemes. All of these schemes together contribute another 8% of the reduction.