A solar anti-grid rebellion led by apathy?
On Friday I touched upon some interesting findings from a CSIRO study that outlined the possibility that the increased use of distributed energy, such as solar, plus the use of batteries from electric vehicles would mean much of our electricity infrastructure becomes redundant.
Under one scenario, entitled the ‘Rise of the Prosumer’, electricity consumption from the eastern states grid would be a third lower in 2050 than what it was in 2006.
For those working in the energy sector, such a scenario is extraordinary.
There is well over $100 billion worth of electricity infrastructure tied up in big power stations and poles and wires that were built on the assumption we’d see electricity demand grow well beyond 2006 levels.
This causes a mixture of dread and excitement for energy types depending on which side of the fence they stand.
For those keen on deploying new technology like solar, energy efficiency, computer controlled energy control equipment and energy storage, this is like nirvana. They see households becoming mini power-control systems, generating and using power via a mixture of technologies which minimise their load on the power network. Or, even, becoming fully self-sufficient.
For policy wonks there’s an issue over how best to optimise the use of existing infrastructure while not discriminating against or favouring new technology. For many this comes down to changing electricity pricing so that consumers see more clearly the costs associated with electricity provision.
But while energy types get excited, most energy consumers really couldn’t care less about all this stuff.
Accompanying the CSIRO’s main report was a research paper on understanding residential consumers’ attitudes and understanding of energy issues. It’s pretty sobering reading for both those keen on technology and those keen on more sophisticated pricing structures. CSIRO notes:
Consumers for the most part it appears, aren’t really interested in altering how they use electricity to fit in with goals of reducing overall electricity system costs or lowering carbon emissions. They had to be hit by a very big price shock involving a doubling of prices over four years before they got engaged. And for many consumers that engagement focused on a quick fix of installing a solar PV system. This has then acted to further expose problems with our standard approach of charging the same price for electricity, no matter when and how much is consumed.
But changing pricing structures faces consumer resistance. CSIRO notes that focus group testing of Australian households finds they are willing to consider pricing that varied depending on the time of day but was constant over the year (same price during say 2pm to 8pm over the whole year). Yet trials conducted in Australia by Energex and Integral Energy found no change in peak demand as a result of the introduction of such tariffs alone, according to CSIRO.
What is far more effective in reducing load on infrastructure is where consumers face very high prices a few times per year when demand is extremely high (very hot days in summer when air conditioners are used intensively). Yet focus group testing suggested Australian households were extremely wary of such pricing structures.
A discussion last week at the Energy Efficiency Council’s national conference involving the CEOs of the Australian Energy Market Commission, the Energy Suppliers Association and the Clean Energy Council, illustrated the supreme difficulties confronting the electricity sector. Both the AEMC and the ESAA’s CEOs pointed out that we need to change pricing structures to encourage reductions in power demand during peaks on the electricity network.
But David Green of the Clean Energy Council warned that if this hurts consumers who’ve invested in solar or vulnerable consumers, it won’t get very far before politicians intervene.
It also requires the widespread rollout of smart meters and this imposes another cost on households which Victorian experience suggests they will resist.
Another problem is that electricity companies aren’t particularly the flavour of the month with households at present. The shocking behaviour of some door-to-door salespeople in particular has left households deeply suspicious of energy companies. So what do you think the prospects are of energy retailers convincing households to adopt more complex pricing structures?
During the conference discussion, Bruce Mountain, an energy market analyst, suggested an alternative path to smart meters and varying prices. In France, households are asked in advance to select a maximum amount of kilowatts they wish to be able to draw from the grid. This locks-in a payment per kilowatt over the year. A switch is then installed which prevents them from drawing more power from the grid than they’ve paid for.
The beauty of such a model is it serves to present the cost of power supply upfront, creating an active and more engaged purchase decision rather than the current model where people passively purchase the electricity many times over via mindlessly flicking a power switch, only finding out several months later how much it has all cost.
The French model is likely to make households more engaged in thinking about how much power their appliances use and, given its cost, how much they really need.
It’s also likely to help households think about how technology, like solar with batteries or automatic load control of appliances, could offset their network charge.
In return households get more certainty about their energy bills.
EDIS: Will we embrace or reject the network? December 6