Chasing Australia's energy ideal

It’s a scorching hot day during a summer of the future.

At work, you use your smart phone to check the real-time pricing updates on your power supplier’s app. It predicts electricity prices will shoot up during the hottest time of the day, between 4pm and 6pm – the time when people get home from work and turn on air-conditioners, massively increasing power demand. The kids are at home today, so your air-conditioner is already on. You log-in to your home’s power control system and program it to cycle on and off every 10 minutes from 4pm, halving your household’s power use during the expensive peak.

Before 4pm, the system tells you, the solar panels on your roof will be pumping out more than enough to not only run the air-conditioner but also the fridge, freezer and home entertainment system. Excess energy from the panels will also have topped up your home’s power batteries.

After you get home tonight, stored energy from the batteries will run the air conditioner and the TV and will mean all you’ll need to buy from your power company is a small amount of electricity to cover your needs late in the evening – at a much lower cost than earlier in the day.

Of course, you’re well aware that the cheapest electricity is the electricity you don’t use. Long before this hot summer you have taken steps – using expert advice from your local, independently-accredited energy advice centre – to reduce your energy use to a minimum.

Some of these steps have been basic: blocking draughts, installing insulation and double or triple-glazing, and turning appliances off when not in use. Others have been more complex and have required more up-front investment, but have ultimately paid off with big savings on your power bills. These have included adhering to new government building codes mandating energy-efficient design when doing your renovations, as well as installing solar hot water.  

Your home is a microcosm of what’s going on across the entire energy system. With fossil fuels continuing to increase in price, businesses large and small have reduced their energy use to remain competitive. Meanwhile, power generation is widely distributed, feeding into the grid at more than one million sites around the country. This includes individual households and businesses generating power from rooftop solar panels, as well as larger-scale solar farms, wind farms, hydro-electricity systems, bioenergy plants, geothermal operations, wave and tidal generators, and high-efficiency combined heat and power systems in dense urban areas.

Originally, you thought none of this could happen without massive increases in power bills to pay for it. But now it’s clear that government incentives to change the energy system contributed only a small amount to your bills and this investment has provided some great returns.

Economies of scale mean that many of these energy sources require at most the same investment as traditional power stations to build and much less to run because there’s less exposure to volatile fossil fuel prices. What’s more, the main cost to consumers in years gone by – building extra power stations solely to meet demand those few hours a year when it’s at its highest – is no longer a factor.

What I have described here is Australia’s energy ideal. But is it really achievable and how many more summers will we have to sweat through before it’s a reality?

The answer is: yes, it is achievable, and within fewer summers than you might think.

However, it will require significant regulatory, financial, and cultural changes, supported by commitment from governments, business and the community.

It will need a complete overhaul of the energy market, opening up access for smaller, local generators and encouraging competition in both how technology is used and how energy is supplied.

It will need continued government support for renewable energy through mechanisms such as the Renewable Energy Target and the Australian Renewable Energy Agency, along with stronger action on energy efficiency to provide the markets and incentives to drive its roll-out.

Also necessary will be strong support for new initiatives to make energy storage such as domestic-scale batteries less costly and more broadly available.

Achieving our energy ideal will require government and business investment to provide consumers with robust and accessible information about how to manage their own energy use.

It will need transparent new energy pricing that reflects the real costs of peak electricity demand.

And it will require a whole host of new and affordable technologies – from in-home power monitors and displays, to online energy management systems, to thermostats that automatically regulate energy-hungry appliances.

None of this can happen overnight, but with sustained leadership and action by business and consumers in a stable market framework created by governments across Australia, we can achieve a lot in the space of just a few more hot summers.

David Green is Chief Executive of the Clean Energy Council.