The truth on weather and electricity demand

Weather has been pencilled in as a key factor driving recent declines in electricity demand, but in truth its impact has been minimal on the national electricity market.

As discussed in several forums, electricity demand in the NEM has been decreasing for the last three or four years. There have been significant implications for wholesale prices and flow-on effects for investment in the energy sector. But what is actually driving down demand? This is an important question as it shapes what demand may do in the future.

Among the possible drivers reducing demand are:

-- Impacts of the Global Financial Crisis (GFC);

-- Price elasticity (higher energy prices driving efficiency) in industrial and commercial sectors;


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