Last Wednesday night I was rewarded for eating into some State-of-Origin watching time by attending a Public Lecture organised by Grattan Institute, International Energy Centre and UQ Energy Initiative entitled “Energy in 2014: more mines than field” .
Speaking at the event were Cameron O’Reilly (from the ERAA), Paul Simshauser (from AGL), Mike Swanston (from Energex) and Tony Wood (from the Grattan Institute) – and the session was chaired by Dr Chris Greig (Director, UQ Energy Initiative).
Each speaker made some points of interest, but it was a couple comments made by Mike Swanston that particularly caught my interest – prompting this post. The following are my words not Mike’s (though he did lend me his slides) – so please don’t misconstrue, in anything below, that Energex has endorsed (or even read) this post prior to publication.
Solar has been successful – in more ways than one
I’d seen this particular chart before, but had not known that the Americans call it a “duck curve”:
The eating away of the lunchtime demand is attributed to rapid take-up of solar PV – not just for the houses connected by this feeder, but more generally across the Energex network. This is one aspect of the solar success story in the Energex distribution area on a particular feeder (I think Mike said it was somewhere down around Currumundi – listen to the podcast here if you really want to be sure).
In addition to the effect that solar has had on reducing the “Scheduled Demand” that has to be met by generators AEMO dispatch into the National Electricity Market, the solar industry that has experienced astronomical growth in recent years has been very successful at garnering a large share of coverage in the news media, associated social media, and other BBQ conversations ….
… but there’s another story going on at home, that may be even more important…
Though not as sexy (or as contentious) as the massive take-up of solar PV across the NEM, this second chart underlines that there is another (quieter) revolution underway as well:
It’s my understanding that the chart summarises the average energy consumption of domestic (tariff 11) customers, differentiated by whether the households have solar or not. Listen to the podcast for Mike’s views.
The chart, to me, clearly indicates two different stories going on:
Story #1) The average Mr Blue, the solar PV owner, seems to have used solar to achieve (for him, in a step-change) a substantial reduction in the average consumption for the household:
However we note that the average usage in these households has not really changed significantly after that initial step change.
Story #2) On the other side of the coin, Ms Green, who has been unable to install solar, seems to have chipped away at their energy usage piece-by-piece (insulation in the ceilings, LED lighting, more efficient appliances, remembering to turn lights off, etc… – see our earlier list of possible reasons why demand is declining)
Why has Ms Green been unable – or unwilling – to install Solar PV to date?
A1) The first answer that springs to mind is that perhaps Ms Green has not had the disposable income to be able to afford to install solar. I personally know of people who have – at least to date – been in this position.
For these people, the growing stream of service providers working through the AER process of retail exemption to enable them to install solar systems on a lease-back basis would seem to be one potential solution to their problem. The upcoming update to our “Power Trading Schematic” will be one way to see how significant this change is becoming.
A2) Undoubtedly there are also a select group of Ms Green who are renters, and so do not have the incentive to use a capital outlay (for solar) to offset their ongoing expenses.
What can be done to assist people in this situation – particularly as these people, as a group, will be ones affected by what’s become termed as the “death spiral”?
A3) Perhaps short-stay owners are also part of this group?
A4) I’m sure that there are other reasons – please do add them in comments below….
Under this simplistic Green –vs– Blue hypothesis, it does beg the question of why Mr Blue seems to have become lazy about continuing an energy efficiency drive, to the point where their average energy consumption currently is not really any better than it was back in May 2010?
Have the generous returns provided under the 44c feed-in-tariff (particularly for a full-sized 5kW system) meant that these people are less inclined to search further to find other ways of reducing energy consumption around the house?
Or is it that the capital’s been invested on the solar system to the point where there’s not as much loose change lying around to refit lighting to LEDs?
Perhaps an alternate interpretation is that these energy savings measures have also been installed by Mr Blue but that, buoyed by the cash-back he is receiving each quarter (and the assured knowledge that his energy bills will not keen increasing, unlike what Ms Green must fear) he is able to go out and buy more gadgets?
Some questions, then, for the Policy Designers:
Q1) has the average electricity usage of solar PV consumers flatlined, as is implied in the above chart?
Q2) If so, why have these households not continued to improve their energy efficiency at the same rate as the non-solar households?
Q3) Is there some (technological, or other) limit to energy efficiency at home?
Q4) What policy drivers could be put in place (if it was determined that this might be government policy – perhaps as a flow-on from the RET Review) to encourage the ongoing implementation of energy savings initiatives at home.
For those interested in reading further, see these earlier comments in relation to the current RET Review process…