Like so much green technology, the untapped energy efficiency goldmine that combines smart meters, smart appliances and electricity demand management lies just outside the realm of understanding, and the grasp, of the vast majority of Australia’s energy consumers – and its energy utilites, for that matter.
Despite various studies – like this report by Oxford Economics, commissioned by British Gas, which found that smart meters would bring net savings by 2030 of £11.2 billion for consumers, £10.7 billion for energy suppliers, and £3.2 billion for generators, due to lower demand – showing multiple benefits for the power industry and consumers alike (not to mention the, ahem, environment) Australian power companies are yet to fully embrace what looks like a golden opportunity, let alone convince their customers that they can be trusted to do so.
But according to energy research company Energeia, all this is set to change – and fast. A new study by Energeia predicts that the uptake of automated electricity demand management will spread so quickly in Australia in the next 10 years that by 2022, power companies will be managing 1.2GW of load across two million households – the equivalent, says Energeia managing director Ezra Beeman, to around four new gas-fired peaking power generators.
In its second annual report on residential demand management, Australia’s Residential Energy Management Market to 2022 (subtitled “Victoria is the Place to Be”), Energeia says this level of demand management would not only delay the need to build new power plants, it would also reduce the investment needed in poles and wires – the Australian Energy Market Commission Power of Choice report places the residential contribution to the peak as high as 35-45 per cent – thus cutting costs passed on to consumers.
But that’s a lot of household appliances being managed remotely by power companies. So what kind of appliances are we talking about here? And can the power companies be trusted with such, well, power? What about that fear among consumers that this will lead to the air-con being switched off in the middle of a heat-wave, or worse, the TV being switched off in the middle of a cricket match?
Beeman admits that the popular perception of smart technology – and particularly smart meters – is that it is not popular with consumers. But he says that in practice, this is not generally the case.
“In almost every case, customers are surprisingly open to new tools if they think it will have an impact, like cutting power costs, helping the environment,” Beeman told RenewEconomy in a telephone interview on Tuesday. “But there has to be no impact on their lifestyles.
And that’s the crucial point. It is for this reason that the household appliances that Energia sees being under management will be what Beeman describes as “the big ticket items” – things like pool pumps, air-conditioners, electric and electric boosted water heaters, which can be cycled on and off without too much margin for error – unlike washing machines and dishwashers, and televisions, for example.
These are also items that can (mostly) be easily adapted by manufacturers over the coming years to make them compatible with the Australian Standard AS 4755 – and many already are. The federal department of Climate Change and Energy Efficiency describes the Australian Standard AS/NZS 4755 as “intended to enable the large-scale introduction of smart appliances, by ensuring that the appliances will be able to operate reliably with any communications protocol and any metering environment.”
This would allow for the power company to shut off appliances, or operate them at minimal load, “for the duration of the demand response event.” In an air conditioner, it explains, this would mean the compressor was shut off, while fans and controls could continue to operate. During normal peak load events, “the utility (or a pre-programmed DRED) would ‘cycle’ air conditioners to operate for, say, 15 minutes and then shut off for the next 15.”
As for convincing home owners that their air-con will not be switched off indefinitely at 3pm on a hot February day, that is the retailers’ crucial role, says Beeman. “They need to gain consumers’ trust,” he says. “They need to convince their customers: ‘We will save you money and help the environment at no personal cost to you or your lifestyle.’”
As for the technology, it’s already arrived, although in limited amounts and ranges. “Our understanding is that you can purchase these products now,” says Beeman. “But we’re expecting it to become pervasive.”
So where are the power companies on this? Victoria is the only state so far to push ahead with smart metering – a move Energeia says has placed the state in an “excellent position” to develop programs for residential demand management when price controls are relaxed over the next couple of years.
“It may soon pay handsomely for smart consumers in Victoria and Queensland to buy appliances compatible with Australian Standard AS 4755,” says Beeman. “On the other hand, consumers in New South Wales and South Australia could be missing out on hundreds of dollars annually no matter how smart they are.”
Meanwhile, efforts like AusGrid’s Smart Grid, Smart City pilot program in NSW, and Origin Energy’s home energy management and conservation platform “Origin Smart” in Victoria, can only help the cause, says Beeman.
“Behaviour change is a bridge to the future where the robots take over and run things for us,” he says. “You can get a lot more valuable outcomes if you can systematise it, automate it and not impact peoples lifestyles.”