Future of Energy Management
27 September 2017

In Australia, amongst all the commentary on the dire state of the energy market , perhaps we need to ask ourselves” Should energy pricing be driven by the market or by Government intervention?”

If we look back over the last 10 years , it is evident that intervention by the Govt. (i.e. the Rudd /Gillard Govt.) has contributed to the seeming mess we are in at the moment . That Govt. set out on a course to close down the coal fired generating plants which had been so reliable for the last 100 years. Then they set up huge rebates to support homes installing solar panels on their rooves – possibly the most expensive form of energy on the planet . Now they are going back into the market and trying to turn on the old coal fired plants again and accusing the owners of those plants as being un-Australian if they don’t!

Coupled with all this , the States sold off the networks in pieces, hoping that market forces would drive the prices down. But the complete opposite happened, mainly because Australians know how to turn a buck !

And because of all the advertising about the benefits of green energy, more and more people have started to use renewable energy , and this is leading to less usage of coal fired energy over the existing poles and wires . So there are less customers to charge for the poles and wires , and this is leading to higher charges for coal fired electricity which is in turn leading more people to turn to renewables. The industry is talking about “Capacity charging ” so everybody pays their share of the poles and wires ( whether they use them or not) , but it will be a challenge to get that duck to fly

Today we have coal fired , gas, wind, solar , geothermal , hydro and diesel as sources of electricity , and we have to balance the production and distribution of these to 10 million homes and endless businesses and hospitals etc. Some of these sources are very expensive , such as Hydro , which is pumped back into place using off peak cheap energy. Nonetheless , it is a major balancing act for anybody to achieve without some pain.

The customer sits back and watches the Govt. of the day run around in circles trying to avoid a black out as that will lead to a loss at the next election . But should this all be the responsibility of the Govt. ? What about our responsibility ?

Over the last 10 years the industry has introduced new Standards which enforce all new appliances in the home to have connectivity for Demand Side Management (AS 4755). It is relatively simple to connect our air-conditioning , hot water system , fridges, driers and pool pumps up to the system and to program these to use energy at the most economical times of the day . It would be straight forward for a network aggregator to set up a system on a neighborhood by neighborhood basis , and work with the energy providers to balance the load and use the lowest cost energy .

Looking forward , it would be quite possible to provide each neighborhood with an energy target daily, weekly or monthly , and if they go over that level , the neighborhood suffer a blackout . I am sure that would stimulate some interesting conversations over the back fence!

But , it would change behaviour very quickly and put some of the responsibility back to us, the consumer

Now, I wonder if we have any politicians comfortable with putting this idea forward ?

Cheers

John