Understanding what is happening to electricity demand

Hugh Saddler

Centre for Climate Economics and Policy Seminar

Crawford School, ANU 26 August 2015

Changes in sent out electricity since 2006

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15

TWh

NSW Vic Qld SA Tas WA

Absolute changes in electricity demand by State

-10

-8

-6

-4

-2

0

2

4

6

8

10

-15%

-10%

-5%

0%

5%

10%

15%

20%

Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13 Jun 14 Jun 15

TW

h

NSW Vic Qld SA Tas WA Total NEM (TWh, RH axis)

Relative changes in electricity demand by State

Peak demand since 2005-06

80%

90%

100%

110%

120%

130%

140%

150%

160%

Win

ter

200

5

Sum

me

r 2

005

-06

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200

6

Sum

me

r 2

006

-07

Win

ter

200

7

Sum

me

r 2

007

-08

Win

ter

200

8

Sum

me

r 2

008

-09

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ter

200

9

Sum

me

r 2

009

-10

Win

ter

201

0

Sum

me

r 2

010

-11

Win

ter

201

1

Sum

me

r 2

011

-12

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ter

201

2

Sum

me

r 2

012

-13

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ter

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3

Sum

me

r 2

013

-14

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ter

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4

Sum

me

r 2

014

-15

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ter

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5

Level r

ela

tive to

Win

ter 2005

NSW Vic Qld SA WA

Seasonal peak electricity demand by State

The absolute decline is less important than the reduction from the previous rate of growth

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1998 2000 2002 2004 2006 2008 2010 2012

Ind

ex,

19

98

= 1

Total energy Energy per capita

Electricity demand in the NEM since 1998 (ESAA data)

Understanding the components of the system

Supply

– Generated by large (NEM) generators

– Small Non-Scheduled Generators (embedded in networks)

– Sent out by rooftop PV

– Behind the meter from rooftop PV

Demand

– Auxiliary loads

– Transmission losses

– Distribution losses

– Large industrial consumers

– Residential + Commercial consumers

• General business

• Residential

NEM demand by major consumer category

Factors affecting Residential and Commercial demand

0

20

40

60

80

100

120

140

160

180

2006 2008 2010 2012 2014

TWh

Year ending JuneResidential + Commercial SNSG

PV Energy efficiency savings

Trends in residential electricity demand by state

Residential electricity demand per customer

Relative changes in residential electricity demand per customer

0

2

4

6

8

10

12

2005-06 2007-08 2009-10 2011-12 2013-14

MW

h

NSW ACT Victoria Queensland

SA Tasmania NEM average

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

2005-06 2007-08 2009-10 2011-12 2013-14

Ind

ex,

20

05

-06

= 1

NSW ACT Victoria Queensland

SA Tasmania Total NEM

Trends in general business electricity demand by state

General business electricity demand per $ of real Gross State Product

Relative changes in general business electricity demand per $ of real Gross State Product

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

Ind

ex,

20

05

-06

= 1 NSW

ACT

Victoria

Queensland

SA

Tasmania

Total NEM

0

20

40

60

80

100

120

MW

h p

er

mill

ion

$ G

SP NSW

ACT

Victoria

Queensland

SA

Tasmania

Total NEM

Trends in real prices (CPI data)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2005-06 2007-08 2009-10 2011-12 2013-14

Ind

ex,

20

05

-06

= 1

NSW ACT Victoria Queensland SA Tasmania

Explaining the trends – residential

• Regulated energy efficiency is particularly important

• Price increases, but with either a long response delay or a change in elasticity, or both

• Changes in residential electricity consuming behaviour are more than just a response to price

• Very wide variation in consumption per household indicates scope for further reductions

• But new and different policies are likely to be needed

• “Worst case” is likely to be constant consumption per household – total will grow in line with population

• Switch away from gas and uptake of electric vehicles could see demand growth resume

Some preliminary results from analysis of individual records from ABS 4670.0, Household Energy Consumption Survey (with assistance form Joshua Brown) (1) Weekly electricity consumption by income

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0 1,000 2,000 3,000 4,000 5,000

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ekl

y kW

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Weekly disposable income ($)

Victoria: all households with gas

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0 1,000 2,000 3,000 4,000 5,000

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Weekly disposable income ($)

Victoria: all households without gas

(2) The effect of fuel choice for water heating on total electricity consumption

139

89

115

77

112

77

108

59

137

90

113

77

129

81

110

67

123

78

108

67

050

10

015

0

Avera

ge

Ele

ctr

icity C

on

sum

ption

per

We

ek

NSW VIC QLD SA WA

Gas vs No Gas Water Heating

No Gas Others No Gas Bottom Quintile

Gas Others Gas Bottom Quintile

(3) Relationship of electricity consumption to dwelling type

0

50

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Avera

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En

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NSW VIC QLD SA WA

Q5 Rest Q5 Rest Q5 Rest Q5 Rest Q5 Rest

Energy Consumption by Dwelling Type

Separate house

Semi-detached, row or terrace house, townhouse etc. with one

Semi-detached, row or terrace house, townhouse etc. with two

Flat, unit or apartment in a 1 or 2 storey block

Flat, unit or apartment in a 3 storey block

Flat, unit or apartment in a 4 or more storey block

Flat, unit or apartment attached to a house

Caravan, houseboat, improvised home and house or flat attach

Explaining the trends – general business

• Scope for behaviour change to reduce business consumption in the short term is generally less than for residential consumption

• Decreasing business demand per $ implies increasing energy efficiency/productivity and/or structural change

• None of these sectors are particularly electricity intensive, so structural change unlikely to be important

• Difficult to see a strong relationship with price changes

• Is the apparent increase in total demand in 2014-15 due to residential or business or both?

Three projections of future demand for electricity by large industry in the NEM

Three projections of future total demand for electricity in the NEM