Australians’ uptake of solar power is having a dramatic effect on electricity markets
Solar turns tables on Australia’s electricity markets REneweconomy By Giles Parkinson on 16 June 2014 Australia’s electricity markets are forecast to experience more declines in consumption over the next three years, as homes and businesses conserve energy, use smarter appliances and turn increasingly to generating their own electricity.
The 2014 National Electricity Forecasting Report issued on Monday by the Australian Energy Market Operator has highlighted once again how all previous assumptions about electricity demand have been turned on their head in recent years.
As we reported on Friday, AEMO has been forced to revise down its forecast demand for 2013/14 for a second time, and it now expects demand from the National Electricity Market to continue falling for at least another three years.
AEMO notes that in the past five years, instead of surging demand, consumption from the grid has actually fallen by an average of 1.8 per cent a year from 2009–10 to 2013–14.
Ironically, this has been driven, it says, by surging network costs – which have risen in turn because of the $45 billion that was invested on the basis of high demand forecasts five years ago.
These rising costs, in turn, have encouraged consumers to conserve energy, turn to more energy efficient appliances, and look to rooftop solar to deflect their costs. Demand has also been reduced by declining industrial production.
The fall in demand, or at least the fall in demand from the grid (because many houses with solar PV are still consuming, just producing much of their own needs), is being used by incumbent generators and others with vested interests as an excuse to halt, or slow down, the pace of deployment of renewable energy in Australia……
The situation is even more dramatic in South Australia, where we explain here that a textbook decarbonisation of the grid is occurring thanks to its high penetration of rooftop solar, the big uptake of large-scale renewables, and the sidelining of old coal generators.
Of course, as we have seen in the submissions to the RET Review, the incumbent generators hate this. Origin Energy argued that the RET was never designed to force incumbent generators out of the market – it was always presumed that demand would rise and renewables would account for most of new capacity…….. http://reneweconomy.com.au/2014/solar-turns-tables-on-australias-electricity-markets-81352
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An important message here is that reporting on electricity supply and demand is strongly biased towards electricity that is bought and sold on the National Electricity Market (NEM). The NEM includes electricity from wind farms but not rooftop solar electricity which is counted as a reduction in demand rather than an increase in supply.
Reporting on electricity supply and demand is also invariably in terms of energy rather than electricity. This gives a false significance to electricity supply in the overall energy supply and demand equation.
It is highly probable that the average reporter doesn’t know the difference between energy (a generic term) and electricity (a specific form of energy). There is frequent confusion between power and energy and between the units for electricity (kilowatt.hour, kWh) and power (kilowatt, kW). This must be a source of great confusion for the average reader.
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