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Aust's electricity future 'could' be placed in consumers' hands

11 December, 2013

Australia's electricity landscape could change significantly in the future and consumers will be deciding just what that future will look like.

A new report from the Future Grid Forum, "Change and choice: The Future Grid Forum's analysis of Australia's potential electricity pathways to 2050" looks at a range of opportunities and presents four scenarios, not predictions, through which potential futures for our national electricity system can be viewed.

Paul Graham, CSIRO Energy Flagship Chief Economist, said recent declining demand, higher electricity prices and strong adoption of roof-top solar panels have changed the industry's view of what is plausible in the future and trained a focus on affordability challenges.

"All of the choices in the Future Grid Forum scenarios have consequences for the price of electricity, something that has significantly impacted consumers in recent years," he said.

"Electricity will not get cheaper in the coming decades, but bills can be reduced through the adoption of energy efficiency, peak demand management and on-site generation.

"These steps, in combination with general wages growth, means the share of income average households spend on electricity is projected to be similar — shifting marginally from 2.5 per cent in 2013 to between 2.3 and 2.9 per cent in 2050 depending on the scenario.”

Electricity has traditionally been a service with which consumers have not proactively engaged, but the forum's scenarios present a number of ways for people to take greater control of how they consume and produce electricity.

"This proactive shift could potentially influence the business model for the electricity sector, encouraging the emergence of new services to supply an individually tailored product — not dissimilar to the telecommunications industry shift from a one-size-fits-all landline telephone system to a wide variety of mobile and associated data and entertainment services.

"One of the forum's scenarios looks at the option for around a third of consumers to disconnect from the electricity grid through the use of on-site generation using technologies like rooftop solar panels and battery storage … this is projected to be economically viable from around 2030 to 2040.

"Under the full range of scenarios Australia could see on-site generation grow from the current figure of 8 per cent to reach between 18 and 45 per cent of total generation by 2050, but mostly while staying connected and using the grid as an electricity trading platform."

The forum also projected that technology will allow more sophisticated ways of managing household demand during peak times through the introduction of devices such as smart air conditioners and in-home storage systems.

"Better strategies for peak demand management could save two cents per kilowatt hour or $1.4 billion per annum on distribution costs for households," Graham said.

"This is an extraordinary time of change for Australia's electricity industry and the Forum partners see the release of this report as an opportunity to begin a national conversation to decide the right answers for the sector, its stakeholders and, most importantly, all Australians."

The Future Grid Forum report, Change and choice: The Future Grid Forum's analysis of Australia's potential electricity pathways to 2050, and the supporting technical modelling and social dimensions reports can be downloaded at Future Grid Forum: change and choice for Australia's electricity system.

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Goldie | Saturday, December 14, 2013, 8:23 AM
Declining demand brought about by consumers cutting back and industry shutting down is being met head on with savage and relentless price rises to ensure that electricity industry monopolies maintain the levels of income guaranteed to them by governments. Pretending that time of use pricing is justified between 1600 and 2000hrs is treating people with the same level of contempt that politicians do, as if we have no brains. Upping costs at this time and telling us we have options is trying to say bath and feed your kids and cook your evening meals after 2000hrs and you will save some money. This is not a practical solution and they know it and yet our spineless governments will see it their way. Disconnecting from the grid will do one no good as rapacious governments and utilities are now ramping up fixed charges so shortly you can use next to nothing but still be paying hefty bills simply because a system exists. People have engaged in this industry, they installed solar because the Feds and state govts said that people who do so are saviours of the planet now they are despised and vilified by these said same people with hatred of them being incited by many state govts. People have tried to reduce their bills by implementing, at significant cost, all manner of energy saving measures only to be met by spiralling variable costs and skyrocketing fixed costs. People have engaged and they have been bent over for their efforts. Finally no one tells us in detail what our ever rising bills is buying us and when we will reach the end. A bit like, tell them nothing, let them live in the dark and we will profit anyway as we hold all the cards and any move they make to save we will counter it and we will use legislation to do it. Electricity will never be in consumers hands as there is too much money at stake and guaranteed money at that.
Hayrick | Monday, December 16, 2013, 11:04 AM
Full support Goldie. It is all a rigged game to ensure monopoly profits. Governments used to be servants of the people but no longer as their arrogance knows no bounds supported by large inflated salaries and superannuation rorts, Why should they care as their mates reap and rape. Well they will one day when we have all been stripped, perhaps they will learn then what happens when the public really turns against them with a vengeance. Fixed charges are anti-competative and prevent innovation - and they know it, not to mention the gas price rort Why do we pay international prices when Australia is awash with gas/LPG? When I converted my car LPG a few years ago it was 50c litre- it is now 97c and inflation is in 2-3% band! Is this a Joke!! It is evidently a very profitable scam and incidentally eliminates any gas electrical generation (ceramic cell) by households. Follow the money.
W Bool | Monday, December 16, 2013, 11:15 AM
Some of us are already partially generating off-grid power, and supplementing the grid power with gird connected PV. I generate about 1kWh per day off-grid. Australia needs to change legislation to make it compulsory for all new houses to have solar water heating installed as part of the build, and add in double glazing, along with all the usual insulation. House rooves need to be insulated properly, and install heat recovery ventilation, and the power bills will be drastically reduced, reducing the cost of generation and expansion of power systems. Commercially wind generation can be expanded too.
Goldie | Monday, December 16, 2013, 11:33 PM
W.Bool. It sounds great and to most the right thing to do but making all manner of energy saving initiatives compulsory will achieve only one thing, dearer housing, and that is something we do not need. As stated in my original post, governments are ramping up fixed costs, at least here in Qld. All the money spent on any compulsory energy saving measures will, in all probability, reduce your energy consumption but not your bill. Their increased costs will simply devour what you thought you were saving. As for solar, well, feed in tariffs are now not worth having but if you do instal a system, prepare for the sneers and the villainy now attached courtesy of our politicians. Yesterday's environmental saviours are now today's pariahs. Anyone installing a system should size it for their own consumption only and forget about feed in tariffs. If the govt here in Qld ever renege on the original agreement, I will be disconnecting from the grid. They are not getting it from me for 8c/kW/hr only to on-sell it to my neighbour for at least 26c. Monopolies and governments with the now all too common common "up yours" attitude to their citizens are a deadly mix.
Richard | Thursday, December 19, 2013, 2:58 PM
10 to 15 years ago utilities such as electricity were extremely inexpensive and remained like that for years. Why is there now a change to an ever escalating cost for electricity and why are they getting away with it? They are getting away with it and will continue to get away with it because they can. Supply and demand. Yes demand in this case is on their side and as long as the demand is great, they will continue upping the cost. Unfortunately not everyone is in a position to provide alternate energy due to cost, and as long as they know this they will continue to take advantage of it.