Original article concept from Renew Economy.
As Victoria, (and Australia) increase energy efficiency in homes and businesses throughout the state and country, this will inevitably have an impact on energy retailers, as homes and businesses reduce their consumption and decrease demand on power with a ‘doing more with less’ basis. With this in mind, what will the impact on power markets be as energy efficiency increases and we can do more with less?
Power markets and energy efficiency
“Rooftop solar… has become a dramatic market success story, with Australia leading the world in its recent growth. In Perth, for example, the resources boom led huge numbers of households to invest in solar photovoltaics, which are now available at roughly half the cost compared with the United States. As a result, 25% of houses in Perth have solar panels – a combined total of 550 megawatts, which effectively makes them the biggest power station in Western Australia.” Source
“Solar panels are well on the way to hitting 70% of households. Along with batteries going through the same dramatic price spiral, no extra fossil fuel power stations are now being envisaged.”
In comparison the fossil fuel industry across Australia is disintegrating, potentially removing fossil fuels as the primary source of power in the future and with a combination of renewable energy and energy efficiency, our need for fossil fuels drops even further significantly impacting our power markets. ”
Energy efficiency has long been held by its enthusiasts as the most obvious lever to reduce emissions, and save costs. A megawatt hour of electricity not used is the cheapest form of abatement, they say, and have even coined a term – the “negawatt” – to market the idea.” Source
According to Citigroup Analysts and reported on Renew Economy “Say goodbye to power prices fully driven by fuel price…Power prices will increasingly be driven by weather patterns (temperatures, rainfall, wind and sunshine), which are in practice not yet forecastable or hedgeable for more than a year”. A concept of “peak demand” will also disappear and create a “radical reshaping of energy markets”.
This could lea to uncertain changes in electricity price spikes. An interesting report is available based on US data here.
Read more on Renew Economy’s article here
