Feature article: Power trends changing the way we all use electricity

7 min

There are some incredible changes taking place in the world of electricity. Energy Live contributor David Walker discusses six of the big ones.

It’s Jo Witters’ job to work with stakeholders on the emerging trends in electricity. And there’s a lot to see as solar and wind power, battery storage and new computing technologies enter the power system, offering new possibilities for choice and control and two way engagement in the energy market.

Witters, Head of AEMO’s Centre for Innovation, says the power industry is going through the same sort of disruption that telecommunications has gone through. “It wasn’t that long ago we all had landlines,” she points out, “and now we all walk around with personal computers in our pocket.”

The owners of those clunky early-1990s mobile phones, however, couldn’t have foreseen a world where everyone constantly checks their social media feeds. Likewise with electricity, the current wave of change will create some effects we cannot yet foresee.

But our electricity market needs to encourage the right investments. So AEMO is working to better understand how electricity customers will use power in the future.

Pieces of our electricity future are already being trialled and tested, and some of us are likely to be making changes now.

Here are seven ways our interactions with electricity are already changing and will continue to evolve over the next 10 years and beyond.

Solar panels take over our roofs

Witters notes that only a few years ago, people viewed solar power as a “fringe” source of electricity. Now, “it’s actually one of the largest generators in the country”. And much of it is on suburban rooftops. She says the energy sector has not had a great track record at predicting the next big changes – missing the uptake of air conditioning in the late 90’s and the sharp ramp-up of solar in the last decade. “It’s important we work hard to understand these trends and the impact of changing behaviours as these large investments stay around for many years”.  

Research suggests that even with lower government subsidies in the years ahead, technology will keep making solar photovoltaic panels cheaper, more efficient and longer-lasting. In fact, some scenarios forecast 30-45% of electricity generation in Australia being generated by rooftop solar by 2050. If that’s right, rooftop solar could be far more common in a decade’s time, with continued growth in traditional panels and likely growth in innovative new roofing materials that act as solar panels also. Combined with cheaper battery storage, that may make solar power a highly competitive power source for all sorts of uses with the potential to cut customers power bills.  

Electric cars are commonplace

Today electric cars remain relatively rare on Australian roads. The most obvious are the luxury Tesla models whose owners have paid around $100,000 to glide silently through city streets.

Analyst Sam Abuelsamid of technology research firm Navigant Research calls the rise of electric and computerised vehicles “a huge transformation”. 

Carmakers are planning many more electric vehicles. One reason is that electric cars are coming down in price as manufacturers learn more about making them efficiently. They also benefit from the same manufacturing processes for car batteries as that of commercial or residential batteries, and there are significant advantages to be enjoyed from big Research and Development budgets. Electric cars have fundamentally simpler drivetrains than cars with regular engines too, which should make them cheaper to make and buy – perhaps quite soon.

Witters notes that developments in charging infrastructure in cities, at workplaces, and around the road network to account for long distances are essential components to support uptake here in Australia. Where governments have put in place policies to support uptake in other countries, the uptake in electric vehicles have been much higher (50% uptake in Norway and rapid increase in California, growing in China).

Homes install batteries

Large batteries will begin playing a substantial role in our electricity grid – and many of them are likely to be in people’s homes. Witters says in-home batteries capable of supplying an entire house for periods of time may eventually play a key role in national power management, with households feeding solar-generated electricity from their rooftops into batteries during the day and using that power in the evening peaks.

It is likely to become increasingly commonplace for power companies themselves to install and manage batteries at various points in the electricity grid around the country. This has already started, with the world’s largest battery having been installed in Jamestown, SA, and more under development. 

We cater to the gadget explosion

The past 10 years has seen a rapid multiplication of the number of household devices that need a power source, and that trend is set to continue for years to come. Modern houses have multiple devices, ranging from kitchen appliances, televisions through to our air conditioning and heating units. Cheap, low-power processors and Wi-Fi chips are enabling manufacturers to embed tiny computers into almost anything, this smart technology being an enabler for smarter more integrated electricity usage in the home.

One result is that devices will be even easier to “set and forget”, with potential savings in power and increased efficiency, Witters says. With improvements to efficiency standards for appliances as well as a proliferation of wireless charging points, some embedded into our furniture, our level of connectivity will continue to rise, and with it the potential to use these gadgets to adjust how we use energy and potentially provide services back to the grid. Amazon Alexa and Google Home devices already offer such innovative products and have seen a massive uptake in North America and UK markets.

Power prices respond to need

Electricity retailers might offer customers prices that vary from very cheap to more expensive at different times, depending on the cost of power supply. In response, washing machine manufacturers, for example, might increasingly market models that enable users to set timers to ensure they only operate when cheap wind or solar power is available.

Witters is one of many who sees potential value for pricing that changes over the course of the day, better reflecting the cost of supplying the power at different times, making the overall electricity system more efficient. Given that not all customers are likely to want to regularly respond to changing prices, there is potential for electricity retailers to offer an opt-in basis to each customer, rather than simply imposing it on everyone. Where customers have a great deal of control over their pattern of electricity usage, these offers may be increasingly attractive to garner the cheaper deals. 

You sell power to your neighbours

Moving power around the national electricity system requires significant power line infrastructure. There are a number of factors that contribute to electricity prices. One of these is network costs. Given the large scale of infrastructure needed to support growing community needs, these can be significant investments. 

Alternative investment options exist to manage the future network needs of communities, including a range of energy efficiency measures and solutions that can be installed on a ‘micro grid’ level. For example, the New York City Government recently asked a power company to consider different options for supplying power to new tower buildings, rather than simply constructing a large substation in the heart of the City. The utility created an innovative micro grid of solar and battery storage where all of the local community were able to be directly involved. Other such systems also now exist in Oakland, California and in Western Australia.

Power decisions become invisible

It’s plain from these examples that the electricity system of 10 years from now will be shaped by a complex web of decisions. Witters says these choices will be enabled by people using data and smart software. A computer would be able to help you to decide, for example, whether your excess solar power goes to a battery, is sold to your neighbours or to the wider grid. 

Witters knows most electricity users don’t want to spend time managing their electricity. “My gran ... you don’t want her to think she has to turn her air con or heating off at different points because you want her to comfortable.”  Not all customers need to be price responsive though – reducing the peak periods and making real changes at those points can assist security of supply and overall energy price outcomes for the whole.

Australia’s electricity sector faces many changes in the years ahead, she notes. “But in a few years’ time, when the changes have been made, it would be great if it was all clean, reliable, affordable …and boring.”

Watch more here.

*As the system and market operator, we are fuel and technology neutral. The products, services and providers in this content are for illustrative purposes only and are not endorsed by AEMO. AEMO and its officers and employees are not liable for any statement or omission in this content.
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