ENERGY TRANSFORMED:
SUSTAINABLE ENERGY SOLUTIONS FOR
CLIMATE CHANGE MITIGATION
MODULE B
INTEGRATED SYSTEMS BASED APPROACHES TO REALISING
ENERGY EFFICIENCY OPPORTUNITIES FOR INDUSTRIAL/
COMMERCIAL USERS – BY SECTOR
This online textbook provides free access to a comprehensive education and training package that brings
together the knowledge of how countries, specifically Australia, can achieve at least 60 percent cuts to
greenhouse gas emissions by 2050. This resource has been developed in line with the activities of the
CSIRO Energy Transformed Flagship research program, which is focused on research that will assist
Australia to achieve this target. This training package provides industry, governments, business and
households with the knowledge they need to realise at least 30 percent energy efficiency savings in the
short term while providing a strong basis for further improvement. It also provides an updated overview
of advances in low carbon technologies, renewable energy and sustainable transport to help achieve a
sustainable energy future. While this education and training package has an Australian focus, it outlines
sustainable energy strategies and provides links to numerous online reports which will assist climate
change mitigation efforts globally.
CHAPTER 4: RESPONDING TO INCREASING
DEMAND FOR ELECTRICITY
LECTURE 4.1: WHAT FACTORS ARE CAUSING RISING PEAK AND
BASE LOAD ELECTRICITY DEMAND IN AUSTRALIA?
© 2007 CSIRO and Griffith University
Copyright in this material (Work) is owned by the Commonwealth Scientific and Industrial Research Organisation (CSIRO)
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www.naturaledgeproject.net/Sustainable_Energy_Solutions_Portfolio.aspx. Users of the material are permitted to use this
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The work is to be attributed as: Smith, M., Hargroves, K., Stasinopoulos, P., Stephens, R., Desha, C., and Hargroves, S.
(2007) Engineering Sustainable Solutions Program: Sustainable Energy Solutions Portfolio, The Natural Edge Project.
Acknowledgements
The Work was produced by The Natural Edge Project (hosted by GU and ANU) using funds provided by CSIRO and the
National Framework for Energy Efficiency. The development of this publication has been supported by the contribution of
non-staff related on-costs and administrative support by the Centre for Environment and Systems Research (CESR) at
Griffith University, under the supervision of Professor Bofu Yu, and both the Fenner School of Environment and Society and
Engineering Department at the Australian National University, under the supervision of Professor Stephen Dovers. The lead
expert reviewers for the overall Work were: Adjunct Professor Alan Pears, Royal Melbourne Institute of Technology; Geoff
Andrews, Director, GenesisAuto; and Dr Mike Dennis, Australian National University.
Project Leader: Mr Karlson ‘Charlie’ Hargroves, TNEP Director
Principle Researcher: Dr Michael Smith, TNEP Research Director, ANU Research Fellow
TNEP Researchers: Mr Peter Stasinopoulos, Mrs Renee Stephens and Ms Cheryl Desha.
Copy Editor: Mrs Stacey Hargroves, TNEP Professional Editor
Graphics:
Where
original
graphics have been enhanced
for inclusion in the document
this work has been carried out
by Mrs Renee Stephens, Mr
Peter Stasinopoulos and Mr
Roger Dennis.
Peer Review
Principal reviewers for the overall work were Adjunct Professor Alan Pears – RMIT, Geoff Andrews – Director, Genesis
Now Pty Ltd, Dr Mike Dennis – ANU, Engineering Department, Victoria Hart – Basset Engineering Consultants, Molly Olsen
and Phillip Toyne - EcoFutures Pty Ltd, Glenn Platt – CSIRO, Energy Transformed Flagship, and Francis Barram – Bond
University. The following persons provided peer review for specific lectures; Dr Barry Newell – Australian national
University, Dr Chris Dunstan - Clean Energy Council, D van den Dool - Manager, Jamieson Foley Traffic & Transport Pty
Ltd, Daniel Veryard - Sustainable Transport Expert, Dr David Lindley – Academic Principal, ACS Education, Frank
Hubbard – International Hotels Group, Gavin Gilchrist – Director, BigSwitch Projects, Ian Dunlop - President, Australian
Association for the Study of Peak Oil, Dr James McGregor – CSIRO, Energy Transformed Flagship, Jill Grant – Department
of Industry Training and Resources, Commonwealth Government, Leonardo Ribon– RMIT Global Sustainability, Professor
Mark Diesendorf – University of New South Wales, Melinda Watt - CRC for Sustainable Tourism, Dr Paul Compston - ANU
AutoCRC, Dr Dominique Hes - University of Melbourne, Penny Prasad - Project Officer, UNEP Working Group for Cleaner
Production, University of Queensland, Rob Gell – President, Greening Australia, Dr Tom Worthington -Director of the
Professional Development Board, Australian Computer Society .
Enquires should be directed to:
Mr Karlson ‘Charlie’ Hargroves
Co-Founder and Director
The Natural Edge Project
www.naturaledgeproject.net/Contact.aspx
The Natural Edge Project (TNEP) is an independent non-profit Sustainability ThinkTank based in Australia. TNEP operates as a partnership for education, research and
policy development on innovation for sustainable development. TNEP's mission is to
contribute to, and succinctly communicate, leading research, case studies, tools,
policies and strategies for achieving sustainable development across government,
business and civil society. Driven by a team of early career Australians, the Project
receives mentoring and support from a range of experts and leading organisations in
Australia and internationally, through a generational exchange model.
Prepared by The Natural Edge Project 2007 (Hosted by GU and ANU)
Page 2 of 18
The International Energy Agency forecasts that if policies remain unchanged, world energy demand
is set to increase by over 50 percent between now and 2030.1 In Australia, CSIRO has projected that
demand for electricity will double by 2020.2 At the same time, The Intergovernmental Panel on
Climate Change (IPCC) has warned since 1988 that nations need to stabilise their concentrations of
CO2 equivalent emissions, requiring significant reductions in the order of 60 percent or more by
20503. This portfolio has been developed in line with the activities of the CSIRO Energy Transformed
Flagship research program; ‘the goal of Energy Transformed is to facilitate the development and
implementation of stationary and transport technologies so as to halve greenhouse gas emissions,
double the efficiency of the nation’s new energy generation, supply and end use, and to position
Australia for a future hydrogen economy’.4 There is now unprecedented global interest in energy
efficiency and low carbon technology approaches to achieve rapid reductions to greenhouse gas
emissions while providing better energy services to meet industry and society’s needs. More and
more companies and governments around the world are seeing the need to play their part in
reducing greenhouse gas emissions and are now committing to progressive targets to reduce
greenhouse gas emissions. This portfolio, The Sustainable Energy Solutions Portfolio, provides a
base capacity-building training program that is supported by various findings from a number of
leading
publications and reports to prepare engineers/designers/technicians/facilities
managers/architects etc. to assist industry and society rapidly mitigate climate change.
The Portfolio is developed in three modules;
Module A: Understanding, Identifying and Implementing Energy Efficiency Opportunities for
Industrial/Commercial Users – By Technology
Chapter 1: Climate Change Mitigation in Australia’s Energy Sector
Lecture 1.1: Achieving a 60 percent Reduction in Greenhouse Gas Emissions by 2050
Lecture 1.2: Carbon Down, Profits Up – Multiple Benefits for Australia of Energy Efficiency
Lecture 1.3: Integrated Approaches to Energy Efficiency and Low Carbon Technologies
Lecture 1.4: A Whole Systems Approach to Energy Efficiency in New and Existing Systems
Chapter 2: Energy Efficiency Opportunities for Commercial Users
Lecture 2.1: The Importance and Benefits of a Front-Loaded Design Process
Lecture 2.2: Opportunities for Energy Efficiency in Commercial Buildings
Lecture 2.3: Opportunities for Improving the Efficiency of HVAC Systems
Chapter 3: Energy Efficiency Opportunities for Industrial Users
Lecture 3.1: Opportunities for Improving the Efficiency of Motor Systems
Lecture 3.2: Opportunities for Improving the Efficiency of Boiler and Steam Distribution Systems
Lecture 3.3: Energy Efficiency Improvements available through Co-Generation
1
International Energy Agency (2005) ‘World Energy Outlook 2005’, Press Releases, IEA, UK. Available at
http://www.iea.org/Textbase/press/pressdetail.asp?PRESS_REL_ID=163. Accessed 3 March 2007.
2
CSIRO (2006) Energy Technology, CSIRO, Australia. Available at www.det.csiro.au/PDF%20files/CET_Div_Brochure.pdf. Accessed 3
March 2007.
3
The Climate Group (2005) Profits Up, Carbon Down, The Climate Group. Available at
www.theclimategroup.org/assets/Carbon_Down_Profit_Up.pdf. Accessed 3 March 2007.
4
Energy Futures Forum (2006) The Heat Is On: The Future of Energy in Australia, CSIRO, Parts 1,2,3. Available at
http://www.csiro.au/csiro/content/file/pfnd.html. Accessed 3 March 2007.
Prepared by The Natural Edge Project 2007 (Hosted by GU and ANU)
Page 3 of 18
Module B: Understanding, Identifying and Implementing Energy Efficiency Opportunities for
Industrial/Commercial Users – By Sector
Chapter 4: Responding to Increasing Demand for Electricity
Lecture 4.1: What Factors are Causing Rising Peak and Base Load Electricity Demand in Australia?
Lecture 4.2: Demand Management Approaches to Reduce Rising ‘Peak Load’ Electricity Demand
Lecture 4.3: Demand Management Approaches to Reduce Rising ‘Base Load’ Electricity Demand
Lecture 4.4: Making Energy Efficiency Opportunities a Win-Win for Customers and the Utility: Decoupling
Energy Utility Profits from Electricity Sales
Chapter 5: Energy Efficiency Opportunities in Large Energy Using Industry Sectors
Lecture 5.1: Opportunities for Energy Efficiency in the Aluminium, Steel and Cement Sectors
Lecture 5.2: Opportunities for Energy Efficiency in Manufacturing Industries
Lecture 5.3: Opportunities for Energy Efficiency in the IT Industry and Services Sector
Chapter 6: Energy Efficiency Opportunities in Light Industry/Commercial Sectors
Lecture 6.1: Opportunities for Energy Efficiency in the Tourism and Hospitality Sectors
Lecture 6.2: Opportunities for Energy Efficiency in the Food Processing and Retail Sector
Lecture 6.3: Opportunities for Energy Efficiency in the Fast Food Industry
Module C: Integrated Approaches to Energy Efficiency and Low Emissions Electricity,
Transport and Distributed Energy
Chapter 7: Integrated Approaches to Energy Efficiency and Low Emissions Electricity
Lecture 7.1: Opportunities and Technologies to Produce Low Emission Electricity from Fossil Fuels
Lecture 7.2: Can Renewable Energy Supply Peak Electricity Demand?
Lecture 7.3: Can Renewable Energy Supply Base Electricity Demand?
Lecture 7.4: Hidden Benefits of Distributed Generation to Supply Base Electricity Demand
Chapter 8: Integrated Approaches to Energy Efficiency and Transport
Lecture 8.1: Designing a Sustainable Transport Future
Lecture 8.2: Integrated Approaches to Energy Efficiency and Alternative Transport Fuels – Passenger Vehicles
Lecture 8.3: Integrated Approaches to Energy Efficiency and Alternative Transport Fuels - Trucking
Chapter 9: Integrated Approaches to Energy Efficiency and Distributed Energy
Lecture 9.1: Residential Building Energy Efficiency and Renewable Energy Opportunities: Towards a ClimateNeutral Home
Lecture 9.2: Commercial Building Energy Efficiency and Renewable Energy Opportunities: Towards ClimateNeutral Commercial Buildings
Lecture 9.3: Beyond Energy Efficiency and Distributed Energy: Options to Offset Emissions
Prepared by The Natural Edge Project 2007 (Hosted by GU and ANU)
Page 4 of 18
Responding to Increasing Demand for Electricity
Lecture 2.1: What Factors are Causing Rising Peak and Base Load
Electricity Demand in Australia?5
Educational Aim
In the past many engineers have simply been asked to ensure that our societies can meet rising
electricity and energy demand through building more supply infrastructure. Often decision makers
have failed to ask the right questions, such as; why is electricity demand increasing so significantly?
And can it be better managed? This lecture seeks to provide a base understanding of the related
issues, through a consideration of the range of factors driving rising base and peak load electricity
demand. Lectures 4.2-4.4 will explore a range of options to strategically respond to such factors of
growth and deliver an effective combination of demand management and energy generation.
Essential Reading
5
Reference
Page
1. Hargroves, K., and Smith. M (2005) The Natural Advantage of Nations: Business
Opportunities, Innovation and Governance for the 21st Century, Earthscan,
London. Available at www.naturaledgeproject.net/NAON1Chapter3.6.aspx.
Accessed 10 October 2012.
pp 53-55
2. EMET Consultants Pty Limited (2004) The Impact of Commercial and Residential
Sectors’ Energy Efficiency Initiatives on Electricity Demand, Sustainable Energy
Authority of Victoria, Australia. Available at
www.ret.gov.au/documents/mce/energy-eff/nfee/_documents/consreport_07_.pdf.
Accessed 10 October 2012
pp 6-21
3. Wilkenfeld, G. (2007) A National Demand Management Strategy for Small AirConditioners, Prepared for the National Appliance and Equipment Energy
Efficiency Committee and The Australian Greenhouse Office. Available at
www.energyrating.gov.au/wpcontent/uploads/Energy_Rating_Documents/Library/Cooling/Air_Conditioners/200
422-ac-demandmanagement.pdf. Accessed 10 October 2012.
pp 1-8
4. Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly
Energy Efficiency, RMIT University, Australia. Available at
www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTER
NATIVESfinal1a.pdf. Accessed 10 October 2012.
pp 4-9
Peer review by Adjunct Professor Alan Pears - RMIT, and Dr Mike Dennis - Australian National University.
Prepared by The Natural Edge Project 2007 (Hosted by GU and ANU)
Page 5 of 18
Learning Points
Intuitively, one would assume factors such as increasing population, increased use of electrical
appliances and equipment and a growing economy would dictate energy use in society and be
driving increased energy production. But the main driver to build new power stations in
Australia currently, typically comes from the increasing seasonal peak energy demands for
cooling and heating poorly insulated and designed commercial and residential buildings.
Effectively the entire system is designed to ensure it meets these demand for air-conditioning
on those stinking hot 40 degree summer days in Australia. Then the electricity supply sector in
Australia carries a redundancy during the predominant non-peak periods… Once these new
power stations were built to meet peak energy demand, they made more money for the more
energy they sold. Hence there was little incentive for governments to encourage passive
cooling design, demand management and energy efficiency About 10 per cent ‘spare’ capacity
is required to meet the peak demand generated over 1 per cent of the year.6 …an effective way
to reduce electricity consumption is to focus on reducing daily and seasonal peak electricity
demand.
Hargroves, K. and Smith, M. (2007)7
1. In Australia, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) has
projected that demand for electricity will double by 2020.2 Clearly striving to meet such large
projected demand will make it very hard to also achieve the required reductions in greenhouse
gas emissions to the order of 60 percent or better by 2050.
2. The forecasted increases in electricity demand pose a dilemma for the electricity industry; on the
one hand they need to deliver a profitable operation, and on the other they are faced with
requirements over the coming decade to ‘Cap and Reduce’ greenhouse gas emissions under an
emissions trading scheme. Hence it is important to ask: what is driving rising electricity demand
in Australia? And can electricity services be provided to society through a combination of better
demand management and low carbon electricity generation infrastructure upgrades?
3. The challenge of meeting Australia’s summer peak period electricity demand is increasingly the
major factor driving the need to invest in new power stations. Over the last decade in Australia
the summer peak periods of electricity demand have eclipsed the winter peak demand periods. A
number of studies show that emissions from air-conditioning (heating and cooling) and lighting
from commercial and residential buildings make up the bulk of the summer peak period electricity
load. Typically about 30-40 percent of commercial sector demand and 40-50 percent of
residential sector demand on system during peak periods in summer is due to air-conditioning.8
4. The use of air-conditioners is growing rapidly in homes and small businesses, and could
conceivably double within 10 years. This rate of growth in air-conditioning use in both new and
old houses is increasing rapidly, according to Australian residential energy efficiency expert,
George Wilkenfeld.9 In addition householders are moving away from less energy intensive
evaporative units and towards reverse cycle air-conditioning units that operate during peak
6
IPART (Independent Pricing and Regulatory Tribunal of New South Wales) (1999) Regulation of network service providers: discussion
paper DP-34, IPART, Sydney; IPART (2002) Inquiry into the role of demand management and other options in the provision of energy
services: interim report, review report no. 02-1, IPART, Sydney.
7
Hargroves, K. and Smith, M. (2006) The Natural Advantage of Nations: Business Opportunities, Innovation and Governance for the 21st
Century, Earthscan, London, pp 53-55. Available at www.naturaledgeproject.net/NAON1Chapter3.6.aspx. Accessed 2 June 2007.
8
Wilkenfeld, G. (2004) A National Demand Management Strategy for Small Air-Conditioners, Prepared for the National Appliance and
Equipment Energy Efficiency Committee and The Australian Greenhouse Office. Available at
www.energyrating.gov.au/library/pubs/200422-ac-demandmanagement.pdf. Accessed 2 June 2007.
9
Ibid.
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Page 6 of 18
demand periods. In order to meet the demand in peak periods, which only accounts for a small
percentage of annual demand, new electricity supply infrastructure is projected to be needed
across the country. Put into perspective, about 10 percent ‘spare’ capacity is required to meet the
peak demand generated over only 1 percent of the year.10 This 10 percent of energy supply
capacity is then redundant during the predominant non-peak periods. Under current regulatory
frameworks the utilities are rewarded for finding ways to use this 10 percent and increase
consumption of electricity; the more energy they sell the more money the make.
5. In 2004, the Energy Supply Association of Australia estimated that in order to continue to supply
electricity to metropolitan Sydney this would require AUD$3.5 billion in network investment over
the next five years, and around 80 percent of that investment is needed to meet the peak load
demand. Therefore, another problem (both physical and financial) that rising electricity demand
from air-conditioning creates is the need for peak grid network augmentation and upgrades.
6. A study in Western Australia11 concluded that, ‘The cost of electricity infrastructure to meet the
peak demand from air-conditioners is significant and much larger than the price consumers pay
for the air-conditioners themselves... [this cost] is not recovered in the amounts consumers pay
for the electricity used by air-conditioners.’ Due to this alone, a household without an airconditioner is in effect cross subsidising an air-conditioned house by approximately AUD$75/yr.12
Other studies concluded that for every AUD$1000 a homeowner spends on an air-conditioner in
Sydney, AUD$6000 must be spent on upgrading the network, and a further AUD$600 on
additional peak generation. The air-conditioner only consumes AUD$120 of electricity per year
but as this adds to demand during the peak period it has far greater impact on the electricity
generation costs.13 In economic terms this amounts to a serious negative externality.
7. Since in the past there has been relatively little encouragement to reduce electricity consumption
through activities like legislated passive heating and cooling design of buildings, improved
insulation, demand management and energy efficiency options, this has created a ‘vicious cycle’.
The vicious cycle begins with demand rising and pressure to build new costly infrastructure to
meet this demand. All state governments in Australia are planning to build additional electricity
supply infrastructure to meet projected rising peak period electricity demand. However, as we
have pointed out, this will lead to large excesses in supply during non-peak periods, again
reducing political will from the supply industry for governments to invest in energy efficiency
programs.
8. This vicious cycle will be exacerbated by the fact that climate change will lead to more days per
annum above 35°C in Australia and thus greater demand for air-conditioners. A recent CSIRO
study estimated that a temperature rise of 1 degree (relative to 1990) from climate change would
increase the number of days above 35°C by 18 percent in South Australia and 25 percent in the
Northern Territory.14 The report indicated that an average temperature increase of just 1 degree
will also increase peak electricity demand in Adelaide and Brisbane by between 2-5 percent. An
average temperature increase of 2-3 degrees could increase peak electricity demand by 3-15
10
IPART (Independent Pricing and Regulatory Tribunal of New South Wales) (1999) Regulation of network service providers, Discussion
Paper DP-34, IPART, Sydney; IPART (2002) Inquiry into the role of demand management and other options in the provision of energy
services, Interim Report, review report no. 02-1, IPART, Sydney.
11
Office of Energy (2004) Information Paper: The Impact of Residential Air-Conditioning on the Western Australian Electricity System,
Office of Energy, WA. Available at http://www.energy.wa.gov.au/cproot/603/2759/Air%20conditioning%20paper.pdf. Accessed 4
September 2007.
12
Ibid.
13
Energy Retailers Association of Australia (2004) Submission to Productivity Commission Inquiry ‘Energy Efficiency’, Energy Retailers
Association of Australia.
14
Preston, B. and Jones, R. (2006) Climate change impacts on Australia and benefits of early action to reduce global greenhouse gas
emissions, written for the Australian Business Roundtable on Climate Change. Available at http://www.csiro.au/resources/pfbg.html.
Accessed 2 June 2007.
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Page 7 of 18
percent in Adelaide, Brisbane and Melbourne. An increase of 4 or more degrees, at the upper
end of forecast IPCC projections, would increase peak electricity demand by up to 25 percent in
Adelaide, Brisbane and Melbourne.15
9. Clearly it is vital that we understand in detail what contributes to rising peak load electricity
demand in Australia. Studies show that the residential and commercial sectors contribute to
summer peak periods not just simply through air-conditioning but also through other aspects
such as lighting, cooking, hot water heating, and refrigeration (see Figures 4.1.4, 4.1.6, and
4.1.7). Professor Alan Pears from RMIT University points out that, ‘Figure [4.1.7] shows that as
well as air-conditioning, refrigeration is a major summer peak demand issue. The Figure shows
that by early evening, even cooking and lighting are beginning to contribute significantly to
demand. Even pool pumping shows up as a contribution. So a combination of appliance and
equipment energy efficiency improvement, fuel switching away from electricity for cooking and
hot water, and load management of pool pumps, hot water services and other equipment
(including computers, standby power, etc) can help reduce peak load and address electricity
infrastructure costs.’16
10. Behind the steady rise in peak load is also a consistent rise in the base load electricity demand in
Australia. Every 20 years Australia’s overall electricity usage tends to double. Figure 4.1.10
shows that industry, the commercial and residential sectors, as well as overnight lighting (public
street lighting), are the most significant users of base load electricity. Over the next 20 years
demand for base load energy could also rise from increased demand in Australia for desalination
plants and for plug-in hybrid vehicles that may be recharged over night in peoples homes.
15
Preston, B.L. and Jones, R.N. (2006) Climate Change Impacts on Australia and the Benefits of Early Action to Reduce Global
Greenhouse Gas Emissions, A consultancy report for the Australian Business Roundtable on Climate Change, CSIRO, ACT. Available at
http://www.csiro.au/files/files/p6fy.pdf. Accessed 3 March 2007.
16
Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly Energy Efficiency, RMIT University, Attachment B
Megawatts or Negawatts – Distributed and Demand-Side Alternatives to New Generation Requirements A Strategic Review. Available at
www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdf. Accessed 2 June 2007.
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Page 8 of 18
Brief Background Information
The International Energy Agency forecasts that, ‘if policies remain unchanged, world energy demand
is projected to increase by over 50 percent between now and 2030’.17 CSIRO has projected that
energy demand will double in Australia by 2020. Clearly striving to meet such large projected
demand will make it very hard to also achieve the required reductions in greenhouse gas emissions.
Therefore it is important to ask the following question.
What is Driving Rising Peak Electricity Demand in Australia?
This question was asked in The Natural Edge Project publication The Natural Advantage of Nations:
Business Opportunities, Innovation and Governance for the 21st Century, where it stated:18
Intuitively, one would assume factors such as increasing population, increased use of
electrical appliances and equipment and a growing economy would dictate energy use in
society and be driving increased energy production. But the main driver to build new power
stations in Australia currently typically comes from the increasing seasonal peak energy
demands for cooling and heating poorly insulated and designed commercial and residential
buildings. Effectively the entire system is designed to ensure it meets these peak periods of
demand mid afternoon for air-conditioning on those stinking hot 40 degree summer days in
Australia19 (and in the morning and evenings on cold days in the winter).
Typically about 30-40 percent of commercial sector demand and 40-50 percent of residential sector
demand on system peak during summer is now due to air-conditioning, and the two loads are of
similar magnitude.20 Air-conditioning use is growing rapidly in homes and small businesses, and
could conceivably double within 10 years in Australia. This has created a ‘vicious cycle’ for
governments from which they, to-date, have not been able to extricate themselves. All state
governments are planning to build additional electricity supply infrastructure to meet projected rising
peak load electricity demand, but this will lead to large excesses in supply during non-peak periods,
again reducing political will from the supply industry for governments to invest in energy efficiency
programs.
The ‘vicious cycle’ has become an expensive exercise for both governments and taxpayers around
Australia. Much of our electricity supply infrastructure is built to meet daily and seasonal peak loads,
which only account for a small percentage of annual demand. About 10 percent ‘spare’ capacity is
required to meet the peak demand generated over only 1 percent of the year.21 The latest periodbased demand duration curve for South Australia (representing the total electricity energy delivered
annually to the main transmission system) is shown in Figure 4.1.1. This means extra infrastructure
costs for governments and tax payers.
17
International Energy Agency (2005) World Energy Outlook 2005: Middle East and North Africa Insights, IEA. Available at
http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1540. Accessed 23 April 2007.
18
Hargroves, K. and Smith. M. (2005) The Natural Advantage of Nations: Business Opportunities, Innovation and Governance for the 21 st
Century, Earthscan, London, pp 53-55.
19
Since the 1990s the summer peak load electricity demand has exceeded the winter peak load demand even in states like Victoria due to
the steady increase in the percentage of homes using air-conditioning.
20
Wilkenfeld, G. (2007) A National Demand Management Strategy for Small Air-Conditioners, Prepared for the National Appliance and
Equipment Energy Efficiency Committee and The Australian Greenhouse Office. Available at
www.energyrating.gov.au/library/pubs/200422-ac-demandmanagement.pdf. Accessed 2 June 2007.
21
IPART (Independent Pricing and Regulatory Tribunal of New South Wales) (1999) Regulation of network service providers, Discussion
Paper DP-34, IPART, Sydney; IPART (2002) Inquiry into the role of demand management and other options in the provision of energy
services, Interim Report, review report no. 02-1, IPART, Sydney.
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Page 9 of 18
Figure 4.1.1. South Australian annual electricity load duration curve
Source: Tothill, K. (2001)22
Air-Conditioning Usage is Rising Rapidly
Even in the colder states like Victoria and Tasmania the summer peak load is larger than the winter
peak. From the mid 1990’s, rapid increases in the penetration of air-conditioners (see Figure 4.1.2),
particularly in the residential sector, has resulted in Victorian peak electricity demands consistently
occurring during summer.
Figure 4.1.2. Penetration of residential air-conditioners – Victoria 1966-2015
Source: Tothill, K. (2001)23
22
Tothill, K. (2001) SA Government Task Force Electricity Demand Side Management and Supporting Measures, ElectraNet SA. Available
at www.sustainable.energy.sa.gov.au/pdfserve/programs/dsm/elec_dsm/submissions/pdf/21_ElectraNet.pdf. Accessed 2 June 2007.
23
Ibid.
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Page 10 of 18
Prior to the increase in the use of air-conditioners in summer the highest peak demand consistently
occurred in the winter season in Victoria. A 2004 report investigating Electrical Peak Load Analysis
for Victoria 1999 – 200324 found that, ‘summer system peaks invariably coincide with severe weather
conditions (high temperatures). The ten highest peak demand days between 1999 and 2003 all had
maximum daytime temperatures of 35°C or more. While other factors may be playing a part, it seems
apparent that these peaks in electricity demand are being driven largely by the use of space
conditioning equipment (principally refrigerative air-conditioners in the case of Victoria).’
Figure 4.1.3. Summer electricity load pattern – proportion of major components
Source: EMET Consultants (2004)25
In a study commissioned by the Sustainable Energy Authority of Victoria (now Sustainability Victoria)
in 2004 by EMET Consultants similar results for NSW were found.26 This study showed that airconditioning in the commercial and residential sector contributes disproportionately to the summer
peak load. Figure 4.1.3 shows the electricity demand patterns derived by EMET for the New South
Wales electricity grid system for the days of peak demand in the 2003 summer. 27 Each of these has
been indexed to represent a generic pattern of consumption for these peak days.
The EMET study also provides one of the few breakdowns of residential and commercial building
contributions to the summer peak load. Figures 4.1.4 and 4.1.5 both show the remarkable
contribution to summer afternoon peak load that air-conditioning makes in both the NSW residential
and commercial sectors.
24
Energy Efficient Strategies (2004) Electrical Peak Load Analysis Victoria 1999 – 2003: Executive Summary of Report, VENCORP and
the Australian Greenhouse Office, p 1. Available at http://www.energyrating.gov.au/library/pubs/2005-ac-peakloadexecsumm.pdf.
Accessed 2 June 2007.
25
Ibid, p 7.
26
EMET Consultants Pty Ltd (2004) The Impact of Commercial and Residential Sectors: Energy Efficiency Initiatives on Electricity
Demand, Sustainable Energy Authority of Victoria. Available at www.nfee.gov.au/public/download.jsp?id=193. Accessed 2 June 2007.
27
Ibid, p 7.
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Figure 4.1.4. NSW residential sector, 2003 – breakdown of peak summer demand pattern by
application
Source: EMET Consultants (2004)28
Figure 4.1.5. NSW commercial sector, 2003 – breakdown of peak summer demand pattern by
application
Source: EMET Consultants (2004)29
28
Ibid, p 16.
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These results are consistent with findings in overseas markets which have similar climates to
Australia, such as California in the USA, as seen in Figure 4.1.6. Again the contribution of airconditioning to the California summer peak load is remarkable.
Figure 4.1.6. End-use structure of 1999 California summer-peak-day state wide load (LHS) with
1999 California summer peak residential end use structure (RHS)
Source: Brown, R.E. et al (2002)30
29
Ibid, p 10.
Brown, R.E. and Koomey, J.G. (2002) ‘Electricity Use in California: Past Trends and Present Usage Patterns,’ Energy Policy, LBL47992, cited in Lovins, A. et al (2002) Small Is Profitable: The Hidden Economic Benefits of Making Electrical Resources the Right Size,
Rocky Mountain Institute Publications, Colorado. Note that all but the bottom two segments are commercial and residential building loads,
plus a breakdown of the 1999 California summer peak residential sector load. ‘Miscellaneous’ includes lights, pools, spas, waterbeds, and
small appliances.
30
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The rate of growth in air-conditioning use in both new and old houses is growing rapidly, and
according to Australian residential energy efficiency expert, George Wilkenfeld, this is due to the
following factors: 31
-
‘A decline in costs of air conditioners due to the rapid growth of manufacture in China and
other Asian countries;
-
Rising disposable income;
-
A masking of the real costs of domestic air conditioner operation through tariff cross
subsidies;
-
The long-term promotion (including by financing and concessional tariffs) of air-conditioning
by some electricity suppliers through the 1990s;
-
The increase in the type of housing forms, site densities and urban environmental factors that
make reliance on natural ventilation more difficult;
-
The lack of significant improvement in building shell efficiency in recent years; and
-
Air conditioners were formerly installed some time after construction of new dwellings, but are
now being installed in a rising proportion of dwellings at the time of construction.’
Residential air-conditioning energy peak loads and overall consumption during summer could
potentially grow further, because of increasing average dwelling size, the tendency to cool the entire
house rather than just one or two rooms, and more frequent days of extreme high temperature due to
climate change. A recent CSIRO study32 outlined how the IPCC forecasted temperature rises caused
by human induced climate change will further exacerbate the number of hot days within each
summer in Australia, further increasing air-conditioning loads and peak electricity demand. The study
estimated that a temperature rise of 1 degree (relative to 1990) from climate change would increase
the number of days above 35°C by 18 percent in South Australia and 25 percent in the Northern
Territory.33 The report indicated that an average temperature increase of just 1 degree will also
increase peak electricity demand in Adelaide and Brisbane by between 2-5 percent. An average
temperature increase of 2-3 degrees could increase peak electricity demand by 3-15 percent in
Adelaide, Brisbane and Melbourne. An increase of 4 or more degrees, at the upper end of forecast
IPCC projections, would increase peak electricity demand by up to 25 percent in Adelaide, Brisbane
and Melbourne.34
Wilkenfeld warns that, ‘Given the combination of high growth rates in ownership and increasing use
per air conditioner, it is conceivable that the energy consumption and peak demand of airconditioning in the residential sector could double in the next 10 years.’35
There is no doubt that air-conditioning is a large and rapidly growing component contributing to
demand in peak periods, but it is not the only component. As Professor Alan Pears from RMIT
University points out; ‘Figure [4.1.7] shows that as well as air-conditioning, refrigeration is a major
summer peak demand issue. The Figure shows that by early evening, even cooking and lighting are
31
Wilkenfeld, G. (2004) A National Demand Management Strategy for Small Air-Conditioners, Prepared for the National Appliance and
Equipment Energy Efficiency Committee and The Australian Greenhouse Office. Available at
www.energyrating.gov.au/library/pubs/200422-ac-demandmanagement.pdf. Accessed 2 June 2007.
32
Preston, B.L. and Jones, R.N. (2006) Climate Change Impacts on Australia and the Benefits of Early Action to Reduce Global
Greenhouse Gas Emissions, A consultancy report for the Australian Business Roundtable on Climate Change, CSIRO, Canberra, ACT.
Available at http://www.csiro.au/files/files/p6fy.pdf. Accessed 3 March 2007.
33
Ibid.
34
Ibid.
35
Wilkenfeld, G. (2004) A National Demand Management Strategy for Small Air-Conditioners, Prepared for the National Appliance and
Equipment Energy Efficiency Committee and The Australian Greenhouse Office. Available at
www.energyrating.gov.au/library/pubs/200422-ac-demandmanagement.pdf. Accessed 2 June 2007.
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beginning to contribute significantly to demand. Even pool pumping shows up as a contribution. So a
combination of appliance and equipment energy efficiency improvement, fuel switching away from
electricity for cooking and hot water, and load management of pool pumps, hot water services and
other equipment (including computers, standby power, etc) can help reduce peak load and address
electricity infrastructure costs.’36 Figures 2.1.4 to 2.1.6 also showed that these factors contribute to
peak load electricity demand.
Figure 4.1.7. 1994 NSW residential electricity demand on peak summer day at four times
compared with average annual demand
Source: Pears, A. (2005)37
It is worth noting that as well as significantly contributing to the electricity demand during peak
periods in summer, the residential sector also contributes significantly to the morning and evening
peak periods in winter through mainly heating loads.
36
Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly Energy Efficiency, RMIT University, Attachment B
Megawatts or Negawatts – Distributed and Demand-Side Alternatives to New Generation Requirements A Strategic Review. Available at
www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdf. Accessed 2 June 2007.
37
Ibid, p 29.
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Figure 4.1.8. 2003 NSW winter electricity load pattern - proportion of major components
Source: EMET38
Figure 4.1.9. NSW residential sector – breakdown of peak winter demand pattern by application
Source: EMET39
38
EMET Consultants Pty Ltd (2004) The Impact of Commercial and Residential Sectors: Energy Efficiency Initiatives on Electricity
Demand, Sustainable Energy Authority of Victoria. Available at www.nfee.gov.au/public/download.jsp?id=193. Accessed 2 June 2007.
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What Contributes to Base Load Electricity Demand in Australia?
Base load electricity demand refers to the amount of electricity used overall by an economy 24 hours
a day. Over the last century, base load electricity demand has doubled every 20 years or so. Building
more supply to meet this trend involves investing large amounts of capital in generation and network
assets. To date there has been no study published that provides a detailed analysis of what
contributes to base load electricity demand for the whole of Australia. On a state level, Professor
Alan Pears analysed Victorian base load electricity demand and the results are shown in Figure
4.1.10, which provides a breakdown of Victorian electricity consumption by end-use sector since
1973.40 The study shows that base load in Victoria is dominated by the residential sector, metal
products industry (mainly aluminium), and the commercial sector. It also shows that electricity use by
the electricity generation industry itself is also substantial.
Figure 4.1.10. Trends in Victorian electricity usage by end-use sector in Gigawatt-hours per year
(GWh), 1973-74 to 2000-01
Source: Pears, A. (2005) with data from ABARE (2004)41
Many experts assume that the residential and commercial sectors contribute little to base load
demand as their demand patterns are thought to come is spikes, however a substantial proportion of
commercial and residential sector demand is, in fact, base load.42 A study of NSW commercial sector
electricity demand in 1996 found that commercial sector electricity base load demand was more than
half of its annual average demand.43
39
Ibid, p 16.
Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly Energy Efficiency, RMIT University, Australia.
Available at www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdf. Accessed 2 June 2007.
41
ABARE (2004) Energy Data, ABARE. Available at www.abare.gov.au. Accessed 2 June 2007.
42
Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly Energy Efficiency, RMIT University, Australia.
Available at www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdf. Accessed 2 June 2007.
43
NSW Department of Energy (1996) Energy Use in the NSW Commercial Sector, NSW Department of Energy, Sydney.
40
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Optional Reading
1. APEC Conference – Air-conditioning & energy performance - the next 5 years. This conference
was held at the Sydney Convention and Exhibition Centre on 9 June, 2004 with workshops
running on 7 & 8 June. Available at www.energyrating.com.au/pubs/2004apec-comminiques.pdf.
Assessed10 October 2012.
2. Brown, R. E. and Koomey, J. G. (2002) ‘Electricity Use in California: Past Trends and Present
Usage Patterns,’ Energy Policy.
3. Energy Efficient Strategies (2004) Electrical Peak Load Analysis Victoria 1999 – 2003: Executive
Summary of Report, VENCORP and the Australian Greenhouse Office, p 1. Available at
www.energyrating.com.au/library/pubs/2005-ac-peakload.pdf. Accessed 10 October 2012.
4. Office of Energy (2004) Information Paper: The Impact of Residential Air-Conditioning on the
Western Australian Electricity System, Office of Energy, WA. Available at
www.docstoc.com/docs/24750932/INFORMATION-PAPER. Accessed 10 October 2012.
5. Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly Energy
Efficiency, RMIT University, Australia. Available at
www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1
a.pdf. Accessed 10 October 2012.
6. Tothill, K. (2001) SA Government Task Force Electricity Demand Side Management and
Supporting Measures, ElectraNet SA. Available at
http://s3.amazonaws.com/zanran_storage/energy.sa.gov.au/ContentPages/17154375.pdf.
Assessed 10 October 2012.
Key Words for Searching Online
Peak Load, Peak Electricity Demand, Energy Efficient Air-Conditioning, Energy Efficiency in the
Home, Green Building tips, Green Building Council.
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