The residential sector is responsible for 25 per cent of the National Energy Market (NEM). The Australian Energy Market Commission (AEMC) in their ‘Power of choice review’ is looking at possible changes to the National Electricity Market to help consumers better manage their electricity consumption and bills.

The key issue identified by AEMC is that peak electricity demand is growing at three times the rate of total average demand. Put basically, this means households are using less electricity but want to use it at the same time by using appliances such as air conditioners on hot days. As a result the electricity networks are being engineered to meet this peak demand which in-turn has been the main driver for electricity price increases.

The AEMC review stated that the drivers of demand are ‘not easily changed’ and may be harder to change than average demand.  One suggestion to curb the rise of peak demand is to implement ‘time of use’ billing but this is only feasible for those who have interval or ‘Smart metering’.

This issue is being investigated by the Federal Government’s Senate inquiry into Australian electricity prices. The inquiry has been asked to investigate “the opportunities and possible mechanisms for the wider adoption of technologies to provide consumers with greater information to assist in managing their energy use”. This could be interpreted as a national roll-out of smart meters and pressure for the introduction of time-of-use charges.

What the AEMC and Senate inquiry reinforce is the converging of information technology (IT) and the electro-technology sectors. Whereas these segments were once performed in isolation, it is now becoming increasingly difficult to carry out an installation without the two being linked in some way.

The AEMC review stated ‘that the vast majority of residential consumers do not have the adequate information or knowledge about the costs of their consumption’ it also acknowledged that consumers would benefit from ‘appropriate enabling metering technology’. For those in Victoria where ‘Smart Metering’ is being rolled out, electricity distributors and retailers such as Origin Energy are launching web based applications so that households can monitor their electricity usage.

While governments and regulators grapple with the issues, electricity retailers are positioning themselves in the market by the types of energy saving services they provide.  This provides electrical contractors a real opportunity to offer customers energy management solutions that can be as simple as motion sensors for lighting through to total home automation systems.

NECA through its EcoSmart Electricians program have been have been a leader in the field of energy efficiency providing training to electricians for a number of years. This program is set to be relaunched with an increased focus on energy management and energy efficient lighting including LEDs. NECA is also looking to provide training in Energy Assessment of residential, office and retail premises so electricians can offer customers an extra service as part of a whole energy efficiency package.

There are a couple of real indicators that suggest Australian households are concerned about electricity prices. Firstly, a recent poll conducted by Essential Research found that 42% of respondents believe that electricity and gas prices have ‘increased a lot over the last few years’. A second indictor has been the adoption of solar PV right across the country. In fact that 9% of Australian residents now have a solar PV system installed on their home. It could be argued that his take up is a mixture of good marketing by solar companies and households wanting to do something about their climbing electricity bills and not knowing what they can do.

For several years consumers have been encouraged to change their behaviour in order to save electricity but it is becoming more evident  homeowners would prefer to use technology to do this for them. The good news for electrical contractors is that only electricians can install such technologies and providing customers with solutions that meet their needs.

While the residential sector is only a quarter of the electricity market it is the sector of the market that influences peak demand the most and is therefore the area of real interest for governments and regulators. There is no doubt that decision makers are keen to implement policies that will reduce the increases in peak electrical demand. Unfortunately one of the main ways to do this is for regulators to introduce metering and pricing methods that will discourage electricity use during peak times.

The key message is that governments have now clearly identified the cause of much of the increases in electricity prices and feel compelled to do something about it. At the moment all electricity consumers are paying for improvements to the network to cater for increases in peak demand but with more advanced metering in the future, those who are using electricity during peak times will have to pay a premium for the privilege.

This article was provided by EcoSmart. For further information, please contact EcoSmart on 1300 300 031 or visit the EcoSmart Electricians website www.ecosmartelectricians.com.au