WA households still power hungry

New technology is leading to a dramatic reduction in per capita power use around Australia, a new report has found, but Western Australia has bucked the trend, as the only state where residential energy consumption is expected to increase over the coming decade.

The Australian Energy Market Operator also found that WA continues to have a large amount of spare capacity in the South West Energy Network.

It said the amount of generation capacity required in the SWIS to efficiently meet forecast demand over the next two years was 4,552 megawatts.

By comparison, the current installed capacity in the SWIS is 5,618MW.

The Barnett government has foreshadowed plans to shut down some of the state’s power stations to reduce the surplus, and is preparing an electricity market review to determine the best way forward

The AEMO report also quantified the impact of new technology.

Chief cxecutive Matt Zema said while households today used more lighting, had larger televisions, more web-connected devices, larger capacity whitegoods, and more heating and cooling capacity, the growth in these services had not resulted in more electricity being consumed from the grid.

Mr Zema said these new and improved appliances were replacing energy intensive appliances such as halogen lights, plasma televisions, desktop computers and stereos.

Despite an expected population growth of 30 per cent, operational consumption across the National Electricity Market (which excludes WA) is forecast to remain flat over the coming 20 years.

Mr Zema said another factor was the increased number of consumers producing their own electricity from rooftop solar photovoltaic (PV) and using battery storage, which was offsetting demand for electricity supplied from the grid.

“Projected energy efficiency savings by the year 2035–36 are expected to total around 27,000 GWh,” he said.

“This translates to an equivalent of close to 15 per cent of current grid-supplied electricity use.”

While the WA market is subject to the same influences, the state is expected to record a 9.7 per cent increase in electricity consumption in the SWIS over the coming 10 years.

Residential consumption in WA is forecast to grow by 7 per cent over this period, whereas a reduction is forecast in every other state.

Business consumption in WA is forecast to grow by 10 per cent, with only Queensland having higher growth.

The AEMO said the higher residential consumption in WA was driven by two main factors, including current market regulation.

It assumed a higher population growth rate of 1.7 per cent per annum in WA relative to a national average of 1.3 per cent, leading to more houses being built.

It also noted that a relatively low proportion of ‘non-contestable’ customers in the SWIS (i.e. households and small businesses) were on a tariff that charges higher prices for consuming electricity during periods of high demand.

For example, most residential customers are on the A1 tariff, which charges the same price regardless of when electricity is consumed.

The AEMO said this provided little incentive for non-contestable customers to consume less electricity during peak times.

It also noted the government’s electricity market review was actively considering the introduction of full retail contestability.

Mr Zema said annual peak demand in the SWIS was one area already impacted by changing consumer behaviour and emerging technologies.

“Annual peak demand in the SWIS has historically occurred on a late afternoon in February. However, three of the last five annual peaks have occurred later in the day and earlier in the year, between early January and early February,” he said.

“This trend is primarily driven by the rapid take-up of rooftop solar PV, customers monitoring and lessening their consumption to reduce their exposure to capacity cost payments, and changing weather and temperature conditions.

Mr Zema said this made it harder to forecast peak demand and increased the risk of procuring too much or too little capacity.

The state government has cited the risks associated rapid technological change as one reason why it makes sense to privatise Western Power.

Synergy chairman Lyndon Rowe has also cited technological change as one of the major challenges facing the state’s major generator and retailer of electricity.