Thursday, October 4th, 2012

Smart customers could be saving hundreds of dollars off their annual power bills through smart appliances, but they need smart power companies.

Smart consumers are increasingly looking for smarter ways to save money as power prices soar. Smart appliances embed the technology for reductions in annual power bills of hundreds of dollars. Consumers are now waiting for the combination of communications technology and financial incentives from power companies that will automatically manage demand for electricity and generate savings in the process.

According to energy research specialist Energeia, automated electricity demand management will increasingly be offered by power companies and make these savings available to Australian households over the next 10 years.

“By 2022, we expect power companies to be managing 1,200 MW of load across 2 million households,” said Managing Director Ezra Beeman. “That is equivalent to around 4 new gas-fired peaking power generators.”

This level of demand management would not only delay the need to build new power plants, it would also reduce the investment needed in the network of poles and wires. Some 10% of electricity supply infrastructure is used only during periods of peak demand, i.e. less than 1% of the time. Everyone pays for this additional infrastructure through power bills, so it is in everyone’s interest to reduce peak demand. According to the Australian Energy Market Commission, the residential contribution to the peak can be as high as 35–45% (Draft Report: Power of choice - giving consumers options in the way they use electricity, p. 8).

Despite the obvious benefits from encouraging households to purchase smart appliances and use them in a smart way, not much has been done in Australia so far, with the exception of the AusGrid Smart Grid, Smart City pilot in Newcastle, a demand management program in Queensland and the rollout of smart metering in Victoria.

Energeia’s second annual report on residential demand management, Australia’s Residential Energy Management Market to 2022, subtitled Victoria is the Place to Be, examines the key state differences and their implications for the residential energy management market.

Following trials with time-of-use pricing and automated load management devices under Queensland Government’s Energy Conservation and Demand Management Program, Energex has committed to a program of installing ‘peak smart demand response enabling devices’ and offering financial incentives to households to participate in peak load reduction. In this respect Queensland is well ahead of the other states.

However, the Queensland approach is not compatible with the latest communications-reliant technologies (e.g. ‘Cloud’-based services) that require smart meters. Victoria is the only state so far to push ahead with smart metering. This has placed this state in an excellent position to develop programs for residential demand management when price controls are relaxed over the next couple of years.

“It may soon pay handsomely for smart consumers in Victoria and Queensland to buy appliances compatible with Australian Standard AS 4755,” said Mr Beeman. “On the other hand, consumers in New South Wales and South Australia could be missing out on hundreds of dollars annually no matter how smart they are.”

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Energeia is a Sydney based independent energy industry specialist providing research and advisory services to organisations focused on the natural gas and electricity industries.
Angela Bradley
P: +61 429 017 167


Energy policy power prices electricity smart appliances smart grid



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