Solar electricity kicks in!

There has been considerable public discussion regarding the reasons for rising electricity prices. This debate has become an extension of the carbon price debate, which I have discussed in previous blogs. An issue, which has emerged from this debate is that the cost of transmitting electricity from the power station to the end user is more than 50 per cent of the total electricity cost.

The peak power demand historically occurred during winter evenings due to the combined impact of heating, cooking, lighting and hot water usage. The need to reduce this peak, led to the introduction of off peak hot water. This meant the supply of electricity to the hot water system was controlled by the supply authorities – not the user. The incentive for the user to lose some control over hot water availability was the reduction of electricity prices. The lower prices charged for off peak power were a result of lower capital costs for power generation and distribution through spreading the load.

The past decade has resulted in a new peak demand occur during mid afternoon on hot days when air conditioner usage is at its maximum.

South East Queensland has a new peak, which is 14 per cent above what it was several years ago. This has resulted in rolling blackouts, stress on distribution networks and a rapid increase in capital spending on poles, wires and power transformers. There has been some recent public discussion about users of air conditioning systems being subsidised by those who do not use air conditioners. This is a result of the increased cost of electricity caused by the peak demand.

One suggested solution was to have the ability to remotely switch off air conditioning in peak periods, but such a radical suggestion may be hard to sell.

The recent report from Ergon Energy in Queensland (source AAP) provides some hope that solar power units have had a significant impact on peak electricity demand.

The recent December heat wave in Queensland resulted in a significant 14 per cent reduction when compared to the previous peak. Most of this reduction was attributed to the contribution solar power units made to lowering peak demand. Typically the maximum output of solar power units coincides with the maximum air conditioning demand in heat wave conditions.

Ultimately we hope the subsidies paid to the owners of solar power units will benefit all power users through the reduction in peak power.

I look forward to seeing if the observations Ergon has made are repeated nationwide.