Case Study: Managing peak electricity demand in South Australia

Electricity demand refers to the amount of electricity required by households, businesses and industry in the state. Demand management is managing when and how electricity is used to ensure a reliable supply.

On some days South Australia’s demand for electricity can be more than double the average demand on a typical day. This is described as peak demand. Peak demand only occurs a few times each year on extremely hot summer days when air conditioners are being run in households in addition to other appliances and while the commercial and industrial sector is consuming power.

If demand is higher than supply it can lead to power outages which are managed across the national grid by the Australian Energy Market Operator  (AEMO) in consultation with the Government of South Australia and SA Power Networks  (formerly ETSA Utilities).

Issues with peak demand

South Australia's generally mild climate with occasional severe heat waves results in a very 'peaky' electricity demand profile compared to other states and jurisdictions in the National Electricity Market.

The increasing use of air conditioners in homes is a significant cause of the peak in the residential electricity sector.

Providing the infrastructure to supply large quantities of electricity for very short periods to meet peak demand leads to increased generation and network costs. This places upward pressure on South Australia's electricity prices.

The state's electricity demand profile also increases the risk of supply interruptions during heat waves, as the capacity of the system is tested by extreme demand.

Measures to manage peak demand

Historically meeting peak demand has been addressed through building additional infrastructure - e.g. power stations, or upgrading network capacity. While this approach ensures demand is met, it also results in increased costs which are passed onto consumers.

Minimum Energy Performance Standards

South Australia has been a key player in developing national minimum energy performance standards (MEPS) for air conditioners before they can be sold in Australia. These requirements will reduce the amount of energy they consume.

Energy efficient housing

All new homes and extensions built in South Australia need to achieve a 6-star level of energy efficiency, as required under the Development Act 1993 . Homes incorporating sound environmental design principles can minimise heating and cooling bills.

Other strategies

Additional measures are being investigating, both nationally and within the state including:

l   Pricing changes - offering electricity customers incentives to reduce their electricity use during peak times.

l   Giving customers a better understanding of their electricity use - technology is available such as new generation electricity meters and in-home displays that provide electricity customers with the ability to track their electricity use and have greater control over their appliance use during peak times.

l   Direct load control - providing customers with incentives for helping relieve local peak pressures by turning off appliances or reducing their use during peak times.

l   Encouraging more commercial distributed generation solutions - where electricity is generated closer to the electricity customer (e.g. solar PV panels or wind turbines) local peak demand pressures can be relieved.

l   Encouraging electricity customers to self-generate (e.g. solar PV panels) and potentially store energy to use during peak times.