30
Reducing electricity use in Victoria through demand management Dr. Philip Wallis Research Fellow, Uniwater Akaash Sachdeva Research Assistant, MSI
Reducing electricity use in
Victoria through demand
management
Dr. Philip Wallis
Research Fellow, Uniwater
Akaash Sachdeva
Research Assistant, MSI
MSI Collaborative Project
• Water, energy and
transport
• Infrastructure 21 Summit
(Brisbane, October 2008)
• Working group on
efficiency and demand
management
Full report at:
www.ausdavos.org
590%
217%
206%
73%
Project Rationale
Sources: ABS, ABARE and Melbourne Water
Per capita
consumption
Indexed to 1961
0
100
200
300
400
500
600
700
1960 1980 2000 2020
Ind
ex o
f p
er
cap
ita c
on
su
mp
tio
n (%
)
Year
ElectricityFuelPopulationWater
Electricity demand by end-use
Appliances
Demand Management in California
Sources: ABARE 2008, ABS 2008; Energy Information Administration (US), Annual Energy Review 2007
TotalPer capita
Objectives
• Helen Macpherson
Smith Funded
• Four Stages:
1. DM measures
2. Victorian context
3. Recommendations
4. Engagement
History of the situation
1921 – State Electricity Commission of Victoria
1982 – Reforms
1990 – Partial privatisation
1992 – Openly competitive market
1994 – Market unbundling
1998 – National Electricity Market (NEM)
2002 – Full retail competition
Industry structure
AGL
855 MW
Energy
Brix Aust.195 MW
PowercorSPI
Electricity
United
EnergyJemena
SP AusNet
(Network
owner)
AEMO
(Network
services)
Victoria
Electricity
CitipowerDistribution
businesses
Retailers
Transmission
businesses
Generators
in Victoria*
AGLCountry
Energy
Energy
Australia
Momentum
Energy
Origin
EnergyPowerdirect Red Energy
TRUenergy
Australian
Power and
Gas
Click Energy
Neighbour-
hood Energy
Simply
Energy
Hazelwood
Power 1600 MW
Loy Yang
Mgt. Co.2120 MW
Snowy
Hydro1812 MW
TRUenergy
1512 MW
Ecogen
Energy 932 MW
IPM
Australia 1000 MW
Valley
Power 300 MW
Pyrenees
Wind 192 MW
Pacific
Hydro 216 MW
SECV
150 MW
Aurora
Energy 94 MW
Energy
Pacific 48 MW
EDL Group
30 MW
Organisations
SP AusNet
AGL
EcogenEnergy
Valley Power
Pyrenees Wind
SECV Aurora Energy
Loy Yang Mgt. Co.
Snowy Hydro
Hazelwood Power
TRUenergy
IPM Australia
Pacific Hydro
Energy BrixAust.
Energy Pacific
EDL Group
Generators
Powercor
SPI Electricity
United Energy
Jemena
Citipower
Transmission
Victoria Electricity
AGL
Country Energy
Energy Australia
Momentum Energy
Origin Energy
Powerdirect
Red Energy
TRUenergy
Australian Power and Gas
Click Energy
Neighbour-hood Energy
Simply Energy
Retailers
Distribution
ELECTRICITY
INDUSTRY
Essential Services
Commission
GOVERNMENT
Australian Energy
Regulator
Energy Safe Victoria
Federal
Victorian
Energy and Water Ombudsman
Victoria
Department of Primary
Industries
Sustainability VictoriaAustralian
Energy
Market
Commission
Ministerial Council
on Energy
Local Councils
Environmental Protection
AgencyDepartment of
Climate Change
COAG
AustralianCompetition
and Consumer
Commission
FederalTreasury
Australian Energy
Market
Operator
Project, programs and policiesACTS, STRATEGIES & POLICIES
Victorian Energy Efficiency Targets
Act 2007
Carbon Pollution Reduction Scheme
National Strategy on
Energy Efficiency
Renewable Energy (Electricity) Acts
Australian EnergyMarket Act 2004
Federal Energy Efficiency Opportunities
Regulation 2006
National Greenhouse and Energy
Reporting Act 2007
National Framework for Energy Efficiency
VictorianClimate Change
Green Paper
Federal
Victorian
Renewable Energy Target
Renewable Energy Act 2006
SustainabilityVictoria Act 2005
EnvironmentProtection
Act 1970
Energy Safe Victoria
Act 2005
Electricity Industry Act 2000
Electricity Safety Act 1998
State Electricity Commission
Act 1958
Energy MeterRollout
PROGRAMS & PROJECTS
Equipment Energy Efficiency (E3) Program
ClimateCommunities
Green Loans
Federal
Victorian
Energy EfficientHomes Package
Australian Carbon Trust
Gas Hot Water Rebate
Solar Hot Water Rebate
Whitegoods Appliance
Rebate
ResourceSmart
VEETScheme
NEM
Victorian electricity system
SP AusNet
AGL
EcogenEnergy
Valley Power
Pyrenees Wind
SECV Aurora Energy
Loy Yang Mgt. Co.
Snowy Hydro
Hazelwood Power
TRUenergy
IPM Australia
Pacific Hydro
Energy BrixAust.
Energy Pacific
EDL Group
Generators
Powercor
SPI Electricity
United Energy
Jemena
Citipower
Transmission
Victoria Electricity
AGL
Country Energy
Energy Australia
Momentum Energy
Origin Energy
Powerdirect
Red Energy
TRUenergy
Australian Power and Gas
Click Energy
Neighbour-hood Energy
Simply Energy
Retailers
Distribution
ELECTRICITY
INDUSTRY
Essential Services
Commission
GOVERNMENT
Australian Energy
Regulator
Energy Safe Victoria
Federal
Victorian
Energy and Water Ombudsman
Victoria
Department of Primary
Industries
Sustainability VictoriaAustralian
Energy
Market
Commission
Ministerial Council
on Energy
Local Councils
Consumer Utilities
Advocacy
Centre
Energy Retailers
Association
of Australia
Moreland Energy
Foundation
Consumer Action
Law Centre
Victorian Council of
Social Service
Financial and Consumer
Rights Council
Municipal Association
of Victoria
Central Victorian
Greenhouse
Alliance
Northern Alliance for
Greenhouse
Action
BeyondZero
Emissions
ZeroEmission
Network
Environmental Protection
AgencyDepartment of
Climate Change
AlternativeTechnology
Association
EnvironmentalDefenders
Office
COAG
ACTS, STRATEGIES & POLICIES
Victorian Energy Efficiency Targets
Act 2007
Carbon Pollution Reduction Scheme
National Strategy on
Energy Efficiency
Renewable Energy (Electricity) Acts
Australian EnergyMarket Act 2004
Federal Energy Efficiency Opportunities
Regulation 2006
National Greenhouse and Energy
Reporting Act 2007
National Framework for Energy Efficiency
VictorianClimate Change
Green Paper
Federal
Victorian
Renewable Energy Target
Renewable Energy Act 2006
SustainabilityVictoria Act 2005
EnvironmentProtection
Act 1970
Energy Safe Victoria
Act 2005
Electricity Industry Act 2000
Electricity Safety Act 1998
State Electricity Commission
Act 1958
Energy MeterRollout
PROGRAMS & PROJECTS
Equipment Energy Efficiency (E3) Program
ClimateCommunities
Green Loans
Federal
Victorian
Energy EfficientHomes Package
Australian Carbon Trust
Gas Hot Water Rebate
Solar Hot Water Rebate
Whitegoods Appliance
Rebate
ResourceSmart
ORGANISATIONS NON-ORGANISATIONS
VEETScheme
AustralianCompetition
and Consumer
Commission
FederalTreasury NEM
Australian Energy
Market
Operator
Energy Supply
Association
of Australia
Environment Victoria
Energy Networks
Association
Electrical Energy Society
of Australia
Energy UsersAssociation
of Australia
Industry
associations
Consumer rights groups Environmental
groups
SUPPORTING AND INTEREST GROUPS
Demand Management MeasuresSTRATEGY METHOD TECHNIQUE
Pricing Pricing structures Time-of-use variable pricing
Real-time pricing
Pre-paid electricity
Critical-peak pricing
Consumer incentives Rebate schemes and subsidies
Energy saving certificates
Green loans
Peak-time rebates
Smart operating
systems
Metering Real-time electricity metering
In-Home displays
Direct load control South Australia A/C load control trial
Power factor correction
Regulation Utility incentives Rate decoupling
New South Wales D-Factor
Systems benefit charges
Shareholder incentives
Demand Bidding
Loading Order
Efficiency Mandated minimum efficiency standards
Voluntary efficiency standards
Behaviour change Influences on behaviour The rational economic model of behaviour
Social-psychological factors and models
Strategies for behaviour change Persuasion
Social learning theory
Participatory problem-solving
Community based social marketing
Consumer information Appliance Labelling
Consumption information at billing
1.38%
26.12%
40.63%
18.48%
6.49%4.31%
1.48% 0.59% 0.08% 0.24% 0.20%0
1000
2000
3000
4000
5000
6000
7000
8000
$0 to $10
$10 to $20
$20 to $30
$30 to $40
$40 to $50
$50 to $75
$75 to $100
$100 to $ 150
$150 to $200
$200 to $300
$300+
Nu
mb
er
of
half
ho
urs
Spot Price Range ($/MWH)
$0 to $100%
$10 to $208%
$20 to $3023%
$30 to $4016%$40 to
$508%
$50 to $757%
$75 to $1004%
$100 to $ 1502%
$150 to $2001%
$200 to $3002%
$300+29%
Wholesale costs
Pricing mechanisms
High demand day
5
10
15
20
25
30
35
40
1:0
0 A
M
2:0
0 A
M
3:0
0 A
M
4:0
0 A
M
5:0
0 A
M
6:0
0 A
M
7:0
0 A
M
8:0
0 A
M
9:0
0 A
M
10:0
0 A
M
11:0
0 A
M
12:0
0 P
M
1:0
0 P
M
2:0
0 P
M
3:0
0 P
M
4:0
0 P
M
5:0
0 P
M
6:0
0 P
M
7:0
0 P
M
8:0
0 P
M
9:0
0 P
M
10:0
0 P
M
11:0
0 P
M
12:0
0 A
M
Reta
il e
lectr
icit
y p
rice / c
/kW
h
Critical peak pricing
Time of use tariff
Real time pricing
Postage stamp tariff
Pricing mechanisms
Average demand day
5
10
15
20
25
30
35
40
1:0
0 A
M
2:0
0 A
M
3:0
0 A
M
4:0
0 A
M
5:0
0 A
M
6:0
0 A
M
7:0
0 A
M
8:0
0 A
M
9:0
0 A
M
10:0
0 A
M
11:0
0 A
M
12:0
0 P
M
1:0
0 P
M
2:0
0 P
M
3:0
0 P
M
4:0
0 P
M
5:0
0 P
M
6:0
0 P
M
7:0
0 P
M
8:0
0 P
M
9:0
0 P
M
10:0
0 P
M
11:0
0 P
M
12:0
0 A
M
Reta
il e
lectr
icit
y p
rice / c
/kW
h
Time of use tariff
Real time pricing
Postage stamp tariff
Pricing mechanisms
Low demand day
5
10
15
20
25
30
35
40
1:0
0 A
M
2:0
0 A
M
3:0
0 A
M
4:0
0 A
M
5:0
0 A
M
6:0
0 A
M
7:0
0 A
M
8:0
0 A
M
9:0
0 A
M
10:0
0 A
M
11:0
0 A
M
12:0
0 P
M
1:0
0 P
M
2:0
0 P
M
3:0
0 P
M
4:0
0 P
M
5:0
0 P
M
6:0
0 P
M
7:0
0 P
M
8:0
0 P
M
9:0
0 P
M
10:0
0 P
M
11:0
0 P
M
12:0
0 A
M
Reta
il e
lectr
icit
y p
rice / c
/kW
h
Time of use tariff
Real time pricing
Postage stamp tariff
Smart operating systems
Smart Meters
In Home Displays
Direct Load
Control
Consumer incentives Rebates
Green Loans
Energy Saving Certificates
Efficiency standards
Voluntary Standards
Mandatory Standards
Improved market
efficiency
Utility incentives
BarrierBarrier
Cost of implementation
Lost revenue
Management motivation
TechniqueTechnique
System Benefits Charge
Revenue Decoupling
Shareholder Incentives
Economic Rational model
Price
Information
Pricing & Smart meters
Persuasion campaigns
Behaviour Change
Price & Information
Social Context
Internal Values
Subconscious Habits
Behaviour change models
Recommendations
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
RecommendationMechanismPurpose Target
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
Consumer attitudes and awareness
COMPREHENSIVE BEHAVIOUR CHANGE
STRATEGY
RecommendationMechanismPurpose Target
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
Consumer attitudes and awareness
COMPREHENSIVE BEHAVIOUR CHANGE
STRATEGY
Consumer access and knowledge
ENABLING FRAMEWORK FOR
REDUCING ELECTRICITY
DEMAND (EFFICIENCY SCHEMES)
RecommendationMechanismPurpose Target
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
Consumer attitudes and awareness
COMPREHENSIVE BEHAVIOUR CHANGE
STRATEGY
Consumer access and knowledge
BUSINESS:
Efficiency of equipment and appliances
Consumer access
ENABLING FRAMEWORK FOR
REDUCING ELECTRICITY
DEMAND (EFFICIENCY SCHEMES)
Regulation & standards
RecommendationMechanismPurpose Target
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
Consumer attitudes and awareness
COMPREHENSIVE BEHAVIOUR CHANGE
STRATEGY
Consumer access and knowledge
BUSINESS:
Efficiency of equipment and appliances
Consumer access
ENABLING FRAMEWORK FOR
REDUCING ELECTRICITY
DEMAND (EFFICIENCY SCHEMES)
Regulation & standards
ELECTRICITY INDUSTRY:
Investment in demand management
Organisational attitudes and
incentives
INCENTIVES FOR ELECTRICITY INDUSTRY TO
PURSUE DEMAND MANAGEMENT
RecommendationMechanismPurpose Target
Reducing Electricity
Use
CONSUMERS:
Responsibility and response-ability
PricingTIME-DEPENDENT
PRICING USING SMART METERS
Consumer attitudes and awareness
COMPREHENSIVE BEHAVIOUR CHANGE
STRATEGY
Consumer access and knowledge
BUSINESS:
Efficiency of equipment and appliances
Consumer access
ENABLING FRAMEWORK FOR
REDUCING ELECTRICITY
DEMAND (EFFICIENCY SCHEMES)
Regulation & standards
ELECTRICITY INDUSTRY:
Investment in demand management
Organisational attitudes and
incentives
INCENTIVES FOR ELECTRICITY INDUSTRY TO
PURSUE DEMAND MANAGEMENT
Regulatory policy
EMBED SUSTAINABILITY IN
REGULATORY FRAMEWORK
RecommendationMechanismPurpose Target
Acknowledgements
• John Langford (Uniwater)
• Janet Stanley, Anna Skarbek, Dave Griggs
(MSI, ClimateWorks)
• Graeme Hodge, Diana Bowman (Centre for
Regulatory Studies)
• CPUC, CUAC, ESC & others
• Helen Macpherson Smith Trust
