In a three-decade career at Qantas, Jim Gibney’s technical engineering skills helped modify wing flaps on 747 jetliners to cut fuel use.
Now he’s content to hand the controls of his home’s solar panels and batteries to an agent in exchange for seven years without an electricity bill.
No stranger to spreadsheets, Gibney says he researched the costs of solar and storage before paying Reposit Power $25,000 for a 14.2kW solar system and three batteries. He agreed to keep electricity use within a certain level, averaged over the year, and will keep the devices at the contract’s conclusion.
“We haven’t changed our habits one iota,” says the retired 60-year-old from his all-electric residence at Glenfield on Sydney’s southwestern edge. “The whole crux of everything [was] the simplicity of it all.”
Demand flexibility
In a world of smart meters, a blizzard of tariff and payment plans, it’s perhaps little wonder even sophisticated consumers like Gibney opt for a no-bill strategy after a sizeable upfront cost.
That such contracts exist hint at the emergence of an increasingly complex – but some say, exciting – energy system. Handled and regulated well, the harnessing of potentially millions of devices can bolster electric supply or moderate demand when the grid needs it – with or without households’ active involvement.
But industry insiders say federal and state governments have been slow to set rules and standards to make the most of so-called “demand flexibility”. By the mid 2030s, for instance, electric vehicles enabled to tap and supply power to the grid will easily have more capacity than Snowy Hydro’s $12bn (and rising) 2.0 pumped hydro plant, according to Jon Sibley, a director at consultancy, enX.
New Zealand, for instance, marshals enough demand response to cover 16% of peak load. By contrast, Australia’s main electricity market has arranged a mere 67 megawatts of load under its wholesale mechanism that can be powered down if needed. That tally was less than one week’s worth of new solar capacity added to rooftops in May alone.
Gabrielle Kuiper, an expert on distributed energy at the former Energy Security Board, estimates authorities can avoid spending $19bn on network, generation and other costs, such as transmission, by 2040 if consumer-owned resources can be managed.
“We should mandate demand-response capability in major household devices,” Kuiper says. “The future will be about optimising all these things together.”
The recent decision by three New South Wales energy firms to charge for exports of solar energy during the middle of the day was aimed partly at nudging consumers to time more of their devices so they soak up surplus power when it is most abundant.
One of them, Ausgrid, has quietly given retailers an option since September 2022 to activate electric hot water heaters during the day rather than overnight as has been the norm – with few households noticing – since as early as the late 1940s. It will become the default for those smart meters from 1 July.
Across eastern states, hot water systems total about 15 gigawatts of demand, or about five times the capacity of Australia’s biggest – and recently extended – coal-fired power station.
Surrending control
Big energy firms, such as AGL and Origin, have been testing how consumers respond to such “ripple control” being applied to other devices. Pilot households are rewarded for letting their pool pumps, underfloor heating units and EV chargers be powered up or down remotely.
Queensland’s Energex offers households with certain air conditioners as much as $400 to join its demand management program. That device, however, is one consumers appear less keen to surrender control over even though benefits in terms of avoided network investment are the largest, at least until EVs become more prevalent.
Tim Forcey, author of soon to be published My Efficient Electric Home Handbook and founder of a Facebook page with 120,000 members, says he’s “not a big fan” of outsourcing control over air conditioners.
Cooling homes with abundant midday solar energy and then lifting thermostats as the sun sets makes sense in theory but directly counters the reason people bought the devices in the first place.
“If you suddenly shut them off, they’re not going to give you what you want any more,” he says.
Forcey’s experience from offering advice to hundreds of homes suggests the majority of people “aren’t really that interested” in exploring the intricacies of electricity use. One recent client, a chief executive, “didn’t even realise his solar [system] had been shut off for 18 months” after a water leak.
Solar panel owners in Victoria barely consume a third of the output over the year, for instance. “I was amazed that all around the country we were coming up with numbers like that,” he says.
Even those replacing gas appliances with heat pumps, such as for hot water, find it hard to lift their self-consumption levels. “Hot water heat pumps are pretty damn efficient so you don’t use much electricity unless you’ve got huge hot water demand,” Forcey says.
EVs and household batteries, though, could lift households’ willingness and ability to participate in demand management.
An $8m trial by AGL and the Australian Renewable Energy Agency with 200 EV smart chargers installed across four states, for instance, sought to understand when EV owners charged their vehicles and what incentives might shift their powering-up.
The overall residential charging load turned out to be smaller and more diverse than expected, AGL says. Only about 16% of home chargers were used every day and an expected early evening peak charging load turned out to be absent.
“EV customers on time-of-use tariffs are already responding strongly to the tariff signals and moving their charging to off-peak periods,” AGL says, with 84% of trial participants planning to sign up to a smart charging service.
EV models will also increasingly offer two-way supply, with vehicle-to-home or even vehicle charging capability.
“It’s nascent but potentially enormous,” EnX’s Sibley says. “We’re talking about nearly four times the total energy storage requirements that we need in our power system being in our EV fleet. So if we can harness just a little bit of that, that’s going to be enormously valuable.”
Big batteries owned by energy companies cost about $400,000/megawatt-hour. Orchestrating EVs as distributed storage “is probably only about 6%” as costly, he says.
To get there, however, standards need to be updated. “Basically you can’t connect a vehicle to the grid because it doesn’t meet our grid codes,” Sibley says.
Dean Spaccavento, Reposit’s CEO and co-founder of Reposit, is sceptical consumers will readily embrace external tinkering.
“If you inconvenience a customer on their electricity usage, you have done the wrong thing, and you’re going out of business,” he says.
“Cars are a special beast in the minds of consumers,” Spaccavento says. Apart from transport, “it’s identity, it’s security, it’s freedom, all the things that car companies market on”.
“To erode that with ‘We’re going to support the grid and maybe get some cash out of it’ looks like air conditioners to me,” he says, referring to the fact consumers have not been so keen to surrender control to that household item. He adds that battery warranties might also be affected by vehicle-to-anything but driving.
In the end, though, the bill shock might be the decisive factor.
“I was just blown away by how much it was going up,” Gibney says. “Now I’ve got peace of mind.”
