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Power consumption: changing times in Australia

Power Consumption in AustraliaThe power consumption situation in Australia is confusing and complex. As the population becomes increasingly aware of the cost and environmental impact of their energy usage, they are finding that understanding the available information and data is difficult, with conflicting information in some areas and a complete lack of data in others. This makes it very difficult for the average Australian to understand their own power consumption and the impact of power consumption across states and territories and ultimately Australia as a whole.

Power consumption: the big picture

In the period spanning 2009 – 2010, the main fuels in Australia’s power consumption picture were natural gas (24%), electricity (22%), diesel (18%) petrol (16%), and solar (1%), and the overall power consumption around the country went up about 1%. Industry accounts for about 74% of the total power consumption in Australia, with the remaining 26% consumed by households. Coal is overwhelmingly used to generate electricity, which makes up the bulk of household power consumption.

For many years, the cost of electricity to consumers (retail electricity) was among the lowest in the world. However, in recent years the costs of electricity have risen by a staggering 72%, and Australia now has some of the most expensive retail electricity prices in the world, ahead of only Greece and Denmark. The low price of electricity before this period resulted in little investment in new facilities or technologies, meaning that the industry now faces the challenge of modernising at a time when demand is beginning to show signs of slowing down and costs are at an all-time high.

Power consumption: demand

Although overall demand for electricity has increased by about 14% since 2001 in Australia, there have been recent declines: In 2008 – 2009, usage declined 5.4% Australia-wide, and in 2009 – 2010 usage declined again by 1.2%. These declines are small, but this is the first time any measurable decline has been noted. The electricity generators have always banked their profitability and the maintenance and development of equipment on the market being in perpetual growth. The assumption has always been that Australians will continue to find new ways to use electricity, but these recent declines indicate that this period of perpetual growth may be over.

Reasons for the decline are unclear, as data is collected by a large number of independent sources who do not communicate with each other. Some possible explanations are:

Efficient appliances and construction. New construction codes and more efficient appliances such as refrigerators or televisions are designed to use less electricity out of the box. As these new designs and technologies proliferate, power consumption automatically goes down.

The Internet. Online shopping has seen a reduction in retail space as more people purchase goods from websites.

New Legislation. Laws which require efficient water heating systems, low-flow shower heads in new construction, and other requirements have slowly brought up the power consumption standards in Australia, reducing electricity usage.

Higher Prices. The simplest explanation, of course, is that the huge increase in the cost of electricity has forced many households to rethink their power consumption habits. A variety of energy saving devices have also become more widely available, for example the EcoSwitch provides a simple solution to the problem of standby power leakage.

Power consumption and environmental impact

Most of Australia’s electricity is generated from Black Coal. Black Coal accounts for about 54% of electricity generation, with the balance being made by Brown Coal, Natural Gas, and Hydroelectric. The coal Australia burns for electricity generation is relatively ‘clean’ by international standards, but electricity generation still accounts for about 37% of the greenhouse gas production in Australia.

Recent legislation setting a foundation for carbon pricing aimed at reducing the production of greenhouse gases promises to put increased pressure on the energy sector in general and electricity generation specifically. With demand falling, albeit slightly, environmental concerns at an all-time high, and the government moving to force more efficient and cleaner forms of energy production, costs are likely to rise even further. This may have the unintended consequence of driving down demand further. For example, since 2011, Australians have installed over 650 megawatts of solar panels on their homes. While this remains just 1% of the power consumption story, this is a clear sign that the times are changing in regards to Australia’s energy market.