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Giving more consumers the flexibility to use Australia's abundant solar energy for hot water during the day would lower their electricity bills and take pressure off the power grid, according to new analysis by the Institute of Energy Economic and Financial Analysis (IEEFA).
Solar panels on private roofs now produce more electricity than any single coal-fired power plant in Australia. This has pushed wholesale electricity prices into negative territory during the day, while demand remains highest during the evening peak period between 4pm and 8pm.
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According to IEEFA, hot water systems that cover a quarter of a household's electricity consumption offer the best and cheapest solution to this imbalance by shifting the need for hot water to the middle of the day.
“The introduction of flexible demand can reduce household energy costs and bring benefits to the electricity system as a whole,” says Dr. Gabrielle Kuiper, IEEFA guest author and author of the briefing.
The concept of flexible demand is not new. Since the 1950s, it has been used in electricity distribution networks via so-called ripple control, whereby “surplus” coal-fired electricity is used to heat water in households at night during off-peak times.
Household hot water needs can be adapted to times when renewable energy is abundant in two ways:
• Passive management – through timers on devices or through ripple control times set by distribution networks for systems with controlled load circuits and tariffs; or
• Dynamic management – through adjustable ripple control or Wi-Fi control that can be set by the owner or a third party and can be adjusted in response to changing conditions.
Dynamic management offers maximum flexibility using apps, touchscreens or web portals – all functions that are immediately available in intelligent hot water systems.
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“You can treat a home’s hot water system like a heat battery and store the heat in the hot water until it is needed,” says Dr. Kuiper.
As more Australian homes become electrified, it is an ideal time to introduce standards and incentives to encourage and support the use of smarter, more efficient hot water systems.
An analysis by IEEFA has found that the average household in Victoria, where gas heating is widespread, could save $1,200 a year in energy costs by replacing gas appliances at the end of their life with efficient electric alternatives. Flexible water heating also offers further savings.
“Flexible hot water supply not only reduces costs for owners, but also for the entire system if it is dynamically controlled to absorb renewable energy when it is in abundance and grid capacity is available. In this way, flexible hot water supply can reduce bills for all users of the electricity system,” says Dr Kuiper.
Subsidies for hot water systems offered across Australia lack consistency and coherence, says Dr Kuiper, who is calling for a national strategy for domestic hot water.
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“The lack of government subsidies for hot water system management requirements is a missed opportunity to create low-cost, flexible demand that grows with each subsidised hot water system installed,” says Dr Kuiper.
“With the rapid electrification of households, it is important that hot water flexibility and energy efficiency requirements are implemented as quickly as possible. By making these measures a priority, we can future-proof Australian households by synchronising their electricity needs with a growing variable supply of renewable energy.”
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