Incentivising within-day shifting of household electricity use

Purpose of project

Australia’s boom in rooftop solar is creating value opportunities for electricity users to shift consumption to daytime, when the sun is shining. Households that can shift electricity use from the evening to the daytime will create economic value by lowering the cost of supply and decreasing carbon emissions. However, the question remains about what it will take to meaningfully shift the time of their energy consumption. One suggestion is the introduction of “”solar sponge”” tariffs – i.e. time of use tariffs to incentives a shift in timing.

The project aims to design and test monetary and non-monetary incentives to encourage households to shift their electricity use to align with solar energy output. Specifically, it will analyse the impact of the different incentives on household load shifting, household energy costs, energy procurement costs, and net program costs. This will be analysed in three dimensions: first, incentives to move consumption into daylight hours vs incentives to move away from non-daylight hours. Second, financial subsidies and rebates per kWh shifted vs a non-monetary incentive scheme where household earn status points per kWh shifted. Third, incentives that target routine actions vs ad hoc actions.

Impact of project

With policy support and a transformation of the retail offering available to customers, it is possible that 15% of households in Australia will become load shifters by 2035. Compared with current load profiles, this would mean that 400-650GWh would be shifted annually across the NEM. This would produce annual savings between $40 and $65 million. This would result in considerable value for energy customers who would receive substantially more energy use per dollar spent.

Additionally, there would also be significant environmental benefit. It has been estimated that by 2030, 6,000GWh will be curtailed annually across the NEM by 2030. If load shifting were completely realised by reduced curtailment, CO2 emissions could be reduced between 320,000 and 530,000 tonnes per year across the NEM.

Project partners – industry and research

DEWLP (VIC), PowerPal Pty Ltd, Monash University

Status

In Progress

Project Leaders

  • Gordon Leslie

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