If more consumers had the flexibility to use Australia’s abundant daytime solar energy for their hot water, it would reduce power bills and take pressure off the grid, according to new analysis from the Institute of Energy Economic and Financial Analysis (IEEFA).
Household rooftop solar systems now produce more electricity than any single coal-fired power station in Australia. This has driven daytime wholesale power prices into negative territory, while demand remains highest during the evening peak period, from 4pm-8pm.
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Hot water systems, which account for a quarter of household power load, offer the biggest and cheapest solution to this mismatch by shifting water heating demand to the middle of the day, IEEFA says.
“Introducing flexible demand can reduce household energy bills and deliver benefits to the power system overall,” says Dr Gabrielle Kuiper, IEEFA guest contributor and author of the briefing note.
The flexible demand concept is not new. Since the 1950s, electricity distribution networks have employed it via “ripple control”, by using “excess” coal-fired power for household water heating during the overnight off-peak period.
Shifting household hot water demand to align with periods of abundant renewable energy can be achieved in two ways:
• Passive management—through timers on devices or ripple control times set by distribution networks for systems on controlled load circuits and tariffs; or
• Dynamic management—by adjustable ripple control or WiFi controls, set by the owner or a third party, which can be adjusted in response to changing conditions.
Dynamic management offers the greatest flexibility, using apps, touch screens or web portals, all features readily available in smart hot water systems.
“It is possible to treat a home hot water system like a thermal battery, storing heat in hot water until it is needed,” Dr Kuiper says.
As more Australian households electrify, it is the ideal time to introduce standards and incentives to encourage and support the use of smart, more efficient hot water systems.
IEEFA analysis has shown that if gas appliances were replaced with efficient electric alternatives at their end of life, the average household in Victoria, where gas heating is widespread, could save $1,200 a year on its energy bills. Flexible hot water offers further savings.
“Flexible hot water not only reduces costs for its owners, but for the system as a whole if it is dynamically managed to soak up renewable energy when it is abundant and when network capacity is available. In these ways flexible hot water can lower bills for all electricity system users,” Dr Kuiper says.
Hot water system subsidies on offer across Australia lack cohesion or consistency, according to Dr Kuiper, who is calling for a national strategy around domestic hot water.
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“The lack of hot water system management requirements in state subsidies is a missed opportunity to create cheap, flexible demand that grows with every subsidised hot water system installed,” Dr Kuiper says.
“It is important for flexibility and energy performance requirements on hot water be in place as soon as possible given how fast households are electrifying. Making these measures a priority will future-proof Australian homes by synchronising their electricity needs with a growing variable renewable energy supply.”
