• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Where did all the electricity demand go??

Discussion in 'General Chat' started by sydboy007, Jan 10, 2013.

  1. sydboy007

    sydboy007

    Posts:
    3,632
    Likes Received:
    2
    Joined:
    Dec 10, 2012
    Electricity consumption in the National Electricity Market (NEM) states has decreased for the fourth consecutive year. In 2012, electricity demand in the NEM decreased 2.5 per cent (4,818 GWh), when compared to 2011 consumption, which represents the largest annual reduction since this trend began.

    Reduced electricity consumption in the NEM is not a recent phenomenon; electricity demand has fallen every year since 2008. Electricity demand in 2012 was 196,000 GWh, 11,400 GWh lower than the peak reached in 2008. At retail prices of around 25c / kWh it's a reduction of $2.85B being spent on electricity.

    Could it be solar PV and roofing insulation, along with other efficiency improvements, are finally starting to pay off?

    Standout performer New South Wales, where demand fell by 4,000 GWh.
     
  2. Gringotts Bank

    Gringotts Bank

    Posts:
    6,175
    Likes Received:
    606
    Joined:
    Jun 30, 2007
    Just the gd expense of it I reckon. People turn off the heater/ac/lights rather than waste power.
     
  3. orr

    orr

    Posts:
    826
    Likes Received:
    171
    Joined:
    May 15, 2008
    This is a great line of inquiry. And makes all the participants in the fossil fuelled electricity fraternity very wobbly. When you look at the 2020 20% renewable energy target that was put together using projections that have now proven to be fundamentally floored. The planned renewable infrastructure now looking like suppling 27% (odd percent ) that was designed on those floored projections. The shrill warnings of the gross incapacity of renewable energy to cover the nations energy needs into the future seem a little over cooked.
    And on a pricing note, I lived in London in the mid nineties where you bought electricity up front from the post office and took your receipt number home and put it into your meter to be credited @ a price of .12p/ kwh at an exchange rate at the time of .33p to the Au dollar. Thats .36c/kwh in 1996 dollars for domestic retail usage. At that time.
     
  4. sydboy007

    sydboy007

    Posts:
    3,632
    Likes Received:
    2
    Joined:
    Dec 10, 2012
    Australians generally have pretty cheap energy still. Pop over to Europe, Singapore, Japan and see what they pay for petrol.

    For all the vitriol that LNP supports heap on "Pink batts" (mine are a very conservative friendly beige :D) i do wonder how much energy they have been saving households. I can honestly say I've seen around a 2 kWh / day reduction in my annual consumption, and I don't have aircon at home. I can only imagine the energy savings for those with aircon would be much higher.

    With increased efficiency and an effort into renewables why can't we aspire to much higher renewable energy targets. SA already hits 26% with wind energy, and while I know the Waurbra foundation akins wind turbines with the apocalypse, I've yet to hear of a pandemic of illnesses in the state.
     
  5. DocK

    DocK

    Posts:
    845
    Likes Received:
    10
    Joined:
    Jan 29, 2009
    Maybe the demand is less due to the decreased productivity? Many businesses have closed or have reduced hours.
    Production being relocated overseas? I look around the industrial area our business operates from and I'm certain that electricity demand for 2012 would have been far less than that for 2011 - quite a number of the businesses that were in full operation have closed or drastically cut production levels.

    A breakdown of commercial demand vs domestic demand would be interesting.
     
  6. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    What do yoy mean dock :D
    We have only lost 100,000 jobs in manufacturing since 2008.

    http://nett.com.au/news/more-than-100000-manufacturing-jobs-lost-since-gfc-100319/
     
  7. medicowallet

    medicowallet

    Posts:
    1,202
    Likes Received:
    0
    Joined:
    May 8, 2010
    +1 dock

    Decreasing economic growth helps make the figures look cuter than they are.
     
  8. sydboy007

    sydboy007

    Posts:
    3,632
    Likes Received:
    2
    Joined:
    Dec 10, 2012
    How do u equate decreasing economic growth with higher GDP growth?

    Isn't higher GDP with less energy consumption a good thing?

    Not sure if there's been any reduction in aluminium smelting over the last couple of years. I know tomago was due to close, or has closed recently.

    From memory Aluminium smelting consumed around 15% of electricity produced in Australia. Most of it was provided and below market cost.

    Gotta love Govts and their "value" adding.
     
  9. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    Also Dock, did you read in the article they expect a further loss of 85,000 jobs in the next 5 years.
    So we will probably see a further reduction in manufacturing electricity demand.
    So it is probably a win all round, reduced carbon emmissions and a freeing up of workers for the mining sector.
    Add to this all the able bodied workers, the Labor party are currently processing in detention. It won't be long before we may be able to scrap the 457 visa system.:xyxthumbs

    Only down side, there may be a glut of taxi drivers.
     
  10. sydboy007

    sydboy007

    Posts:
    3,632
    Likes Received:
    2
    Joined:
    Dec 10, 2012
    Maybe the jobs at mesoblast, sirtext, phosphagen, reva medical, sai global, star pharma can help.

    Unless you're looking at the manufacturing of high value physical products (usually due to the IP embedded in them) Australia is going to have to accept that we don't have the domestic market to help foster the production here. The late 80s culled the companeis that could only survive behind the tariff walls. probably 2013 is when the productivity everyone keeps blaring on about takes off because there'll be less workers doing more work.

    With Govt neglect we have world leading biomedical companies. With neglect we have high end design firms that off shore most of the production, keeping the true value adding to be done in Australia.

    Now if only some political party could give up yellow vest photo ops and do what's needed to foster these companies, we might have a chance of keeping them here.

    Can't remember the name of the company that had some form of water treatment process, but none of the water companies in Australia would use it. They eventually moved to Germany because the Germans were willing to fund them. They are the ones who will reap the billions in returns of the new technology.
     
  11. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    Talking about the tarrif reductions of the 80's has nothing to do with 100,000 jobs lost 20years later and a further 85,000 expected in the next 5 years.
    Look no matter how you look at it, the economy has been a disaster over the last 5 years. Just look at the all ords to see how much confidence there has been in the economy, just look at your superannuation performance to see how it affects you.
    Getting back on track electricity demand won't pick up untill the major manufacturing climate improves.
    If it doesn't improve, well there will be more job losses in the sector and it will result in a resource driven economy. This in turn will drive our general living standards toward the regions we are competing with i.e South America and Africa.
    Sad but true. If you believe I.T will save our ar$e, your dreaming.
     
  12. Julia

    Julia In Memoriam

    Posts:
    16,986
    Likes Received:
    1,937
    Joined:
    May 10, 2005
    Of course, sydboy, don't for a moment consider that electricity has become so expensive that many low income households are simply having to do without it. Consumers being cut off because of not being able to pay their bills are increasing all the time.

    All very fine for you to rant on with your left ideology. Real people are genuinely suffering.
     
  13. Smurf1976

    Smurf1976

    Posts:
    10,891
    Likes Received:
    5,776
    Joined:
    Feb 14, 2005
    I'll comment.... :D

    First thing to realise is that the Australian Energy Market Operator (AEMO) is only counting centrally dispatched electricity generation. That is, that which comes from what most people think of when power generation is mentioned - actual power stations.

    What they aren't counting is on-site generation at places like sewage works, paper mills, oil refineries and the like unless such places are producing a lot more electricity than they use themselves, thus leading them to be counted as a power station. At the larger end of this one are places such as oil and gas processing plants or metal smelters. They use waste products, either heat or from flammable materials that are burnt to produce heat, to generate some of their electricity. At the smaller end are things like household solar power - nobody's house is counted as a power station, and AEMO doesn't record this form of electricity generation directly.

    So what's changed?

    1. There is more production of electricity at places other than large power stations. Production is increasing in industry, even places like universities now sometimes have their own small power plant on site. And of course there's household solar installations as well.

    2. Significant industrial production has been relocated offshore, with one relatively large one a direct outcome of rising electricity prices. Closure of the Hydro Aluminium (a company unrelated to either Snowy Hydro or Hydro Tasmania) smelter at Kurri Kurri (NSW) is the reason consumption in NSW dropped so much. This production now occurs offshore (using Australian raw materials) instead.

    3. Increasing use of electricity substitutes. Sales of gas appliances, particularly water heaters, have boomed in recent years and it's to the point that some states offer grants to install them. Likewise it's no secret that there is renewed interest in firewood for heating houses and in solar for heating hot water. These technologies all displace electricity consumption to some extent. This is driven largely by the recent steep increases in electricity prices (especially in the case of firewood) and to a lesser extent by government regulation.

    4. Energy efficiency. These days, practically all replacement appliances use less energy than their predecessors, largely as an outcome of technological development. Likewise there is a trend for consumers to replace appliances (particularly room heaters replaced with reverse cycle A/C or hot water heaters replaced with heat pumps) for the sole or primary reason of reducing electricity consumption as a response to rising prices.

    5. There is a lot of evidence that many consumers are "priced out" of the market. That is, they do without (mostly) heating and in some cases hot water or lighting because they simply can't afford it. A disproportionate share of those in this category are elderly and unable to afford heating the house all day when at home.

    6. Electricity is a "hard" economic statistic not easily masked. Practically all economic activity involves electricity either directly or indirectly. Historically, previous falls in electricity consumption were associate with recession and it is reasonable to assume that electricity demand would fall in any future or current recession.
     
  14. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    Funny you should mention firewood Smurph.
    My mum lives in a country town and wanted to get rid of her wood fire to replace it with reverse cycle.
    No matter how I explained it to her she wouldn't have it.
    Now she is asking how do I replace the reverse cycle and get back my wood fire.lol
    It is hard work pushing $hit uphill.lol
    The more you clear away, the more they shovel down on you.:D
     
  15. So_Cynical

    So_Cynical The Contrarian Averager

    Posts:
    7,019
    Likes Received:
    674
    Joined:
    Aug 31, 2007
    What a crock..

    Disaster huh, so what do you call the US and Euro economy's? seriously how can you realistically call our economy a disaster and maintain any credibility? sure complain away in political terms and ill ignore you as per usual, but to say something that is so deluded and so baseless in fact.

    You really remind me of Christine Milne on the news last night, talking about the WHC thing...deluded.
     
  16. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    O.k put up a graph the all ords against the Dow Jones over the last 5 years. What the

    Go On Post it right here.lol
    Lets not let crap and bullying get in the way of facts.LOL
    In relative terms theirs is up 10% ours is down 20%.
    They are the ones, who you are saying are struggling, we apparently are flying, what a joke. Pull your head out.

    I love how you people who throw around comments like "what a crock"
    I've got another one on the go that is saying I'm going to be burden on his tax.LOL
    All you have in common is an innate ability to throw crap without any subjective experience to substantiate your claims
     
  17. sptrawler

    sptrawler

    Posts:
    14,723
    Likes Received:
    5,606
    Joined:
    Jul 3, 2009
    I posted that 3 minutes after you .
    Could you respond by throwing up a graph that will justify your comment?
    Over 4000 posts, christ knows how you get away with it.:D
     
  18. sydboy007

    sydboy007

    Posts:
    3,632
    Likes Received:
    2
    Joined:
    Dec 10, 2012
    What does the level of the ASX prove? Are you forgetting US currency debasement and QE to infiniteeeeeee? Jpana haas taken tot he same with great gusto, and the Europeans are not too far behind either. Trillions of dollars in practically interest free money looking for an asset that offers the chance of an above inflation rate of return. Hard to find with most Govt bonds these days - Australia being a rare exception.

    Unless you're arguing that markets are 100% rational then why do shares jump around by as much as they do every day? Surely profit forecasts can't be changing by that much on a daily, and even on an intra day basis shares bounced around more than can explained in purely rational terms.

    There's a whole heap of research out there that shows economic growth and stock market performance eg jay Ritter 2004

    It is widely believed that economic growth is good for stockholders. However, the cross-country correlation of real stock returns and per capita GDP growth over 1900-2002 is negative. Economic growth occurs from high personal savings rates and increased labor force participation, and from technological change. If increases in capital and labor inputs go into new corporations, these do not boost the present value of dividends on existing corporations. Technological change does not increase profits unless firms have lasting monopolies, a condition that rarely occurs. Countries with high growth potential do not offer good equity investment opportunities unless valuations are low.

    Current energy use is back down close to 2006 levels, and still on a downward trend, yet we're being told we still need billions in regulated network upgrades. I don't know about you, but I'd happily invest for a ~7% guaranteed return. Where does the retail investor sign up?

    All the angst over a 9% carbon tax increase, when the main reason is being relatively ignored.
     
  19. basilio

    basilio

    Posts:
    9,095
    Likes Received:
    2,201
    Joined:
    Jun 30, 2008
    Smurf that was an excellent summary of how electricity production is changing. Certainly puts a context around the topic of this thread. Thank you.

    I was puzzled however by your final statement which seemed to go against all your previous points. You were saying that falling electricty use has traditionally been associated with a recession and would continue to do so. I think you demonstrated that we might see continuing falls in nominal electricity production (from the big producers) while still having a an economy buoyed by energy efficiency, substitution and local electricity production.

    __________________________________________________________

    Sydboy hits the nail on the head. The demand of energy retailers for expansion in grid resources is a self serving lie - which are colle3ctively paying. And don't even mention the Smart Meter rip offs!
     
  20. Smurf1976

    Smurf1976

    Posts:
    10,891
    Likes Received:
    5,776
    Joined:
    Feb 14, 2005
    I could probably have expressed it a bit better. I'm just noting that during previous recessions there has been a marked stagnation, and at times small falls, in electricity consumption in much of the country. It is thus reasonable to assume that if we were now having a recession (some say we are, some say we aren't - that's a different debate however) then it would be logical to expect falling electricity consumption.

    Agreed although peak demands are an issue in some locations even with falling overall demand.

    For example, South Australia is one of the peakiest electricity systems in the world, versus Qld and Tas which are the opposite. In recent years, largely as a consequence of the various "reforms" there has been as loss of focus on maintaining a high load factor (average load as a % of peak). This results largely from the separation of generation from retail and associated marketing stategies, and results in higher costs per unit of actual production for consumers as a whole.

    A lot of network investment comes about simply to collect the regulated return on it. Also worth mentioning is that the industry's focus these days is on the network whereas historically it was on generation. Hence big transmission and distribution projects happen now in much the same manner as big power stations were built previously. Trouble is, we still have to generate the power - much of the increased spending on transmission and distribution is of dubious value depending on the actual circumstances.

    A classic example of the "network mentality" can be seen in the fire affected parts of Tasmania right now. Earlier today two RAAF planes each landed with a large generating unit on board. These have been borrowed from Queensland and taken to the Tasman Peninsula to power what remains of the grid down there.

    Now, the sad part is that it was always known that the lines to this area were highly vulnerable to damage from various sources (in practice mostly storms). This was identified as needing a solution back in the old days of the vertically integrated HEC.

    Then along came separation of the industry into generation (Hydro Tas), Transmission (Transend Networks) and distribution (Aurora Energy) as has occurred elsewhere.

    Now, when a company that does power lines is presented with a problem it should come as no surprise that building another power line ends up as the preferred solution. And so they canned the idea of permanently locating a small (diesel) power plant down there, and instead built a duplicate line along the only practical alignment - just a few metres from the old one. Suffice to say that both lines were burnt in the fires, and they are now setting up the diesel generators.

    An integrated "do everything" company could easily see that locating a small generating plant (operated remotely via radio communications) was the most robust solution. And it made sense financially once the value of actually generating power is considered (that is, the plant could be run at times of peak demand as an extra generation source in addition to using it in the event the lines are damaged in storms etc). But network companies aren't generation companies and so that was the end of that idea. Suffice to say this isn't the only such example in Australia - there are plenty.

    I can assure you that deregulation, disaggregation and "competition" hasn't lead to lower bills. Anyone who thinks otherwise is living in economists' fairy land where it may have worked in theory. In the real world however, the technical inefficiencies introduced by splitting things up far outweigh any productivity etc gains in the marketing department which may come about (that being the only place they could in practice really happen).
     
Loading...

Share This Page