The freedom revolution to kill power bill confusion

By Stephen Bygrave. From Climate Spectator, July 22 2014.

With the amount of rhetoric flying around regarding electricity bills and energy in recent years, you’d be hard pressed to find any points of clarity amongst the noise. For the average punter with little knowledge about energy and politics, the public discussion is bewildering, however much their electricity bill may concern them.

Let's take a selection of assertions that have been made in the “expert” and partisan commentary on the energy market to illustrate some of these points:

  • Everyone acknowledges that we need to use more clean energy, but the Renewable Energy Target is too high.
  • The carbon price is destroying the economy and raising your electricity bill, but repealing it may not lower bills.
  • Power bills went up because your neighbours installed solar, but if you install solar, your power bill will go down.
  • Solar isn't reliable because the sun doesn't shine at night, yet the energy grid can't accommodate all the solar power being generated.
  • Clean coal is ready to roll but nowhere to be seen. Wind turbines, which are now quite visible in a number of locations, are sadly unreliable.
  • Wind turbines may make you sick, yet fires in coalmines are nothing to worry too much over.
  • Gas is low emissions, clean and cheap yet gas bills have started to rise sharply.
  • Fracking is needed for energy security, yet state governments have enacted moratoriums against it.

However, it's the simple truths that manage to cut through all the noise.

One simple truth is that renewable energy has led to lower wholesale electricity prices. This occurs due to a well-researched (but little reported) dynamic in energy markets known as the Merit Order Effect (see this video that explains it clearly). Perhaps the reason it hasn't caught on is because there's little or no evidence that lower wholesale prices have been passed on to consumers in the form of lower energy bills. Certainly, there has been little reporting of the effect.

We have on the other hand seen many (misleading) appeals to a supposed public good, blaming solar homeowners for everyone else's rising electricity prices.

All this hasn't stemmed the flood of homes embracing solar. There's well over a million households in Australia now generating their own solar electricity.

Now, as gas bills begin a sharp climb that could emulate the previous rise in electricity bills, those solar panels on your neighbours' house will look even more enticing.

Rising gas prices will only increase the shift to solar. The improved quality and performance of many of the electric appliances that can reduce energy use is yet another driver, and you can see the evidence in annually falling household energy demand.

What if this trickle of change were to become a flood? Energy freedom is an idea that will open those floodgates. The concept is based on the research presented in the Zero Carbon Australia Buildings Plan, published by Beyond Zero Emissions and the University of Melbourne’s Energy Institute late last year.

That report found that on average, Australian homes could cut their energy use in half and generate more electricity than they use over a year, through a combination of energy efficiency measures and rooftop solar. Energy Freedom comes in nine easy steps – insulation, double glazing, LED lighting, heat-pump hot water systems, energy efficient appliances, reverse cycle air conditioners, in-home displays, induction cookstoves and rooftop solar. 

This comprehensive suite of measures which are designed to complement each other is what's needed to “upgrade” the current drift toward energy efficiency – and make it a hard-hitting social movement delivering tangible benefits.

It would be ideal if government and the energy industry both supported this popular movement. After all, it means lower energy costs for households, dramatic reductions in greenhouse gas emissions and support for small manufacturing businesses in Australia. Assistance packages could help homes to replace inefficient old electric and gas heaters and hot water, for example, much sooner than would otherwise occur (especially in the poorest households).

Putting on solar panels is a great first step, and the first step of many. If you can get 8c per kilowatt-hour selling your solar electricity to the grid, or save 20-30c per kilowatt-hour by avoiding buying electricity back, it's a no-brainer. You put your electric hot water service (heat-pump, or electric boosted solar) onto a timer switch and run it during the hours your solar panels are generating. You insulate and double glaze your house so you can set your air-conditioner to run while your solar panels are generating, and bank that heat (or cool) for later when you get home from work. You run washing machines during the day. You replace power-guzzling halogen light globes and plasma screen TVs with LED equivalents and cut all that night-time energy use right back.

As this “whole package” approach catches on, where each element supports the others, this energy revolution will continue to grow. It is all happening already, albeit slowly. But that's before gas price rises really hit home, and before battery storage becomes widespread. Battery storage has been hyped as the “silver bullet” to shift the old, centralised energy grid model – but the revolution has not waited for it.

Government schemes have supported limited measures in these areas for many years, and perhaps surprised many cynics in that they have had some impact and helped get this moving. Yet currently, governments appear to be largely backing the old guard in the energy industry. How long can they hold back the flood?

It's pretty hard for governments to ban safe, efficient new technology, and it would be dynamite to start penalising homes for generating solar energy. Rising connection fees and fixed charges for all are one likely reaction, less blatant than (for example) charging more for solar connections. The model we’d all prefer is government and industry supporting this transition to clean, cheap energy for all.

We're calling it an energy revolution because it is action from the ground up, action that we can all be part of, to put power back into our own hands. It’s a revolution that the power companies can be part of, if they are forward thinking and strategic.

We're calling this revolution Energy Freedom. Autonomy, independence, empowerment, choice. Energy created by you for you. Freedom is here, and it's good news for society and for the environment.

Beyond Zero Emissions is launching Energy Freedom (www.energyfreedom.com.au), an alliance of forward thinking businesses and the community to help grow the movement to energy efficient homes and rooftop solar power.  

This is real direct action in your home. Action that allows you to divest your home from fossil fuels. Action that everyone can take.

Dr Stephen Bygrave is CEO of climate think tank Beyond Zero Emissions and Adjunct Professor at University of New South Wales