Buildings cutting peak demand by $12,000pa

As much of Australia sweats through its hottest summer ever, peak electricity demand is in the news. Blackouts have been recorded due to network capacity constraints, aluminium smelters have been ordered to close, and anyone fortunate enough to have air conditioning at home has been asked to turn the setpoint up to 26C and “switch off unnecessary lights”.

The Australian Energy Market Operator, AEMO, has reported unprecedented electricity demand in NSW and this has been met with calls for more investment in generation and network capacity.

All this invites the question: Is peak electricity demand growth inevitable?

As can be seen from the chart, below, demand for electricity in NSW has been much higher this summer compared to 2015-16 and demand has been more “peaky”, with 12 days experiencing demand over 12,000 MW compared to just three the previous year. So far this year, average demand in NSW has been roughly 10% higher than it was at the beginning of 2016.

Much of this increase can be put down to soaring temperatures. In the Sydney CBD, where we have been working with 36 large commercial office buildings to help them understand and manage their peak demand, daily maximum temperatures this summer have climbed higher than the previous two summers by more than 2°C. As anyone who has attempted to sleep in Sydney this summer will attest: it has been a similar story overnight.

Ordinarily, such conditions would cause electricity demand to rise by roughly 8-10%*, as the AEMO data suggests. But is demand growth inevitable? Or, put another way, with sensible preparation and reliable forewarning of peak conditions, can over-investment in infrastructure and the dangers of blackouts be avoided?

What can Buildings Alive’s experience contribute to the discussion?

For the past three summers we have been fine-tuning our ability to predict electricity demand peaks from large complex commercial buildings across the country.

We first beta-tested our technology during the summer of 2014/15 and then ran fully developed versions last year (2015/16) and again this summer (2016/17). It’s not perfect (the weather, after all, has been unprecedented…), but we’re usually able to pinpoint and forewarn of demand peaks at individual buildings with 15-minute precision up to three days in advance. This, coupled with rigorous planning and preparation for when the warnings come through, gives our clients the tools they need to implement highly effective demand management measures.

And their actions certainly have been effective.

Despite the challenging conditions, 18 of the 36 Sydney office towers we’ve been helping to manage demand have achieved lower peaks than they recorded last year. The average increase was 0%. This is good for the environment and good for network stability. It is also good for the bottom line – combined, the buildings’ facilities managers have shaved 3,000kVA (~3MW) off the network peaks and will save their owners an average $12,000 per building in capacity charges over the coming year compared to what they would have paid if they had done nothing special.

Experts claim demand management is a powerful but long-neglected solution to the challenges facing energy market operators and regulators. Hopefully this is about to change with the Australian Energy Regulator (AER) set to implement a Demand Management Incentive Scheme in 2019 which, it is hoped, will help consumers to save energy and shift their demand so utilities won’t have to waste money building capacity that’s not needed 99.9% of the time. Given the managers of these 36 buildings have achieved what they have with no assistance from the utilities and regulators, with a bit of help who knows what might be possible?

(* We have found that for every 1 degree increase in indoor-outdoor temperature differentials during summer, HVAC load increases by approximately 6%. This corresponds to roughly 3-4% higher base-building demand from office buildings for every degree increase in ambient temperature.)