An app that could cut household’s power bills, or even allow them to turn a profit, by trading household electricity usage on the energy market could be available in Australia within months.
The Federal Government’s Renewable Energy Agency (ARENA) has been inundated with proposals from tech companies vying for $37 million dollars in start-up funding.
“It’s a sleeping giant in terms of potential for the Australian energy market,” ARENA’s Philip Cohn told Lateline.
More than 90 companies have already expressed interest, with applications due to close on Monday.
“We conducted a request for information for potential bidders in the program and they told us by the first of December this year they could [provide] up to 700 megawatts … and by the following summer that amount grew to about 2,000 megawatts of potential capacity,” he said.
To put that in perspective, the recently closed Hazelwood Power Station could generate 1,700 megawatts at full capacity.
‘Negawatts’ — not megawatts
It is a concept called “negawatts”, or demand side management.
“Negawatts are simply energy not wasted,” Dan Cass from the Australia Institute said.
“Rather than generating watts needed, you save wasted energy and put it into the energy system as a resource.”
Cash for power savings
Tech companies such as Melbourne’s Greensync are already offering large energy users substantial discounts or cash payments for shutting down or reducing their electricity usage at peak times, when wholesale power prices are at their highest.
Consumers could adjust to their power usage in exchange for a discount. (Flickr: comedy_nose)
“An example might be a water utility that is able to respond to these peak-load events during a heatwave,” Greensync chief executive Phil Blythe said.
“[They] reschedule the pumping load such that they’re able to avoid those peak times and this puts less pressure on the grid infrastructure and ultimately save the water utility quite a lot of money.”
The energy saved is traded back into the National Energy Market for a profit.
Within a year, Mr Blythe expects the capacity of his company to eclipse that of Tesla’s “world’s biggest battery” announced for South Australia.
“We’ve got a plan to roll out 200 to 300 megawatts — that’s two to three times the battery storage system that’s being put into South Australia over next six to 12 months,” he said.
Bringing governments together
In the normally divisive energy policy space, the technology is bringing state and federal governments together.
“We see this technology … as being a win-win for consumers, for retailers, and for the system as a whole,” Energy Minister Josh Frydenberg said.
Labor’s energy spokesman Mark Butler said he also recognised the potential and importance of demand management.
“It empowers consumers, improves security, cuts electricity costs for users and plays a crucial part in cutting pollution,” he said.
The next step for the sector is rolling out the technology for smaller energy users by grouping together hundreds or thousands of households into one “block” of energy.
How would it work at home?
According to the Australia Institute, consumers could be sent a message on their phones at peak times, asking if they would like a discount on their next power bill in exchange for an adjustment to their power usage.
By selecting “yes” their home appliances, such as air-conditioners or pool-pumps, could be switched off or turned down automatically, with the savings appearing in the next power bill.
When combined with household batteries and solar panels, Mr Cass said the rewards for households would be even greater.
“Consumers will find over time they will start making money — almost being day traders in the energy market through the use of apps and clever computer technology,” he said.
Importantly, it would also reduce pressure on the grid at peak times and lower carbon emissions without the need for expensive investment in new infrastructure.
“Australia can save billions of dollars and lower emissions and increase grid reliability — almost for free,” Mr Cass said.