A National Demand Management Strategy for Small Airconditioners

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Summary

This report was commissioned by the National Appliance and Equipment Energy Efficiency Committee (NAEEEC) and the Australian Greenhouse Office and was prepared by George Wilkenfeld and Associates Pty Ltd. This report was finalised in November 2004 and released in December 2004.

Air conditioner peak demand is one of the major factors driving capital investment in the National Electricity Market, as well as a mechanism for cross-subsidy between AC users and non-users. If no action is taken, both energy and peak demand are projected to increase rapidly in the coming years. This paper reviews a range of measures potentially impacting on the energy use and contribution to summer day peak demand of domestic and small business air conditioning in Australia.

The development of a national strategy to directly address the peak load effects of air conditioners is becoming increasingly urgent. Air conditioning use is growing rapidly in homes and small businesses, and could conceivably double within 10 years. This rate of growth in peak demand from air conditioners is likely to outstrip the countervailing effects of energy efficiency programs, which have a limited, indirect and uncertain effect on peak load, and even of programs which seek to reduce the demand of larger users at times of summer peak demand. The development of direct load control, more efficient means of signalling prices and other demand management measures targeting air conditioners has been relatively slow because of high supplier costs, differences of approach by State regulators and a lack of technical standardisation.

These barriers can and should be addressed, and a wide range of stakeholders has already indicated their willingness to do so. The Australian Greenhouse Office and the National Appliance and Equipment Energy Efficiency Program can play an important role in the process.

The report recommendeds that:

The Ministerial Council on Energy ensure that the development of uniform Demand Management rules, particularly those concerning load control programs for air conditioners, is placed on the agenda of the new Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER).
The Ministerial Council on Energy should direct the Energy Efficiency Working Group to convene an Air Conditioner Load Management Task Force to address regulatory, pricing and technological barriers to the development of air conditioner load control.
The Task Force should develop a National Demand Management Strategy for Small Airconditioners covering the next 10 years, with the early phase of the plan recognising and working with the existing framework of State-based electricity legislation and regulation, and the latter phase recognising the transition to a national framework.
As part of developing the 10-year plan the Task Force should consult with:
- air conditioner importers, manufacturers and standards bodies
- electricity distributors and retailers
- State, Territory and Commonwealth electricity regulators (economic and technical)
- State and Territory energy agencies
- State and local government agencies responsible for planning and building.
The MCE commission modelling of the costs and benefits of a range of approaches to demand management for small airconditioners (including avoidance of air conditioner installation in new dwellings and promotion of evaporative cooling) using local case studies; and
MCE explore ways of funding trails and programs, including use of public sector funds as well as market or consumer levies.

This page last modified 23 February 2006