What does the future have in store for electricity consumption?

Changes ahead for nem 171 79414 0 14092171 300

Australia's National Electricity Market (NEM) is responsible for delivering energy to homes up and down the country, but is it likely to experience any changes in the near future?

The 2014 National Electricity Forecasting Report from the Australian Energy Market Operator (AEMO) predicts a decline in electricity consumption over the next three years.

Not taking into account liquefied natural gas (LNG) projects in Queensland, it's anticipated there will be a 1.1 per cent annual fall in NEM electricity consumption over the next few years. AEMO believes this will reflect a 3 per cent average annual fall in large industrial consumption.

This marks a stark contrast to recent times, as an average yearly decline of 1.8 per cent was registered between 2009-10 and 2013-14. It was partly spurred by a rise in retail electricity prices that resulted from increasing network costs.

AEMO Managing Director and Chief Executive Officer Matt Zema explained there is plenty of evidence to suggest consumption will only continue to fall, at least for the foreseeable future.

Queensland stands apart from the crowd

AEMO revealed how Queensland is the only region where there's likely to be a notable rise in electricity consumption in the short term.

Mr Zema said "LNG projects [are] ramping up gradually from next financial year which are contributing to annual average increases of 4.1 per cent overall, and 16.4 per cent for large industrial in that state".

He noted that without taking LNG into account, the outlook is generally flat and represents a fall in energy-intensive industries, as well as the effect of consumer behaviour on residential consumption.

Other trends affecting the market

It's not only the rise in LNG projects that's taking its toll on the electricity market, as the report also pointed out how rooftop solar installations are having an impact.

Annual average growth of 23.6 per cent in the rooftop solar photovoltaic (PV) market is bringing down consumption from the grid, meaning fewer people are relying on the NEM to supply their power.

Over the 2013-14 financial year, rooftop PV has resulted in 2.9 per cent less energy being sourced from the national grid.

There's also the issue of Australians investing in more energy efficient appliances, which is leading to increased annual savings in electricity usage.

Meanwhile, builders are under increased pressure to improve the environmental credentials of their projects and ensure they can deliver the best possible efficiency savings.

Posted by Richard West