Consumers driving energy change: Deloitte

Deloitte has released a new report highlighting how innovation in the energy sector is not just coming from the supply side, but instead, from those who use energy.

Noting that “communities and consumers, large and small, are taking charge of their own energy”, the report outlines how these groups are driving change.

Responding to this shift, the report outlines some of the new technologies, ideas, and business models that are emerging as energy consumers shape the energy transition.

The Deloitte report highlights that, first, the installation of solar PV as one example where consumers are starting to get involved in the production of energy. Next, energy efficiency through demand management is playing a larger role in the shape of electricity networks. Further, as the cost of batteries decrease, businesses are finding ways to reduce their energy footprint.

These trends are driven by the rapidly rising cost of energy. Industrial consumers make up 74 per cent of the 183 TWh of energy used in Australia, and the price of this energy has increased from 10c/kWh in 2001-2008 to 15.7c/kWh in 2018-2018, an annual increase of 4.6 per cent. Alternative sources of energy are one way manufacturers are offsetting this cost.

Another change is in regulatory responses. Zinc metals manufacturer, Sun Metals Corporation lodged a rule change request in 2015 to implement five-minute settlements, to allow more efficient patterns of generator dispatch and consumption, with the rule change adopted by the AEMC. The change will be adopted after a transition process by 2021.

Taking these kinds of changes further will be the incorporation of consumer data into energy networks, which could open up the market to more competition, create new products and services, and allow for more flexibility and connectivity.

At a broader level, the report notes that not enough is currently being done by government.

“Governments are not making change fast enough for some and others are of the view that governments alone cannot solve the myriad of issues that are facing the energy market.”

Resolving these issues could become the domain of major users, such as manufacturers, who will be able to shape the energy market in ways that benefit them.