Is Consumer Data Right the key to adopting energy flexibility?

We truly are living through extraordinary times.

Last week the French President, Macron, made some very unusual statements for a world leader. These statements counter the growth at all costs mantra that has driven economies since the industrial revolution, underpinned by cheap, available energy.

“What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that always seemed available … the end of the abundance of land and materials including water,” he said.

In France, unbreakable nuclear is broken.?

With this statement, he is preparing the French population to be more flexible in how they consume and be prepared to make some compromises.? Energy is a big part of this statement.?

France’s fleet of nuclear reactors has provided abundant energy for many years, mainly protecting them from price volatility.??

Historically, France sells excess nuclear-generated electricity to neighbours for a massive markup.? However, the heat and resulting drought this European summer has affected the nuclear plant’s ability to cool down. Hence, generation is significantly down, meaning France is suddenly affected by Europe's broader energy price volatility.?

This volatility has resulted in some authoritarian responses in other European countries.? For example, in Spain, you are not currently allowed to run an air conditioning system below 28 degrees, and ties in offices are banned.

In advanced economies, consumers have become accustomed to abundant electricity at a reasonable cost. Globalisation, slow renewable adoption, and climate change's effects have now stymied the abundance of energy. I believe, somewhat optimistically, we should return to a state of abundance from renewables in five to ten years. In the meantime, we must be flexible with our energy use.

In Australia, the coal baseload is quickly diminishing.

The electricity grid is an excellent example of abundance in action as it always needs to be on - it has to react to the demand created by tweaking supply up and down. Historically Australia had a coal baseload with minor variations filled by cheap gas, rooftop solar and hydro - but our coal-powered stations are quickly being retired (with five expected to shut by the end of the decade – significantly more than anticipated). Australian gas is now cripplingly expensive (thanks to globalisation and war), so it no longer provides the cheap backup for coal.

Solar will boom, creating a more uneven supply.?

With electricity prices at record highs in Australia (more rises are likely) - there will be a wave of new demand for residential solar.? Solar paybacks typically have dropped to 3-4 years (previously six years). In November this year, Consumer Data Right will launch for energy, meaning households can easily share their data to get products and services (such as solar) right-sized for their homes.? Expect to see CDR as an additional accelerator to solar uptake.???

An increasing amount of solar-generated electricity will add to the grid during the sunlight hours; residential solar out supplied coal in the electricity grid last week for the first time in winter.? Batteries (and electric vehicles) will ultimately help shift this excess solar into the night. In the meantime, there will be a period when households will need to be more flexible.

A flexible grid needs households to play a role.?

Until we have more storage, the grid needs households to use more electricity when the sun is shining and limit demand when it’s not.? A household can take some simple actions, but they first need a detailed live view of their energy system to act.? A home’s smart meter does not have this level of detail, so you need a real-time meter and an app like Clipsal Solar’s Cortex, which can be installed (at low cost) with a solar system.

Flexibility can be managed and rewarded.

Two of the home's biggest drains on electricity use are from hot water and heating/cooling.??

Many hot water systems run at night (when coal baseload made it cheaper). They must run when the sun is shining, and the solar system is performing. Also, homes with swimming pools need to set the timers of their pumps operating in the middle of the day. A simple timer adjustment can action these changes, but some changes need human intervention.

Heating and cooling should be run during daylight hours when solar energy provides free or cheaper electricity.

This flexibility has not been successfully implemented in Australia because of a lack of real-time energy data, consumer engagement mechanisms and quick financial rewards for participating (i.e. the incentive to act).?

The data from a consumer’s real-time meter is fed to the consumer via the app, providing a real-time view of their usage and actions.? But this data needs to be shared with other parties, such as the energy retailer and distributor (who can reward the flexible consumer in real-time).?

The Consumer Data Right (CDR) accommodates additional data sets (such as real-time meter data). This extra data would enable flexibility that provides consumer feedback, engagement and financial rewards to help us manage the transition of the energy system.??

Unfortunately, electricity costs will continue to be high for some time; as such, consumers with solar should be more incentivised to participate in demand response.? CDR (which covers banking and energy) is a good candidate for enabling this necessary program.