Connected Home Conference Is there an Elephant in the room? Peter Seebacher Thursday 24 th April...

Connected Home Conference

Is there an Elephant in the room?Peter Seebacher

Thursday 24th April 2008

Copper Development Centre • Australia Ltd


Global Drivers for Change

Focus is now clearly on the climate

More people having access to high-energy intensity products

Shortage of oil

Costs of energy and water are rising


Global Response to Climate Change

R&D: Energy-efficient technologies for residential and commercial

Regulation: Building codes, appliance and equipment standards

Market Transformation: Educating homeowners Energy Star), builders and developers about benefits of adopting energy efficient practices and of course pricing....


Australian Drivers for Change

Focus is now clearly on the climate

Population growth rate is high

Costs of energy and water are rising

Energy intensity is increasing


Televisions and Pools - BAU

Source: Digital CEnergy and AGO

0

200

400

600

800

1000

1200

1400

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Nu

mb

er o

f p

oo

ls (

'000

)


Bedroom numbers

Source: ABS

Separate Homes

Medium and high-density dwellings bedroom numbers


0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

2000 2010 2020 2030 2040 2050 2060

Year

Popu

latio

n

2008 linear rate

2005 ABS Series A

2005 ABS Series B

2005 ABS Series C

Australian Population


Kyoto

108% 1990 level by 2012

60% of 2000 level by 2050

$65/tonne carbon used to reduce emissions in 2020 to 30% of 1990 levels will cost the Australia economy $2.9 billion pa in 2020

This equates to $A290 per household pa


Carbon abatement cost curve

Source: McKinsey


Meeting the costs of reductions

By 2020, 25% of carbon abatement will be met with positive returns (negative marginal costs with positive economic returns over their lifecycle)

Most of these positive returns will be due to energy efficiency measures in buildings and appliances

Unlocking negative costs options involves overcoming persistent barriers to market failure due to misaligned incentives such as mismatches between who pays and who gains the benefit (home builder vs. home owner)

i.e. it benefits the tenant but not the builder to install energy efficient lighting.

Source: McKinsey


McKinsey Recommendations

Accelerate policies to:

Pursue negative cost opportunities through regulation and incentives

Fast track key technologies

Accelerate change in consumer behaviour

Establish a national carbon scheme


Response Climate Change

Policies to:

Increase prices

Legislation to transform market

Resulting in:

Less energy per person

More efficient use of assets

Source: McKinsey


Emissions by Sector

Source: McKinsey


The NEM

Source: SA Government


Load Duration Curve

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0 20 40 60 80 100

% of Half Hour Occurrences

Net

rwo

rk D

eman

d M

W BAULoad Shifting

Shift and reduce


What’s on the horizon

Price Signals

ToU Metering

Carbon Tax

DSM

Loads will be turned off

Shifts the load ≠ not less energy


Retail sector

28% of electricity used in residential sector

Retail price about 4 times wholesale price and about 2.5 times industry price.

After full impact of “climate change” in monetary terms it will probably be the most important sector.


Impact on DevicesConsumer behaviour

Energy Star, MEPSAir conditioners

Dryers

Refrigerators

Pool pumps others

Device improvements

Better design

More efficient devices

Less standby power

Removal from market

Incandescent lighting


Sydney Water Prices

0

50

100

150

200

250

300

350

2003/04 2004/05 2005/06 2006/07

Ho

us

eh

old

pri

ce

an

d w

ate

r u

se

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60 City of Sydneyaverage water useper property(kilolitres)

Cost per household($)

Potable water cost($/kilolitre)


It is now an energy centric world

The political environment has changed

The ensuing legislative framework and regulatory requirements will mandate change

These will drive the demand and investment required to implement solutions for an energy centric world.


Milestones

20% renewable energy target

Swimming pool Star rating and MEPS

Demand side management standards

Major revisions to Nationwide House Efficiency Rating

Scheme

Energy Australia commences ToU meter rollout

Photovoltaic Rebate Program

NSW carbon credits drop $12 to $6

Forests NSW Abatement Certificates

4 Star Standard multi residential buildings

NSW mandated greenhouse gas emissions trade scheme

Renewable Energy Certificates

SA Residential Energy Efficiency Scheme

National emissions trading scheme will commence

Incandescent light bulbs illegal

Standby power

Kyoto agreement 108% of 1990 levels met

2000 2005 2010 2015 2020 2025


Impact on Housing

Design (shell)

Construction (building codes)

Appliances/lighting

Connected devices

This is not a one-off event, home owners will be reminded of this every time they pay an electricity or water bill


Smart and Connected WorldQ: What is required to participate in this new energy smart and connected world?

– External to the Household

– Internal to the Household

– Common to both worlds

A: Seamless systems and devices working cost effectively together


Connectivity and Communications

Energy Management

By you

By your appliances themselves

By your next door neighbours appliances

By more remote external agent

All these require connectivity and communications systems


The Authorities Preferred Option

Source: Advanced Metering Infrastructure. Minimum State-wide Functionality Specification. Prepared for the Department of Primary Industries.


26

Smart Devices

Smart Homes

Smart Communities

Smart Cities

Smart Country

Meta Picture

All fully connected as Smart Systems


What can be done by industry?

Join an association and read your trade magazines to keep informed of the changes and how they will continue to impact on you, your industry and your customers

Start positioning your company to take advantage of the new opportunities and to defend against possible risks

Train yourself and your staff

Develop customers solutions that help them save energy and money


Customer Empowerment

Empower your customers to take control of their energy needs:

Energy usage

Know what is happening – metering and in-home displays

Turn off unused appliances

Optimise energy use

Save money by controlling appliances, pools and air conditioning

Make money through rebates and energy generation – solar power

Help your customers take control of their energy needs and to maintain the lifestyle they demand at a price they can afford

Electricity providers will take control about 15 days per year, that leaves 350 days where the resident will be left to their own devices and if they do not manage their loads they will pay dearly for it.


This will require

Equipment that can be controlled

Meters and displays

Control equipment

Connections for control signals, see

Others


Summary Pressures for change are large

We are in the middle of legislative and regulatory change that will have a rapidly increasing impact over next 2 – 5 years

Customers will demand solutions as soon as costs rise significantly and their lifestyles are greatly affected – this is starting to happen now

You have a role to play right now


31

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