How We Use Electricity On Christmas Day

How We Use Electricity On Christmas Day

On Christmas Day in Australia, fewer people are at their paid employment and more working premises are closed than on any other day in the year. How does this affect demand for electricity, widely seen as fundamentally associated with economic activity?

Picture: Drew___

Looking at operational data for the National Electricity Market (NEM) sheds interesting light on how patterns of electricity demand and supply in Australia are changing, as well as on some features which appear unchanging.

Total electrical energy used on Christmas Day last year, in Victoria and SA, was the smallest for the entire year. In NSW, total energy consumption was slightly lower on Boxing Day. In Queensland, two Sundays in early September were lower, but only just.

So minimum economic activity does, more or less, correlate with minimum electrical energy consumption.

That generalisation applies across the whole year. Over Easter, the other extended holiday period, daily energy consumption is markedly lower than on an average working day. And energy consumption on weekends and other public holidays is also, on average, lower than on working days.

Perhaps more surprising is the fact that electrical energy consumption on Christmas Day remains such a high proportion of annual average working day consumption. In NSW, consumption on Christmas Day 2012 was 77 per cent of average working day consumption during the year. In Victoria and SA it was 71 per cent and in Queensland it was 85 per cent.

Either there is a large increase in residential electricity consumption when there are more people at home throughout the day. Or, businesses have a large degree energy consumption “inertia”.

In fact, both factors are at work. But their relative importance will vary with location across electricity distribution networks.

Understanding the relative size of these effects could help determine energy and greenhouse emissions policy. For example, energy audits of schools often find high levels of energy consumption even during holidays when there are few people in the buildings. This is either because of poor energy management practices, or lack of suitable controls on energy-using plant and equipment.

Only the individual electricity network businesses have the detailed spatial data needed to determine whether such consumption patterns are common. But if they are, this could be an excellent, low-cost way to reduce energy use in these locations, and thus reduce power station emissions. Businesses could even apply for funding through the proposed Emissions Reduction Fund (“direct action“).

Looking at electricity consumption on Christmas Day is also a good way of understanding the effects of air conditioning.

In Queensland, air conditioning is responsible for a large fraction of total electricity demand during summer but, because of the climate, the demand does not vary greatly from day to day. But in NSW, Victoria and SA, in increasing order, day-to-day variation in summer temperatures cause very large variations in daily electrical energy consumption and even larger variations in daily peaks.

The Christmas-New Year period of 2007-08, when Christmas and New Year Days were on Tuesday, provides a very clear example. In Melbourne, Christmas Day was cool (maximum 19C) and New Years Day was hot (maximum 40C). The graph shows daily NEM peak electricity demand in Victoria and maximum daily temperature in Melbourne.

How We Use Electricity On Christmas Day

Demand was very low on Christmas Day and Boxing Day, when it was cool, but high on New Year’s Day when it was very hot. Indeed maximum demand on New Year’s Day was higher than on each of the two following working days and also than the first three day of the following working week, on all of which it was cooler. Similar relationships can be seen when the weekends are compared.

Daily electrical energy shows a similar pattern, though the variation between highest and lowest is less extreme. While peak demand was 73 per cent higher on New Year’s Eve than on Christmas Day, total energy was only 45 per cent higher. Similar relationships can be seen around the Australia Day public holiday and over weekends in January, February and March in all three southern states (though not in Tasmania where the use of air conditioning is very much lower).

Obviously, when it is hot, daily weather has a larger effect on electricity consumption than whether the hot day is a public holiday, a weekend or a normal weekday. Equally obviously, it is peak demand on hot days which determines how much distribution network capacity is required.

From the perspective of 2013, this example comes with both good news and bad news. The good news is that since 2008 the average efficiency of new air conditioning systems has increased considerably. As the stock of old units is gradually replaced the quantity of electricity required to deliver a given level of cooling will decrease.

The bad news is that in 2008 growth of peak demand on hot days was expected to continue unabated. Network businesses got regulatory approval to build and recover the costs of this capacity, most of it has been built (even if it is not now needed) and electricity consumers are nevertheless paying for it.

The second graph looks at South Australia and compares Christmas 2007 with Christmas 2012; Christmas Day was on Tuesday in both years. The most obvious feature is the enormous change in peak demand from Sunday 23 to Monday 24 in 201, confirming the extreme temperature sensitivity of electricity demand in the state.

How We Use Electricity On Christmas Day

Perhaps the most interesting feature, however, is the change in the shape of the daily load curve on December 25 and 26, which were mild sunny days in both years.

In 2008, minimum daily demand occurred at 4.30am, which until recently has been the normal pattern in SA and throughout Australia. In 2012, however, the daily minimum was at 2.30pm.

This radical change is clearly caused by supply from rooftop photovoltaic installations; these are not included in data for National Electricity Market operations. On most weekends and public holidays, unless it is very hot, very cold or very cloudy, the daily load profile in SA now resembles that on Christmas Day 2012.

In recent months this pattern has begun to also appear on some working weekdays, such as Tuesday 15 and Friday 18 October 2013. Moreover, on some days the daily peak occurs at midnight, when so-called off-peak electric water heaters (clearly now a gross misnomer) are automatically switched on.

For several years, AEMO (the electricity market operator) has been laboriously developing proposals to change the electricity market rules so consumers can temporarily curtail their demand at times of high system demand. This is known as a demand response mechanism. At its meeting on Friday December 13 the Standing Council on Energy and Resources was asked to endorse this kind of rule change. It declined to do so, asking instead for further study.

It is hard to avoid the suspicion that ministers, particularly those from NSW, Queensland and WA, whose governments own and derive significant revenue from the electricity networks in their states, see any demand reduction as a threat to these revenues.

Here’s a radical thought. Instead of charging PV owners whose systems help to flatten the daily load curve, why not levy a capacity (per kW) charge on owners of large residential air conditioners. This would ensure that those whose demand for energy was the main reason for overbuilding network capacity paid for what was built for their comfort and convenience.

If thoroughly implemented, it could do much more than repeal of the carbon price to reduce the cost of electricity for low income consumers without air conditioning. And that would be a great Christmas present.

Hugh Saddler is a Research Associate at the Centre for Climate Economics & Policy at the Australian National University. He does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

The ConversationThis article was originally published at The Conversation.


  • A thoughtful, concise, deep and interesting article. A good read. Thanks for that. Utterly perplexing to see such a good article on LH but kudos when its due. At least there were no nasty digs at the industry.

    That said I wouldn’t think a disincentive like levying airconditioner owners would work. It would probably encourage usage seeing the fee increase wouldn’t be that much (as a percentage of your overall electricity costs) and thus people would run them knowing that they would be free of any guilt.

    For example; I have a neighbour who installed a 10kw house system and he runs it constantly. His bills have increased three fold but at the sametime he accepts this and pays it. Charging him 10% more wouldn’t stop him nor reduce demand in the way you envisioned. Probably make him feel better.

    One interesting problem your article didn’t express was the fact that electricity producers are in a nightmare positive feedback loop.

    With the advent of PV cell, and as your research illustrates, the mid-day peak has been flattened, and this isn’t just with residential usage. Businesses are now also actively moving to sources produced off the grid. Remember the business market is a big part of the revenues/margins obtained by the producers and network providers. Consequently the day time peak load is reduced. You’d think this is a good thing but again as you eluded to in your article the problem is far worse. The revenue obtained in this period are in serious decline. The problem being this; these revenue contains the fattest margin.

    Now of course after paying shareholders and such electricity networks/producers use their revenues to cover (subsidies) the cost of the entire network. This means that the fattest margin subsidies the highest costs of the network, i.e. the provision and production of service where the highest cost exists, in the country areas for example. This is because being a universal service they are obligated to provide it in areas that could not possibly bare the real cost. So they force the entire customer base to cover the cost of provisioning, producing and maintain service in rural areas where it would take decades if not hundreds of years to recover the true cost from those using that part of the network.

    With less money to maintain the network in those areas and more people moving to PV and other systems, the electricity companies are forced to increase the cost of the product, across the board. That then puts even greater pressure on customers to move to PV and such which then reduces the margin and revenue of the electricity producers who are then forced to increase costs which……..

    So as you can see the last customers on the network will either be those who can’t afford to or for technical reasons cannot. They will end up paying an increasingly cost of centralised energy. And this decline isn’t linear. For example in the US, California took 30 years to provision 1,000 MW of PV. In the last 12 month they’ve provisioned another 1,000 MW. With a massive amount of R&D in the market (look at the tech journals. Daily advances with PV, especially in the spray on and non-silicon/bendy PV cells areas). PV cells are currently $0.74/watt. Imagine when its $0.06 per watt? It took 40 years to get from $40/Watt to $0.74/watt. The next declines are going to see a massive drop in PV (probably to the detriment of the PVc industry) to the point where even the poorest will be able to afford to spray PV onto their house and alligator clip that shit to a inverter and bammo, power.

    One day we’re going to wake up and the centralised energy producers are utterly screwed.

    The only real option for them is horizontally intergrate into other parts of the electricity market (perhaps making PV etc) however because like in Australia they are heavily regulated and controlled its unlikely they’ll ever turn to this option.

    What I’d really like to understand is the sort of internal discussions are occurring in the energy market and their business analyst community. Surely they saw the writing on the wall a good 1-2 decades ago? What steps have they taken apart from gold plating and increasing the cost of electricity? What has the advice to the government been on this front?

    Surely a news/tech journal/blog could put in a freedom of information request to obtain this sort of analysis and briefing notes? I’d imagine the papers would be titled something like; “The impact of photovoltaic cell on regulated electricity markets” or “Long term forecast for renewable energy sources”.

  • Don’t you love it when these chardonnay socialist-greenies say things like “levy a capacity (per kW) charge on owners of large residential air conditioners”?
    I have a relative who is a disabled pensioner with a serious medical condition. She has to run her air-conditioner on hot days to avoid death.
    This Hugh Saddler, from his comfortable, airconditioned ivory tower office in out-of-touch Canberra, proposes a policy that would kill her.

    Thanks a lot.

    • @458italia, perhaps instead of prejudging what Hugh Saddler said, you could have read the article until the end:
      “If thoroughly implemented, it could do much more than repeal of the carbon price to reduce the cost of electricity for low income consumers without air conditioning. And that would be a great Christmas present.”
      Certainly in the Australian state I live, there also are additional concessions specifically for those who have additional needs, for whom air-conditioning is essential (a friend’s child was born without sweat glands).
      I didn’t spot where he mentioned his wine preferences, are you a sommelier with an inside knowledge of his choices, or is it all assumption?

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