Energy efficiency in the commercial and residential sector is working. At least that’s part of the reason for a predicted drop in electricity consumption of 1.1 per cent between June 2014 and June 2016 compared to 2013 demand, according to the Australian Energy Regulator’s 2014 State of the Energy Market report, released on 19 December last year.

The savings equates to more than 2000 gigawatt-hours less electricity consumed. The bad news is that after the abolition of the carbon tax, carbon emissions from electricity generation are up.

The AER said there were structural shifts across the sector – but sadly, these don’t appear to include a shift away from coal towards more utility-scale renewables.

AER chair Paula Conboy said lower demand was removing the need for major expansion of electricity networks, and that the AER is seeing “greater focus on demand response and small scale local generation.”

The report said that the ongoing decline in demand will be partly due to “commercial and residential customers more actively managing their energy use in response to price signals, including using energy efficiency measures such as solar water heating.

“New building regulations on energy efficiency reinforce this trend. AEMO estimated total energy savings of around 10 per cent annually over the next three years, with key contributions from more energy efficient air conditioning, refrigeration and electronics.”

  • Read the full report here.

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