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Until 2010, for well over a century, through two world wars and the Great Depression, the quantity of electricity used in Australia each year was greater than the year before. The electricity consumption decrease has been relatively large in the National Electricity Market (NEM), which covers the five eastern states and the ACT, but is also occurring in Western Australia. Specifically, NEM demand in 2013 (financial year) was almost 8 terawatt hours (TWh) (4.3%) lower than in the peak year of 2009.
Consider that 37 TWh is equal to the output of almost 5,000 MW of coal fired generation capacity. All of the decline in consumption has in fact been at the expense of coal fired generators.
To be precise, what the above figures are measuring is not electricity used by final consumers, but electricity supplied to the national grid system by large generators which participate in the (wholesale) National Electricity Market. It is very difficult to find consolidated data on the quantities of electricity supplied by small distributed generators, such as rooftop photovoltaics and landfill gas plants. Australia’s first mandatory regulatory energy efficiency measures were introduced in the late 1990s.
Since then, these standards have been extended to a very wide range of residential and commercial appliances and equipment.
Smaller demand reductions have come from increased uptake of solar and heat pump water heaters (supported by various government programs), the Home Insulation Program (the so-called “pink batts scheme”), and the Victorian and NSW retailer energy efficiency obligation schemes.
Between October 2011 and September 2012, three major industrial electricity users, all in NSW – the Port Kembla steelworks, the Kurri Kurri aluminium smelter and the Clyde oil refinery – were partially or totally shut down.
However, detailed analysis of annual public reports of National Greenhouse and Energy Reporting System (NGERS) shows that, other than the companies linked to the above closures, electricity consumption by the largest 100 electricity users in Australia over the three years from 2010 to 2012 was remarkably constant. That said, the longer term structural shift in the economy away from manufacturing to services (and mining) has accelerated in recent years. For several decades, ending around 2006, Australia has had steady growth in output of primary metals and other electricity intensive commodities, and this drove a steady increase in electricity consumption. This means that over and above the absolute decline caused by the closures, lack of growth in output of electricity intensive commodities is contributing to lack of growth in demand for electricity, amounting to about 14% of the 37 TWh. If all the above contributions to reduced electricity demand are added to actual demand, starting in 2006, the result is a series of total annual numbers, which can be thought of as total demand for electricity services. From 2010 to 2013 a widening gap between the modelled demand for electricity services and the historical projected demand emerges. The most interesting finding of this part of the modelling is the abrupt change in consumer responsiveness to higher prices after 2010. Once they paid attention, consumers responded by reducing their consumption to limit their spending. It seems residential electricity consumers have managed, very sensibly, to almost completely offset the effect of higher electricity prices on their household budgets by reducing consumption. The irony is that all the misinformation coming from Abbott scared a lot people into doing very irrational things that cut back on power consumption. Petroleum & Other LiquidsCrude oil, gasoline, heating oil, diesel, propane, and other liquids including biofuels and natural gas liquids.
Natural GasExploration and reserves, storage, imports and exports, production, prices, sales.
ElectricitySales, revenue and prices, power plants, fuel use, stocks, generation, trade, demand & emissions.

Consumption & EfficiencyEnergy use in homes, commercial buildings, manufacturing, and transportation. CoalReserves, production, prices, employ- ment and productivity, distribution, stocks, imports and exports.
Renewable &Alternative FuelsIncludes hydropower, solar, wind, geothermal, biomass and ethanol.
Total EnergyComprehensive data summaries, comparisons, analysis, and projections integrated across all energy sources.
Analysis & ProjectionsMonthly and yearly energy forecasts, analysis of energy topics, financial analysis, Congressional reports. Markets & FinanceFinancial market analysis and financial data for major energy companies. InternationalInternational energy information, including overviews, rankings, data, and analyses. Prices and demand are shown for six Regional Transmission Operator (RTO) markets: ISO New England (ISO-NE), New York ISO (NYISO), PJM Interconnection (PJM), Midwest ISO (MISO), Electric Reliability Council of Texas (ERCOT), and two locations in the California ISO (CAISO).
In the second tab immediately below, we show monthly and annual ranges of on-peak, daily wholesale natural gas prices at selected pricing locations in the United States. Wholesale electricity and natural gas prices were much lower this January than in years' past, particularly in the Northeast.
The low wholesale natural gas prices this January were even more pronounced than the fall in wholesale electricity prices. Electricity system daily peak demand this January was lower than last year in all regions except California (CAISO), Progress Florida, and the Bonneville Power Administration (BPA) footprint. In the three years since 2010, the quantity used each year has been less than the year before.
If electricity consumption in the NEM had continued to grow from 2005 onward at the same rate as it did for the previous 20 years, consumption would have been about 37 TWh higher in 2013 than it actually was. This is just less than the combined capacity of Bayswater plus Eraring in NSW or, in Victoria, Loy Yang A plus Loy Yang B plus Hazelwood. These closures removed approximately 3.6 TWh of annual electricity consumption from the NEM, which is about 10% of the 37 TWh reduction.
Declining manufacturing output overall is not, in general, causing an absolute fall in demand.
This includes both actual electricity and services provided by using a given quantity of electricity more efficiently. This gap can be completely accounted for by introducing consumer response to higher electricity prices into the model. It is surely not a coincidence that 2009-10 was the year in which the possible effect of a carbon price on electricity prices became a major national political issue.
The hypothesis is that the political attention being paid to electricity prices led consumers to pay more attention than they had previously done to their expenditure on electricity. Looking at the recently published ABS Energy Account data, we can see that real average annual household expenditure on electricity grew strongly until 2009-10. Like pure technical articles it is rational, balanced, not pejorative and with no ad hominem attacks. Below we look at monthly and annual ranges of on-peak, daily wholesale prices at selected pricing locations and daily peak demand for selected electricity systems in the Nation.

Also shown are wholesale prices at trading hubs in Louisiana (into Entergy), Southwest (Palo Verde) and Northwest (Mid-Columbia). The range of daily natural gas prices is shown for the same month and year as the electricity price range chart. A combination of warmer-than-normal temperatures across the Northeast, additional pipeline infrastructure, and the generally well-supplied and low-priced natural gas environment led to regional prices just a fraction of what happened over the last several years. California loads peaked during the first week of the month (though loads were low compared to other times of the year), as cool weather and heavy precipitation blanketed the state. Greenhouse gas emissions fell by 9.2 Mt CO2-e, roughly 2% of Australia’s total emissions, in 2012 alone. We have used data in reviews of the appliance and equipment measures and the building measures to estimate that the increased impact of these measures between 2006 and 2013 has in total reduced annual demand for electricity by 10.5 TWh, or 28% of the total 37 TWh reduction.
We found that demand defined and calculated in this way (and also including the reductions from the major industry closures) closely tracks the historical trend growth in electricity demand, up to 2010 . It was also the year when increasing political attention was paid to the rapid increases in electricity prices already occurring, mainly because of higher network costs.
Since then it has barely increased, despite continuing large increases in electricity prices. NSW, in particular, recently experienced the slowest house construction rate in 50 years, despite satisfactory economic growth as well as continued population growth.
The range of daily prices and demand data is shown for the report month and for the year ending with the report month.
In addition to the RTO systems, peak demand is also shown for the Southern Company, Progress Florida, Tucson Electric, and the Bonneville Power Authority (BPA).
Wholesale electricity prices are closely tied to wholesale natural gas prices in all but the center of the country. Progress Florida's 10,764 megawatt (MW) peak demand was 18% higher than its peak last January, though winter loads are considerably lower in this region than those occurring during summer months.
So, although important and growing, these sources alone do not account for the whole of the 8 TWh reduction from the peak year, let alone the 37 TWh reduction from the long term trend. Plausibly, the more persons living in a dwelling, the lower the electricity use per capita therein. Refer to the map tabs for the locations of the electricity and natural gas pricing hubs and the electric systems for which peak demand ranges are shown. Therefore, one can often explain current wholesale electricity prices by looking at what is happening with natural gas prices.
Should the trend reverse and more households be formed, watch for sectoral growth in electricity demand. Judging entirely from office gossip, electricity expenses do seem to have touched the ordinary person’s hip-pocket nerve, as your article implies.

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