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Opinion: Free electricity can break the climate deadlock

David Fickling / Bloomberg
David Fickling / Bloomberg • 5 min read
Opinion: Free electricity can break the climate deadlock
Utilities in three Australian states will be required to offer households at least three hours of free electricity in the middle of the day, when an abundance of solar generation routinely drives prices into negative territory.
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(Nov 11): It often comes as a surprise to find the little hacks strewn through the consumer universe that could make our lives easier, if only we noticed them: The unobtrusive light on your car dashboard pointing out which side the fuel tank is on, the handy tabs that help you unspool kitchen wrap from the box and the way Chinese takeout boxes can be unfolded into plates.

It’s the same with the timers you’re ignoring on almost every appliance in your house. Most electricity-hungry household devices — from water heaters to air conditioners, washing machines, dryers, dishwashers, plug-in cars, robot vacuums and swimming-pool cleaners — come with one built-in, so you can choose when to run or charge them. Far too few of us are using them.

That’s something the Australian government is looking to change. Utilities in three states will be required to offer households at least three hours of free electricity in the middle of the day, when an abundance of solar generation routinely drives prices into negative territory. The idea is to push more demand to the same hours and away from the evening peak, when prices surge. That should help balance the grid while offering voters a zero-cost benefit.

It’s a smart piece of retail energy politics of a sort that’s far too thin on the ground as fossil fuel revanchists in the US, Europe and elsewhere attempt to reverse progress on climate change. Leaders starting a downbeat COP30 United Nations climate conference in the Brazilian city of Belém this week should take heed.

If you spend much time around the bots and blowhards on social media, you’d assume that huge numbers of people have grown jaded about the possibility of the energy transition. And yet real change is happening. Clean power generated almost three-quarters of electricity in the European Union and the UK so far this year, an achievement that would have been considered science fiction 15 years ago. Stellar performance from wind and solar farms has meant that China’s fossil-fired generation fell 1% through September despite booming power demand — equivalent, in emissions terms, to switching off half of Germany’s coal plants.

See also: A third of Asia’s coal-fired power plants could generate ‘transition credits’, says MAS’s upcoming report

Far too many places, however, are tripping over themselves in selling this good news story. Electricity bills have been rising because of the cost of natural gas and weatherproofing climate-exposed power grids. This phenomenon, however, is routinely blamed on renewables, the one part of the cost stack whose price has been relentlessly falling. Governments slow the transition by imposing costly local manufacturing requirements or insisting on battery backup below levels where it’s needed to ensure reliability. Sales of heat pumps and electric vehicles struggle as support is maintained for natural gas and crude oil, even as it’s cut for clean alternatives.

Those stuck deep in the weeds of redesigning the power systems that underpin our modern economy risk missing the big picture — which is that clean energy is cheaper to the consumer, quite apart from being superior in both climate and health terms. Energy costs are typically obfuscated by the dense thicket of regulation and cross-subsidies that hold the network together. Sometimes, it needs a politician at a distance from the system to cut through the murk and come up with a simple policy: If generators are having to pay money to put their electricity on the grid, householders can at the very least get it for free.

There are plenty of other places where we’re likely to see similar improvements soon. Rising electricity consumption in the years ahead by EVs, heat pumps, and even data centres ought to start mitigating those high costs for rebuilding our grids. Such network charges are split between every kilowatt-hour that’s consumed, so an increase in demand should start reducing the cost applied to each unit of electricity.

See also: Keppel signs MOU with Siemens Energy to explore low-carbon power generation solutions

Despite relentless focus on the supposed drawbacks of EVs, just 1% of people who’ve bought them say they’d consider going back to a conventional car — and uptake is increasing from Norway to Nepal. Though gas consumption continues to rise, demand for coal and crude oil is flat or falling.

The challenge to politicians gathering in Brazil is to look past the pro-fossil drumbeat from Washington and recognise how fast the system is switching. Then, they need to make sure the fruits of this revolution aren’t used to patch up the bad investment decisions of a previous generation but returned to households. A few hours of free electricity can encourage us all to employ the tools already at our disposal. Show people the ways that the energy transition can work for them, and they’ll start working for the energy transition, too.

Uploaded by Arion Yeow

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