Is there a way for homeowners to support the shift to renewables without putting solar on their roofs? They can opt for a retailer’s green power offering – which may carry a price premium – but the options are fairly limited. Many Australians may support the shift to clean energy in their hearts and minds, but it isn’t easy for residential energy users to directly back the solar and wind projects that are working hard to elbow coal aside.
Another way to support renewables might be to buy energy at the times of day they are most present in the grid – the middle of the day for solar and the dead of night, perhaps, for wind.
If households are willing to shift their demand for energy to match the generation peaks of renewables, this aggregate load will start to support market prices when solar and wind are generating.
That’s the thinking behind Amber Electric, a new energy company which recently raised $2.5 million in an investment round led by Square Peg.
Watch the spot
For $10 a month, Amber customers get access to an app that displays the half-hour wholesale price, renewables generation as a percentage of electricity in the grid and a 12-hour forecast for prices and renewables penetration. Customers are charged the wholesale price – something they may never even knew existed.
“We give customers direct access to the wholesale electricity price, which is the cheapest way to buy power over time,” Amber co-founder Dan Adams tells EcoGeneration. “We help customers shift some of their usage to the time that cheaper renewables is generating, and that wholesale price is low.”
A slow cumulative shift in demand will inspire more investment in clean energy, the Amber team figures. “And that will help enable that transition to 100% renewable energy, which is one of the things I’m passionate about,” Adams says.
“If you want to get to 100% renewables you either need large-scale batteries or demand flexibility, where you use more of that power when it’s available,” he says. “We’re building a whole model around that demand flexibility as a vehicle to enable the transition to renewables in a much more cost-effective way than building large-scale batteries.”
All the energy Amber sells is carbon-neutral, through its purchasing certified emissions reduction credits or renewable energy certificates. The service will be offered through Amber’s partnership with licenced electricity retailer Energy Locals.
Amber is starting with a focus on residential customers with plans to include small business later in the year. It has no plans to engage with large-scale industrial or commercial customers.
A fluctuating energy price will be a major revelation to residential consumers. The rates they see on bills are moderated by a retailer’s hedging costs – to turn a variable wholesale price into a fixed price – and its profit margin. By showing customers the wild volatility of the wholesale price, Adams hopes they’ll see why it makes so much sense to think harder about when they run energy-hungry appliances.
Under usual arrangements with retailers, there just isn’t any incentive for customers to change their energy habits. “If customers can shift some of their usage to those times when cheaper renewables are generating, the customers don’t get any of that benefit – their retailer does.”
The wholesale price can turn negative, of course, which hurts when you’re a generator or a retailer. In its trial in South Australia and NSW Amber has been paying customers to use power during times of negative pricing, when there has been surplus renewables energy in the grid. “People are pretty amazed when they discover that is the case,” Adams says. “But it’s not too good to be true – it’s just the way the market works.”
Customers must have a smart meter, which can be organised by Amber – even for renters. The question is whether people will watch the spot price all day and rush around to switch on air-conditioning units and put on a load of washing when energy is cheap. As smart devices replace dumb ones, it may be a case customers after a while have a pretty good idea of daily price patterns and time appliances to run when the price is low.
Amber is running a pilot with SwitchDin to automate household batteries to run at the times when renewables are generating and looking at ways to program electric vehicle chargers, electric hot water systems and pool pumps to run at the times when those cheaper renewables are generating.
“If we can automate those so it’s a seamless experience for people we think that is the future of energy.”