(I live in South Australia, and I've previously worked on electricity energy trading systems here)<p>This is a pretty good article, but misses a little context that maybe helpful to non-Australian readers.<p>1) Power bills in Australia have been rising rapidly over the last couple of years. The reactionary response has been to blame the new Carbon Tax, but the real causes are much more complex[1].<p>2) In South Australia at least it gets really, really hot. For example in February 2009 we had 6 Consecutive days over 40 °C (104 °F) and a maximum of 45.7 °C (114.3 °F)[2], and then in November 2009 we had 6 Consecutive days over 38 °C (~100 °F)[3]<p>These peak temperatures occur earlier in the day than the typical power spike (12pm-4pm instead of 5pm-7pm), and caused huge power spikes (from air conditioner usage), and this often causes power companies to have to shut off power (they have a policy of doing rolling blackouts when they don't have enough capacity).<p><i>This</i> peak demand is much, much higher than the average peak demand shown on the linked article, and these are the peaks the power companies invest to meet. If these peaks are reduced by solar panel usage (which they should be, since the come during the best time for solar production) then it should reduce the requirements for larger power stations.<p>[1] <a href="http://www.heraldsun.com.au/opinion/power-play-between-federal-and-state-govenments-is-just-a-costly-farce/story-e6frfhqf-1226454453982" rel="nofollow">http://www.heraldsun.com.au/opinion/power-play-between-feder...</a><p>[2] <a href="http://en.wikipedia.org/wiki/Early_2009_southeastern_Australia_heat_wave#Adelaide.2C_South_Australia" rel="nofollow">http://en.wikipedia.org/wiki/Early_2009_southeastern_Austral...</a><p>[3] <a href="http://en.wikipedia.org/wiki/Late_2009_southeastern_Australia_heat_wave#Adelaide.2C_South_Australia" rel="nofollow">http://en.wikipedia.org/wiki/Late_2009_southeastern_Australi...</a>
An interesting problem is highlighted on that graph: solar seems to be peaking around mid-day, but energy demand peaks at 5 - 7 pm when solar is pretty weak. The curves showing pre- and post-solar have almost identical peaks; solar hasn't yet successfully reduced peak load. (The California energy system posts a similar graph, with a similar shape: <a href="http://www.caiso.com/Pages/TodaysOutlook.aspx" rel="nofollow">http://www.caiso.com/Pages/TodaysOutlook.aspx</a> , made worse by the fact that the California wind farms apparently perform best in the morning and worst in the afternoon.)<p>The difficulty is that, unless storage gets dramatically better, we'll still need a huge conventional electricity base. And it will still burn a huge amount of fuel: most generators are not "instant-on" -- it can take weeks to spin up a nuclear plant, days to spin up a coal plant, and hours [1] to spin up a natural gas plant. Of course, there are some savings, but there is huge waste if you have to keep the whole conventional energy infrastructure spinning during the day just to fuel that 6 pm peak load.<p>Advice to entrepreneurs: finding a cost-effective way to store solar energy for 4 hours will be worth more than another 2% increase in efficiency. And inventing instant-on conventional-fuel plants will also make a huge difference in GHG emissions.<p>[1] - Page 8 of <a href="http://www.euec.com/getattachment/euecjournal/Paper_3.pdf.aspx" rel="nofollow">http://www.euec.com/getattachment/euecjournal/Paper_3.pdf.as...</a> gives times between 1.2 hours for a warm start to 6 hours for a cold start.
TL:DR; version: Utilities make most of their profit during 'peak' times (noon to 5pm) and SolarPV systems are reducing the requirement during those times, putting price pressure on electricity.<p>Here in California we had a similar challenge but with Watar. We periodically go through drought cycles and during the last big incentives were put in place to get people to use less water, rebates for toilets, reduced cost if you were 20% below your non-drought average, no watering during the day, drip irrigation, etc etc. Then the utility needs a rate increase because they aren't getting as much water usage. It is a hard sell though to tell people "You have to use 20% less but we're going to charge you the same amount"<p>So electricity, like water, is a blended cost where the scarcity unit is priced to cover the physical plant costs of delivering the unit. We wholesale adoption of Solar PV it will require power utilities to come up with a different formula to recover their costs. The end result is that it will shift the cost from business (who pay the biggest power bills during the day) to non-businesses.<p>[1] <a href="http://sanfrancisco.cbslocal.com/2011/04/19/east-bay-customers-could-face-water-rate-hike/" rel="nofollow">http://sanfrancisco.cbslocal.com/2011/04/19/east-bay-custome...</a>
The article doesn't focus much on spot pricing, which is really important in what is going to happen in the future. They showed a big drop in utility revenue during peak hours. This revenue used to be caused by high usage multiplied by really high prices. Now its high demand multiplied by moderate prices.<p>If solar adoption continues along the path described (which is inevitable at this point, considering steadily dropping solar PV equipment prices) then the midday spot price will continue to drop as well.<p>We'll find out some answers to the question, what do you do when the spot price of electricity approaches 0?
Water desalination.
Pump water uphill.
Charge electric car batteries.
Electrolysis to convert water to hydrogen, for later use in fuel cells or combustion engines.<p>We will certainly see some innovation in short term energy storage, since the price of electricity just before the late afternoon peak will be much lower.
>> The unspoken fear of all utility managers is the “Death Spiral Scenario”.<p>>> In this nightmare, a utility commits to build new equipment.<p>>> However, when electric rates are raised to pay for the new plant, the rate shock moves customers to cut their kWh use.<p>We have a "death spiral" in water prices in my local (southern California) water district.<p>There was a drought. People were asked to conserve. People conserved too much. Drought ended. Water use did not return. Water companies then need to raise prices to meet their distribution costs. Which lowers demand further.<p>It can only end ugly.
A shift in energy production is good news, so now we can use our coal generation capacity to desalinate water. We get new sunlight every day, but the fresh water that we have is all we have.