Our modern society and economy is fundamentally built on the use of fossil fuels. New Zealand’s goal of a low carbon energy transition is such a vast, momentous change that we need to rethink everything we know about harnessing and utilising energy.

Energy systems are a carefully-balanced rugby scrum between the supply side and the demand side. Much of the current focus is on future sources of renewable energy supply, but this must be combined with different ways of using energy – as that is where radical reinvention and the opportunity to change the game lies.

International and national research has given us, broadly speaking, the low-carbon energy game plan:

1) Increase energy efficiency

2) Move to 100 percent renewable electricity supply

3) Electrify heat and transport.

However, the devil lies in the details. On top of that, we must also ensure an affordable transition, as it will be the vulnerable members of our society who will suffer.

One of the problems we face with renewable electricity supply is its variability: solar power varies over the day and the seasons, wind is intermittent, and hydro depends on rainfall. Thus, supply from renewables often doesn’t match society’s patterns of demand, which tend to peak in the morning and evening, and be higher in winter.

It’s often suggested that in order to address this, we should overbuild supply capacity so we can always meet high demand, and simply curtail supply when demand is low. However, this means there’ll be a significant amount of under-utilised generation infrastructure, leading to unnecessary costs. In sports terms, think: expensive players sitting on benches.

Another option is to store the renewable supply for later use. Storing electricity generated from solar PV in batteries for use at night is a great option in, for example, Pacific Island countries, which have excellent solar resources that vary little over the seasons.

We could also change demand in real time in response to supply. The idea here is to have smart controllers on appliances and equipment that receive signals from the electricity grid to reduce or shift demand depending on the availability of supply – creating more of a synchronised dance  than a scrum. In many cases, this could be done in such a way that the consumer doesn’t even notice – like reducing a thermostat setting by one degree. Of course, we’re not able to do this yet – but it’s coming .

With these various flexible demand and storage options available to us soon, daily variability in supply and demand is essentially sorted. Longer periods of supply-demand mismatch, such as for weeks and seasons, are not so easy to manage. The longer that energy needs to be stored, the greater the required storage capacity, and the more expensive the infrastructure.

This is a serious problem for New Zealand, as we have significantly greater electricity demand in winter months. This winter peak in demand becomes quite critical in ‘dry’ years, when there’s less replenishment of the hydro dams.

There’s been a significant amount of discussion about this problem, with many options being proposed, such as: overbuilding of wind power capacity , turning Lake Onslow into a huge pumped hydro storage scheme, using hydrogen as a bridging fuel, and even giving up on achieving 100 percent renewable and relying on fossil fuels for the last few percent. In all this discussion, it is interesting that there’s been very little attention paid to what is actually causing the winter peak in demand, and how we might change it.

So, what causes this increased pressure on energy supply? Our analysis shows this peak in demand is almost completely determined by residential space heating. Given this, we set about researching options for reducing this winter demand by future improvements to the performance of our housing stock.  We considered a range of scenarios of energy-efficiency standards from Homestar to Passive House for new and retrofit buildings to 2050.

To provide a baseline for comparison, we assumed that under all scenarios new and retrofitted houses are heated to healthy temperatures.

The results show that rapid uptake of best-practice standards could reduce the winter peak by 75 per cent from business-as-usual by 2050. The reduction is so dramatic, that despite predicted growth in floor area and achieving healthy temperatures, the winter peak in 2050 is less than the current peak.

This work shows the role of highly energy-efficient dwellings in enabling 100 percent renewable electricity, through substantially reducing the problematic winter peak in demand. Essentially: the heaviest person on each team, who only occasionally get off the bench to face each other, are no longer needed in our new scrum.

Building to the proposed standards does come at an additional cost, but this is almost totally offset by lower heating costs. Retrofitting to the proposed standards, on the other hand, may be more difficult – there is currently a lack of understanding of the costs and direct economic benefits. However, it’s well known that due to the poor performance of New Zealand houses, they’re often chronically under heated, leading to major health issues for many in our communities.

Substantially improving the performance of our houses will lead to improved social and health outcomes and could also reduce the cost of New Zealand’s low-carbon energy transition.

By careful analysis of the demand-side, we reframed a particular low-carbon energy problem which then led to a potential solution with multiple co-benefits. Many other examples of this kind of demand-side innovation exist, and this is how the challenge of carbon-neutrality by 2050 needs to be approached.

Associate Professor Michael Jack is a senior lecturer in the Department of Physics and group leader of the Energy Physics Groups at the University of Otago.

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