WITH the Natural Resources, Environment and Climate Change Minister, Nik Nazmi Nik Ahmad reaffirming the government’s commitment to targeted energy subsidies in his recent announcement on reducing electricity subsidies for households with excessive power usage, it is crucial to explore holistic solutions to improve our electricity demand side management.
This is especially relevant considering the unexpected surge in electricity demand caused by the recent heatwave that has strained the power systems, which became so critical that the Sabah state authorities had to implement electricity rationing in several districts to prevent significant electricity supply disruption.
Without holistic strategies to manage the growing electricity demand, these disruptive events will only exacerbate as extreme weather worsens with climate change.
A refreshed view of electricity demand-side management is also critical to future-proof our power systems as we further decarbonise them.
Effective demand-side management can cost-effectively reduce the investment needed to deploy excess power generation capacity and system balancing facilities.
To this end, while electricity demand will increase with a growing population, improved standards of living and greater energy service demand electrification, various demand-side strategies can be implemented to improve power system resilience.
Reducing demand for energy services
To achieve a notable reduction in energy service demand per person, it is necessary to foster a cultural shift.
This can be accomplished by encouraging long-term behavioural changes through continuous nudging and altering the decision-making environment.
Efforts can be directed towards empowering corporations to drive meaningful behavioural changes and enable wider cultural shifts.
For instance, corporate policies that encourage remote work can reduce transport energy service demand.
Additionally, encouraging the monitoring of individual emissions can raise awareness and motivate individuals to take action to mitigate their impact on climate change.
Nevertheless, a meaningful impact of such initiatives would require well-informed individuals who understand the significance of their behavioural change in sending market and policy signals to drive wider decarbonisation efforts.
Therefore, response and engagement from corporations and the public sector are crucial in empowering individuals to shift towards a more sustainable lifestyle.
Improving energy efficiency
Two main approaches to achieving holistic energy efficiency improvements involve reducing energy consumption for each service demand and transforming the ways energy services are enjoyed through more sustainable and efficient means.
While some past policies have successfully reduced energy wastage in the country, new perspectives are needed to enable larger-scale long-term energy efficiency improvements, particularly in the building sector, which account for nearly half of the national electricity consumption and is expected to grow with continuous urbanisation.
Building energy efficiency improvements can lead to long-term cost savings for occupants while reducing power system investments in improving energy infrastructure in densely populated areas.
One effective method to stimulate demand for building energy efficiency improvements is by adopting a variant of the mandatory Energy Efficiency Obligation Scheme (EEOS).
Under this scheme, a third party is mandated to enhance consumer energy efficiency in exchange for a share of the electricity bill savings achieved through efficiency improvements.
This approach can enhance power system resilience without requiring significant public funding and also generate economic opportunities in the building retrofit sector.
To make such projects bankable, a large portfolio of building retrofits is needed to kickstart the ecosystem.
The government can take the lead by implementing a mandatory EEOS on its building fleets such as government agency offices, hospitals and schools, through a transparent auction process.
Ultimately, this can lay the groundwork for the private sector buildings to follow suit.
In addition, to conventional energy efficiency improvements, more efforts can be directed towards enabling behavioural change that reduces the energy consumption per service demand, such as encouraging greater utilisation of public transport.
The quality and public perception of these services, like the accessibility, frequency and comfort of public transport, need to be addressed and effectively communicated to the public to enable the shift towards a more sustainable culture.
Furthermore, an overarching framework to instil a sustainability mindset in individuals and corporations is needed to drive greater impact in these improvements.
Thus, cross-collaboration of government agencies is needed to develop a holistic approach to promoting sustainability and recognising the economic and environmental benefits of such actions.
Strategic design of electricity consumption profile for a highly decarbonised power system
As we further decarbonise the power system by expanding on-site solar power generation and increasing the electrification of energy services such as transport, it is important to recognise that the variability of grid electricity demand will significantly increase if left unmitigated.
For instance, if most electric vehicles are charged at home during hours when residential solar generation is limited, the daily variation of grid electricity demand can increase, leading to instability in the local power system.
To address this, strategic planning with deliberate efforts to shape the future electricity demand pattern is needed to reduce investment in energy system balancing services such as large-scale energy storage and network reinforcements.
To enable effective load shifting of future transport sector electricity demand from the evening peak demand hours to the afternoon period with high renewable generation and lower demand, the government should encourage greater deployment of public charging infrastructure compared with the home charging counterpart.
This long-term planning would allow gradual behavioural shaping for the bulk of electric vehicle charging to take place in offices and malls in the afternoon hours when on-site renewable power generation is high.
Additionally, the wider adoption of time-of-use tariffs can be considered to encourage consumers in shifting their energy consumption patterns, reducing the power system stress in hours of high imbalance risks.
Nevertheless, greater digitisation and realisation of the full potential of a smart power grid would be important in launching such strategies and bringing meaningful impact to improving long-term power system resilience.
In conclusion, it is time to look beyond simply developing additional power generation assets to promote energy security.
The national demand-side management strategies need to be revisited using a holistic approach that considers comprehensive long-term infrastructure planning, gradual behavioural shift and innovative approach to finance new energy efficiency projects.
Evan Ng Chee Yang is an energy market consultant focusing on power and low-carbon solutions at a leading consulting firm in London and holds an MSc in Energy Systems from the University of Oxford. Comments: letters@thesundaily.com
