As the southern hemisphere prepares for summer, three factors loom large: the ever-climbing cost of energy, the anticipation of extreme temperatures and spikes in energy demand. To ensure preparedness, owners and operators of commercial property are urged to take decisive steps toward ensuring operational and energy efficiency.
- The cost of energy remains upward trending and volatile
- Australia is set for a very hot summer
- Most of your energy is consumed in summer
The rising cost of energy
The global trajectory for energy prices remains undeniably upward. In Australia, the figures are alarming, with electricity prices soaring by over 215% since 2010, and worryingly, nearly doubling since 2020 (National Electricity Market). Experts from Cornwall Insight caution that this trend is far from its culmination, with predictions of these elevated prices continuing until at least 2026.
The global narrative offers a mirroring tale. For example, since 2010, electricity prices in the UK have swelled by 95%, and gas prices, even more concerning, by 130%. Highlighting the volatility, last August saw electricity and gas prices touching an astounding 764% and 560% increase compared to a decade prior, respectively (UK Office of Gas and Electricity Markets).
Anticipating high temperatures this summer
Reports and forecasts paint a vivid picture of the immediate climatic challenges ahead. Australia is bracing for a scorching summer, with the AEMO predicting a season hotter and drier than recent ones, “
This summer has more risk than the last few years. It is forecast to be hotter and drier. Electricity demand may be higher than observed in recent years. AEMO, industry, and governments are well underway with preparation to manage summer conditions, but reliability risks remain.” (AEMO)
This suggests a likely surge in electricity demand, while the anticipated rise in unplanned generator outages echoes potential energy concerns. Such extreme heat forecasts underline the importance of being prepared, both in terms of energy consumption and infrastructure readiness.
EnergyAustralia has cautioned that its 1,400 megawatt (MW) Mount Piper coal station may face disruptions in coal supply until the end of the year, owing to flooding at its primary supplier, the Springvale coal mine, according The Australian, “This threatens the stability of Australia's electrical grid as the country braces for a hot, dry summer.”
This follows the alarming findings within the the ‘2023 state of the climate report: Entering uncharted territory’, a global stocktake on climate reently published by the journal Bioscience that finds 20 of 35 identified planetary vital signs are at record extremes. Led by a group of 12 international scientists, the report asserts that 2023 will probably be the hottest in the past 100,000 years as global climate scientists warn global temperatures have soared to such an extent that Earth has entered “uncharted territory”. Per Figure 1, these record-breaking temperatures increase the likelihood that the world will reach 1.5C warming above the long-term temperature average as early as next year, meaning the world would fail to meet the central goal of the Paris Agreement.
“Unfortunately, time is up. We are seeing … an alarming and unprecedented succession of climate records are broken, causing profoundly distressing scenes of suffering to unfold,” write the scientists including co-author Dr Thomas Newsome from the University of Sydney.
Energy consumption rises with extreme temperatures
There's a clear U-shaped relationship between electricity demand and temperature, as illustrated in Figure 2. As temperatures either soar during scorching summers or plummet in chilly winters, electricity demand escalates. This observation, supported by a study from the International Monetary Fund, affirms, “At both low and high temperatures, electricity demand is high.”
For instance, CIM data from a Sydney office building last summer showcases how increasing temperatures directly influence a surge in energy consumption. See the clear correlation in Figure 3.
This is supported by data from other Australian sites that use the PEAK Platform, with more than a third of energy consumption used in the Summer months. As an example, data from a retail portfolio shows a clear peak in energy usage over the summer months, per Figure 4.
The Solution: CIM's AI-powered PEAK Platform
Amidst these imminent challenges, the need of the hour for property owners is to act swiftly. The answer might well lie in harnessing technology, specifically, CIM’s AI-powered analytics software. Designed meticulously to bolster energy efficiency, our software offers invaluable insights and actionable data, positioning you to adeptly navigate sweltering Australian summers, ensuring optimal energy consumption and efficiency.
In a world oscillating between volatile energy costs and impending extreme temperatures, now is the time for property owners to invest in solutions that not only curtail financial stress but also tread a path toward sustainability.