Amber Electric: The year when the promise of smart grid begins to be realized at scale

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pv magazine Australia: Amber Electric has recently landed a grant under the SA Government’s Demand Management Trials Program to deliver a trial with 1000 customers with the help of 400 pool pumps, 400 hot water systems and 200 batteries. How does this scheme work and what savings are expected for the customers?

Dan Adams: As part of the Amber Automated Demand Response Project funded by an $800,000 grant awarded by the SA Department of Energy and Mining for the Demand Management Trials Project, we are inviting South Australian customers to participate in the trial to save money and support the integration of renewable energy into the grid.  

Those who are keen to participate in this will need to have either an electric hot water system, a pool pump or a household battery. Amber Electric will provide smart devices and software to the first 800 participants in the trial for free to optimise existing hot water systems and pool pumps. Customers can then save money by using power at cheaper times while improving the reliability of the grid by automatically shifting demand away from peak times. 

Over the course of 12 months, on top of the savings customers already make by switching to Amber Electric, customers can unlock an additional $150-$300 on average through the year just by automating the times of the day when the smart devices use power to times when cheap renewables are available.  

Amber’s business model is unique for passing wholesale electricity prices directly to consumers for a flat monthly fee of $10, no lock-in contracts and no exit fees. With prices on the downward trajectory, mainly due to the influx of renewables on the grid, what will Amber’s solar (and storage) customers experience in the coming year and beyond?

Wholesale electricity prices are expected to fall materially over the next three years. Because Amber passes through the wholesale price of electricity directly in real time, our customer will immediately benefit from these falling prices. The wholesale price is forecast to reduce the most in the middle of the day when more solar power will be available. This will improve the economics of household batteries or using smart devices to shift energy usage to the middle of the day. 

What are your predictions for Australia’s energy market for 2020? Where do you see the residential solar and home battery markets heading?

We expect the cost of solar, household batteries and EVs will continue to fall. 2020 will be the year where the promise of household batteries, EVs and other smart devices being orchestrated to create value in the energy market will begin to be realised at scale. 

This is being driven by the accelerating uptake of these technologies combined with new business models like virtual power plants and Amber’s wholesale pricing model which give customers the opportunity to unlock the full value of these devices. 

Do you expect to see further growth of demand response in the NEM? That said, what are the main barriers you’ve encountered?

Yes, we do anticipate further growth. Demand management is an important piece of the energy puzzle and its benefits are clear — we get a more reliable grid which will result in fewer blackouts, more renewables being utilised and lower energy bills. 

The release of the recent NSW Electricity Strategy highlighted the benefits of the demand response in the NEM, and we’ve seen increased government support for this. The SA, NSW and Victorian governments have all implemented some form of demand management scheme. Our recent Demand Management Trial grant – funded by the SA government – is another great example of support given.  

Until recently, demand response was only occurring at the commercial and industrial level to reduce peak demand a few times a year when the grid was under extreme stress. The digitisation of energy with more smart devices entering the home is enabling automated demand flexibility to occur on a daily basis at the household level. This gives Aussies the power to take ownership of their energy use and as a result, experience bill savings by automatically using power when wholesale prices are cheaper.  

We believe this two-sided electricity market is the most efficient way to bring down costs and integrate more renewables into the grid. The uptake of demand flexibility is however being limited by the traditional fixed price retail electricity model, which doesn’t give customers any incentive to use power when wholesale prices are cheaper because they always pay the same fixed price for energy.  

This was a big year for Amber as it raised $2.5 million in seed funding and unveiled plans to grow its customer base and expand across the eastern coast. What does 2020 have in store?

At Amber Electric, we want to help customers take a smarter approach to their energy use, helping Aussies further drive down energy bills in a way that also shifts energy use towards the renewables. 

Currently through Amber Electric’s app, customers can already see what the wholesale electricity prices are at that moment, and forecasts for the next 12 hours. The app also offers customers information on their energy consumption and warnings when wholesale prices may spike so they can shift their usage.  

Come 2020, we’ll be launching across all east coast states, releasing a new version of the Amber Electric app with additional functionality and expanding our offerings to provide additional services such as optimising household batteries, electric vehicle chargers and other smart devices to run when wholesale prices are at their lowest. This will help customers increase their savings without any additional effort.