More than $12bn to be spent on Australian air-con energy bills in 2023
Australian citizens and businesses could spend more money on AC energy bills than ever before this summer, due to rising energy costs, extreme weather events, the shift to remote working, and “dinosaur” air-conditioning units. We estimate that power bills for air conditioning will be over $12.4 billion in 2023, given recent energy price rises. This figure is up significantly (+$2.5 billion) since 2020.
See below for an overview of why air-con energy costs are rising, as well as advice for how Australian households and businesses can use less energy to stay cool this year.
In 2020, air-conditioning units consumed 36,750,000mwh in Australia. This number has consistently risen over time according to the data source, ‘Cold Hard Facts’ (up from 30,000,000mwh in 2016)[1]. Conry Tech estimates that AC energy use in 2023 will be ~40,000,000mwh
Air conditioning consumes almost 15% of the total power generated in Australia
Meanwhile, wholesale energy costs rose sharply this year. According to the Australian Energy Regulator, the average $ per megawatt hour in Australia now ranges from $210 (Victoria and Tasmania) to $257 (South Australia), up from $45-$65 in 2020[2]. Household energy costs in Australia are currently $0.319 per kwh[3]($319 per mwh)
In a conservative scenario, the total wholesale AC energy bill will reach $8bn this year. For households and businesses, this figure would be over $12.4bn
With more people now using AC to cool their homes, more people working from home, and more extreme weather events, it is possible that this number could increase further
On average, the energy consumed by heating and cooling in a commercial building accounts for 60% of its total energy use
Most commercial AC units are designed to be at their most efficient on the hottest days and in the worse-case scenarios (eg. in direct sunlight, busy office spaces, with lots of lighting/electronics). This means that they run as designed on the hottest day of the year, but often inefficiently for the remaining 364
Sam Ringwaldt, Conry Tech
“Air-conditioning is simultaneously everywhere and nowhere. It is all around us, in virtually every building in Australia, yet we never read about it, talk about it, think about it, or begin to question it, unless it’s not working.
“This year may be a tipping point, however. Australians could spend more money on AC energy bills than ever before this summer, and there are several reasons why it will be at the forefront of their minds. Energy prices have spiked, more people are working from home, and El Niño is set to return in 2023. Our AC units will be on constantly, and costing us more than ever.
“It’s a useful moment to remind us of what we already know, aircon is bad for the planet. The energy use of air-conditioning units worldwide is astronomical. It has made architects, developers, and city planners lazy. They can build anything anywhere, regardless of the building design, use and environment, because they know that the miracle of aircon will make their buildings comfortable. As consumers adopt electric vehicles and manufacturers embrace the circular economy and sustainable best practice, the built environment still lags a long way behind.
“As we head into the peak air-con months in Australia, we cannot ignore the aircon issue and continue accepting the status quo of an industry that has barely changed in 100 years. Many homes and office spaces are using AC units that are veritable dinosaurs that use more energy than they need, cost more than they should and only perform efficiently on the hottest day of the year.
“If we created aircon today with a blank sheet of paper, we would surely do it differently and do it better. The world is getting better at ripping up and replacing old and outdated ways of doing things. As nations transition from fossil fuels to renewables, and people swap their petrol cars for EVs, surely the days of bad aircon are numbered.
Alison Scotland, ABSEC Executive Director (Australian Sustainable Built Environment Council)
“The impacts of climate change mean that we all need to adapt and evolve to a zero emissions agenda. As Australia transitions to a renewable energy grid, electrifying our buildings will be the fastest and cheapest pathway to reducing emissions. Installing an efficient air conditioner plays its part in electrifying your home or business, but improving the energy performance of your building is an essential first step. Energy efficient buildings require less energy to cool in summer and heat in winter, meaning that you need to use less energy in the first place.
“ASBEC wants all Australians to have healthy and comfortable homes, offices and buildings that use less energy and support Australia’s achievement of net zero emissions. Using less energy means lower energy bills, and having an energy efficient air conditioner that is operating optimally certainly helps make this happen.”
Tips for staying cool while being energy efficient
Don’t touch the thermostat – in a typical workplace environment, the vast majority of people are most comfortable between 21-23°C. Traditional air-conditioning units can use a lot more energy if they are instructed to change the temperature of a room regularly vs maintaining a comfortable temperature, so don’t touch the dial
Reduce spin speed – if using a fan to cool an area, consider using a lower spin setting. Typically, the highest speed setting on a fan will use a disproportionately large amount of energy compared to a medium setting. This is due to the Affinity Laws.
Check thermostat location – Be aware that a thermostat might not read the room temperature correctly if it is in direct sunlight or near heat radiating equipment such as refrigerators
For every degree that a thermostat is raised or lowered, it can increase heating or cooling bills by about 5%. To save energy costs, consider setting a thermostat between 24-26°C for cooling, or 18-20°C for heating.
Poorly maintained HVAC equipment can increase its energy consumption by up to 30%. On your home split systems, lift the front cover, and wash the dust out of the filters under a tap. Let them dry then put them back in. You don’t need to be very handy to do this.
Think of heat sources – people, electronics, direct sunlight and artificial lighting all generate heat. Think of how to optimise your space, maximise the use of daylight and get as much of your heating, cooling and ventilation as possible from natural sources
Turning down the thermostat as low as it can go doesn’t speed up the cooling of your premises. Turning it up very high won’t heat it faster either. Taking this approach will increase your bills as you will be overcooling or overheating your premises, just set it and forget it. – Be patient.
Every extra star on an air conditioner can reduce your running costs by up to 10%.
Keep doors, windows and vents closed when your refrigerated air-conditioning is on. Having them open makes your air conditioning system work much harder.
Data accurate as of 23rd January 2023
[1] https://www.dcceew.gov.au/sites/default/files/documents/cold-hard-facts-2021.pdf
[2] https://www.aer.gov.au/wholesale-markets/wholesale-statistics/annual-volume-weighted-average-30-minute-prices-regions
[3] https://www.globalpetrolprices.com/Australia/electricity_prices/