This “curtailment” is carried out to maintain grid stability by preventing an oversupply of electricity at a time when there is simply not enough demand for it.

Analysis of NEM data suggests that annual forced curtailment for 2023-24 was around 4,000 gigawatt-hours (GWh). This represents around 9.3% of Australia’s total annual wind and utility solar generation.

A possible source of flexible demand for this generation is residential off-peak hot water. Off-peak systems account for around 30% of Australian household hot water systems. They are designed to use power overnight, a period when electricity demand has historically been lowest, but during which coal-fired generators have kept producing electricity regardless.

Today, off-peak times could be redefined, and off-peak systems reorganised to consume renewable electricity during the middle of the day, when there is an abundant supply of renewable electricity. Research by the Institute for Sustainable Futures at the University of Technology Sydney estimates that switching off-peak hot water to the middle of the day could have provided around 4,000 GWh of flexible demand in 2020—coincidentally, almost the exact level of renewable curtailment in 2023–24.

Off-peak electric hot water systems were an innovative solution to the changing circumstances in the rapidly evolving state-based electricity networks in Australia from the 1950s onwards. While the problems faced by the electricity system of the 2020s are different to those faced in the 1950s, off-peak hot water systems could again play an important role in addressing those problems.

Just as large commercial buildings have the potential to shift a significant amount of the electricity they use for heating and cooling to times of day when there is an abundance of renewable energy, off-peak hot water systems also represent a significant opportunity to shift household electricity demand. If off-peak hours were moved away from the time of day dominated by coal-fired electricity and towards the time of day when the sun is shining brightest, curtailment of solar power supply could be reduced significantly.