Price spikes in the wholesale energy market typically last from 30 minutes up to 3 hours, and are caused by lots of demand for power combined with a lack of renewable supply. This high demand is met by expensive and dirty coal and gas power, temporarily driving up the wholesale market price of energy.
To minimise your costs during a spike you'll need to shift intensive activities earlier or later during the day to avoid the spike.
The top 3 energy intensive activities are:
- Running the air conditioner or heater (air-conditioners and heaters are the #1 most power-hungry appliance in most homes!)
- Cooking with an electric stove top or running the oven
- Washing (washing machine or dishwasher)
If you can avoid just these 3 activities then you'll make a big difference to your bill.
You might also be surprised to learn that you can continue using your lights and entertainment devices (TV, computers, stereo speakers, gaming consoles) and use fans to keep cool during a price spike at minimal cost, since these devices use relatively little power.
If you're keen to know more, we've put together this detailed guide on how much your home appliances could cost to run during a price spike.
In addition to helping you save, avoiding price spikes helps get Australia off fossil fuels, faster. That's because the big fossil fuel generators make a large share of their annual profits from people who use power during price spikes.
What to do during a price spike
Price spikes typically happen during the evening in very hot or cold weather when lots of people are cooking dinner and running cooling/heating at the same time, putting strain on the grid.
At these times, coal and gas generators can charge up to 100x normal prices for their power.
On days when a price spike is forecast, you'll need to zig when others are zagging. Shifting your use of high-powered activities earlier or later in the day will make a big difference to your energy costs on price spike days and massively help out the grid... and the planet!
In fact, if every Aussie household was like yours, and reduced their usage during price spikes, it would help get Australia to 100% renewables much faster.
There are three big things you can do to lower your energy costs during a price spike that lasts a couple of hours (these occur only a few times a year):
- Pre-cool or pre-heat your home. Cool or heat your home during the afternoon when there's still plenty of cheap renewables in the grid, then limit your electric cooling or heating usage when the price spike starts if you can. It’s fine to still use fans to keep cool as they don’t use much power. If it's cold, get out the winter woollies. This can save you up to $100.
- Cook dinner earlier or later than normal (if your cooking appliances are electric). Alternatively, you can treat the house to take-away or a restaurant meal with the savings you've made by reducing your usage during the spike. Avoiding cooking during a price spike can save you up to $50.
- Shift your usage of other power-hungry appliances. Try to run power-hungry appliances like washing machines and dishwashers before or after the spike. This can save you up to $40.
(Some of our customers have told us they prefer skip the spike completely by going out to dinner, to the movies, to a shopping centre, or to the beach if it's hot!)
You don't need to sit in the dark
There are many devices that you can continue using normally even when the wholesale price is spiking. Because they use much less power than your large appliances they'll still be relatively cheap to run:
- Run fans to keep cool
- Continue with normal use of your lights
- Use electronic devices, such as your TV or laptop
- Continue running “always on” devices, such as your fridge
Can I still save if I need to put dinner on the table during a price spike?
Price spikes typically happen at times when many people would normally be preparing dinner. While shifting your usage of electric cooking appliances earlier or later is the most effective way to avoid paying higher prices, it's not always possible. Here are some strategies that our customers have used in the past to reduce their usage while getting dinner on the table during a price spike:
- Make something quick and simple using a single burner, or your microwave. Remember that the price you see in the app is what you'd pay to run a 1kWh (or 1,000 watt) appliance for 60 minutes straight. You can dramatically cut down what you'll pay by running high powered appliances for just a few minutes rather than extended periods of time. For example, running a 1.5kWh burner while you pan-fry ingredients for 10 minutes will cost ~$4.25 during a major price spike ($17.00/kWh). Running a microwave to reheat leftovers will typically cost around 95c, while heating up a pre-prepared frozen meal will cost ~$3.80.
- Avoid using your electric oven or multiple electric burners at once. Electric ovens are among the most high-powered appliances in most homes and can be very expensive to run during a price spike (for example, running a 2.4kWh oven for 30 minutes can cost ~$22.00 during a spike.) Similarly, the costs add up when you use multiple stovetop burners at the same time.
- Get take-away or go out to dinner. Some customers will skip making dinner at home completely during a price spike and get take-away or go out to a restaurant to eat instead.