In what has been deemed the hottest June on record, the world finds itself grappling with an unprecedented heatwave that shows no signs of relenting in July. This soaring temperature is not only endangering millions of lives but also straining electricity grids to their limits as individuals turn to air conditioners to seek refuge from the scorching heat. Heat alerts have been spreading across the globe, warning of hazardous conditions for human health. From China, where temperatures reached an alarming 50°C, to Tokyo and the Southwestern United States, people are feeling the relentless heat. In Europe, the Cerberus heatwave, named after the mythological three-headed dog guarding the gates of Hell, has triggered wildfires, resulted in an increase in heat-related fatalities, and even caused mobile phones to malfunction.
The rising demand for air conditioning, fueled by record-breaking temperatures, has major ramifications for global energy systems. This escalating demand is causing electricity consumption to surge, leading to a vicious cycle of heightened greenhouse gas emissions that contribute to further global warming.
Moreover, with the ongoing global energy crisis, electricity prices remain high in many regions, adding a financial strain to individuals seeking relief from the heat. Inefficient air conditioners are leaving people paying double the amount needed to keep cool, exacerbating the economic burden.
There are viable solutions to address the surging energy consumption and rising consumer costs. One approach involves establishing more robust standards for air conditioning units to ensure greater energy efficiency. Additionally, grid operators are exploring new incentive programs. As policymakers worldwide race to make energy systems more sustainable, the urgency to address the consequences of rising cooling demand becomes paramount. The current critical time presents an opportunity to invest more in energy efficiency measures.
Extreme Heat Triggers Unprecedented Surge in Air Conditioner Sales and Strains Global Power Demand
Research reveals that extreme heat is driving higher air conditioner sales, with sustained average daily temperatures of 30°C boosting weekly sales by approximately 16%. The ongoing global heatwave has prompted a significant surge in online searches for air conditioners, with Google searches up by 25% worldwide compared to historical averages for this time of year over the past decade.
While the demand for cooling systems rises, it is most prominent in emerging and developing economies, where fewer households currently own air conditioners. In countries like the United States and Japan, where over 90% of households have air conditioners, the demand is already high. However, in Southeast Asia, only 15% of households own air conditioners, and this number drops significantly to 5% in India and Africa. Shockingly, only one in 10 of the 2.8 billion people residing in the hottest parts of the world have access to air conditioning or other cooling options in their homes.
As the reliance on air conditioners grows, it places a substantial strain on power systems worldwide. The International Energy Agency’s (IEA) recent Electricity Market Report highlights that the summer of 2023 will serve as another severe stress test for power grids. Cooling alone accounts for around 10% of global electricity demand. In countries with hotter climates, electricity demand can surge by over 50% during summer due to cooling needs. In the hottest regions, the grid’s capacity must cope with a doubling of electricity demand compared to milder months, with cooling accounting for more than 70% of electricity peak demand.
As temperatures continue to rise, the reliance on air conditioning escalates further. For instance, in Texas, every 1°C increase in the average daily temperature above 24°C results in a 4% rise in electricity demand. In India, where air conditioner ownership is lower, the same temperature increase leads to a 2% rise in demand. Over the last two months, power grids in India and the Southeastern United States, along with those in Brazil, China, Colombia, Japan, Malaysia, and Thailand, have witnessed record levels of peak demand.
The fluctuations in demand due to changing cooling needs pose a threat of potential shortages, restrictions, blackouts, and brownouts. In response to these spikes in demand, grid operators may need to activate older, inefficient, and more polluting power plants. For instance, in June, one power plant in China burned approximately 800 tonnes of coal within an hour to help meet the cooling demands and keep the residents of Shanghai cool.
Innovative Coping Mechanisms amid Strain Essential
As power grids face mounting pressure during increasingly hotter periods, operators are turning to new strategies to alleviate the strains and ensure stability. The adoption of innovative demand response methods is becoming essential, allowing appliances and cooling equipment to adjust their energy consumption in real time, thereby helping balance the grid during peak demand while offering energy cost savings to consumers.
This revolutionary “demand response” approach involves consumers voluntarily reducing their electricity usage during emergencies, or being incentivized to provide this service to the grid for compensation.
An illustrative example is Texas, where the grid operator was met with an all-time high in electricity demand during June. To manage the grid stress efficiently, the operator substantially utilized its demand response and energy flexibility programs. These programs enticed energy consumers with financial incentives to decrease demand during peak periods or shift their consumption to hours when grid pressures and power prices are comparatively lower. This year, demand response payments have seen a remarkable surge, rewarding active participants in the program with incentives up to 20 times higher than before.
In Korea, a pioneering pilot program was launched in December 2022, where intelligent appliances autonomously respond to grid conditions and demand reduction requests, eliminating the reliance on consumers’ manual adjustments to controls. The outcome has been impressive, with a noteworthy 24% improvement in electricity savings.
Better information for consumers can pave the way for reduced bills and increased energy efficiency. consumer choices have a significant impact. The latest market data reveal that the typical air conditioner sold globally is less than half as efficient as the highest-performing product available in the market. This holds true for all regions across the world. However, consumers have the power to make a difference by opting for more efficient models, and surprisingly, it doesn’t always come with a higher price tag.
A case in point is Thailand, where consumers with a budget of USD 350 have the choice between purchasing a low-efficiency unit or investing in a model that boasts 50% higher efficiency for the same price. By choosing the more efficient option, consumers could potentially slash their electricity bills by almost half, leading to savings of up to USD 2000 over the lifetime of the unit. This trend is not limited to Thailand alone; market data indicates a similar pattern in most countries worldwide.
