EnergyAustralia, one of the country’s leading energy retailers, today said it would deliver around 50 megawatts (MW) of "demand response" reserve capacity across New South Wales, Victoria and South Australia as part of a pilot program.
It’s the largest single commitment in a three-year demand response trial by the Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO). The program aims to secure 160 MW of capacity which can be called upon at short notice should availability in the national electricity market fall to critical levels.
EnergyAustralia has been awarded up to $9.8 million by ARENA to support a range of initiatives from basic notifications to customers to reduce their energy demand through to high-tech monitoring devices, battery storage and converting some industrial processes to run on biofuel.
"Australia is making a generational transition from large, centralised generation based on coal to a new, modern energy system underpinned by a cost-effective mix of technologies," said EnergyAustralia Managing Director Catherine Tanna.
"Building new, cleaner generation capacity is just one side of the equation; demand response – reducing strain on the system at peak times – is the other. Demand response has a critical role to play in maintaining system reliability and security while supporting the integration of new supplies of renewable energy.
"It’s an approach that puts customers in control and keeps costs down, because the cheapest generation is the generation you don’t have to build," Ms Tanna said.
EnergyAustralia will build systems to aggregate the distributed energy resources and plans to have secured around 40 MW of demand response capacity in time for this coming summer.
It will have the full amount – 50 MW – ready for AEMO to call upon in times of need by the end of 2018.
Customers participating in the program agree, if requested by the market operator and EnergyAustralia, to moderate their energy consumption for short periods.
Freeing up this capacity provides a reserve available at short notice to offset extreme demand or emergencies, easing the strain on the electricity system and avoiding involuntary load shedding.
For example, a particularly high-demand summer day might trigger an agreement for a business to reduce its load by running its equipment less. Or it might mean tapping into the solar energy stored – but not being used – on a customer’s rooftop.
Customers typically receive a financial incentive in exchange for reducing their demand or making excess energy available.
"Today customers are no longer just looking for help with the energy they consume but also with the energy they produce. Demand management opens the possibility of deep and strong partnerships with customers," Ms Tanna said.