demand response

The performance of a trial behavioural demand response program this summer shows that Australians are generally willing to turn up their airconditioners by a few degrees during heat waves if it means lower energy bills and a more stable the grid. 

Online energy retailer Powershop was one of three companies involved in ARENA and AEMO’s demand response trial that were able to react to peak demand heat wave events on two days this January (24 and 25).

The retailer was able to recover nearly 4MW of emergency reserve by encouraging 8000 customers to reduce their energy usage, according to ARENA.

The retailer’s Curb Your Power program involves sending text messages to participants in the lead up to a peak event asking them to make small tweaks to reduce their energy consumption.

Customers received $10 off their electricity bills for every peak event they managed to meet the energy reduction milestones specified in the initial notice.

Powershop chief commercial officer Michael Benveniste told The Fifth Estate in the two years that the trial has been running, the company has been “overwhelmed by how successful it has been.”

He says that quite a large proportion of the retailer’s customers have opted in to the trial – 10,000 in the first year and 13,000 the year after.

People are attracted to the notion of a financial incentive even though there are only a handful of days hot enough to trigger a peak event every year. When people are paying $1500 a year on electricity, Benveniste believes any saving is welcome.

But money is not the only reason consumers are participating in the trial.

“People are really engaged and want to do it – it shows that people are willing to band together to support the grid and community at large” Benveniste says.

Businesses can also participate in the program but depending on what kind of business it is, Benveniste says it can be more difficult to reduce usage.

The types of behavioural changes suggested include turning airconditioning temperatures up (where it is safe to do so and the elderly or vulnerable are not put at risk) or going to shopping centres to “share the load.” 

A report undertaken by ThinkPlace for ARENA and AEMO that investigated the performance of the three retailers targeting consumer behaviour – AGL, Powershop and Energy Australia – in the first year of the demand response pilot confirmed that the concept has potential.

The report found that overall people are willing to change their energy use in times of need. It also suggested a range of tweaks to their programs to improve effectiveness, such as better aligning reward systems to customer’s energy usage and social preferences. 

Benveniste says the retailer is trying some different messaging and rewards, such as a prize pool that would be announced at the end of summer.

Scaling up is key

Benveniste sees demand response programs of this nature as “another really valuable tool to help manage the grid and the market in general.”

“Demand response has its place in the market. It’s another lever in the toolkit to reduce costs overall.

Benveniste says that if the program could be scaled up and “replicated across the entire load”, the January blackouts could have been avoided.

Associate Professor from the School of Electrical Engineering and Telecommunications at the University of New South Wales, Iain MacGill, says that the residential side of demand response is considered a challenge because it involves “coordinating millions”.  

“Whereas with industrial you can get a significant response from 30.”

However, he says that research has found that “residential demand response is worth chasing” despite these limitations. 

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