Demand response

Businesses are savings a motza by signing renewable power purchase agreements (PPAs), but a new report says these savings could increase by up to another third by implementing demand response measures. 

The Best of Both Worlds: Renewable Energy and Load Flexibility for Australian Business Customers reportfrom the Institute for Sustainable Futures (ISF), Flow Power and WWF, uses a series of case studies to expose the benefits of demand management for large businesses.

While we recently heard that signing a renewable PPA could save a company between 10-50 per cent on electricity costs (see Businesses are locking in huge savings with renewable PPAs), the new report shows these savings can be taken even further, with the potential for large energy users to save hundreds of thousands of dollars a year.

Using data from three Flow Power customers from the water, agricultural and industrial manufacturing space, ISF found that demand response savings ranged from 2.3 per cent to 33.3 per cent, on top of savings gained from sourcing wholesale energy through renewable PPAs.

Demand response measures can include peak load management through the use of storage, time of use tariffs and electric to gas hot water; distributed generation, including solar, biomass and diesel; energy efficiency, including behaviour change and efficient equipment; and cogeneration, which combines all three.

The report said that aside from providing customers cost reductions, demand management could also push down prices for the whole market by meeting peak demand at a lower cost than providing additional generation and by avoiding or deferring network upgrades.

“Demand response has great potential to reduce costs for the electricity grid and for customers,” lead author of the report Jonathan Prendergast said.

Our analysis of on-the-ground data confirms that well-implemented demand response can achieve cost savings and manage risk for Australian business customers paying wholesale rates.”

Flow Power managing director Matthew van der Lindensaid demand response had a “pivotal” role in providing low-cost electricity to everyone.

“Where the financial savings delivered to customers on corporate renewable PPAs over the last year are just a small snapshot of [a] ten-year or more agreement, demand response gives businesses greater flexibility to control the prices that they pay.”

The report was welcomed by Victorian Renewable Energy Advocate and former ACT minister Simon Corbell, who said it was an important contribution to understanding how PPAs and demand response went “hand-in-hand”.

“This report unpacks these rapidly emerging trends through a focused and real-world analysis which can help the many businesses considering these issues better understand their options.”

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