Does demand response really mean warm beer and suffering poor?

Coal-loving commentators have erupted with fuming outrage and wildly inaccurate assertions about demand response following last week’s announcement of the successful projects for ARENA and the Australian Energy Market Operator’s demand response pilot.

The initiative aims to create 200MW of despatchable electricity capacity within three years to help manage peak events by working behind the meter to harness “negawatts”. The first tranche is expected to be available by this summer.

But the fossil fuellists don’t appear to get it.

There have been claims the government will be bribing low-income households to switch off all their electricity, inferences that shutting off the aircon will be mandatory and Andrew Bolt’s illogical premise that the $36 million dollar initiative amounts to “paying you to use less of the green power they forced you to pay more for”.

This line of argument hit Queensland Parliament last Tuesday too.

Liberal Nationals leader Tim Nicholls accused the government of consigning Queenslander’s to “crook prawns and warm beer” by asking people to set airconditioning at 26 degrees and turn off unnecessary appliances during extreme heat events to reduce strain on the grid.

He said the plan to manage peak demand was the result of the government’s “reckless” pursuit of a 50 per cent clean energy target.

Australians aren’t fooled

But the confusion about demand response seen in these kinds of comments is not shared by the majority of ordinary Australians, according to a survey by the Australia Institute.

The independent poll, commissioned by the federal government on behalf of the Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO), found that more than 64 per cent of Australians supported the idea of incentivising curbing their energy use.

Another aspect of the demand response pilot that appears to have escaped the commentators is the broad scope beyond household energy use.

Other projects part of the 200MW tranche of negawatt capacity include enabling owners of battery storage to shift discharge into the grid to match peak demand, for industrial users to switch to back-up generation, and for industrial users to have non-essential plant switched off or down.

There is United Energy’s plan to manage voltage better across substations and 660,000 customers’ sites; and one Adelaide-based industrial energy user, Intercast & Forge, that will create 10MW of capacity by using its own energy management systems to power down forges during peak events.

• Read ARENA’s full description of all the projects here

The poll was carried out in September, and involved 1421 respondents. It found that 80 per cent of people were keen to participate in demand response, 85 per cent were willing to adjust their thermostat by two degrees and less than a third believed building new power stations was a better way to meet peak demand.

New gas would be costly and slow

ARENA’s Phillip Cohn, speaking with The Fifth Estate about the project in the lead-up to All-Energy Australia, pointed out that building a new gas-fired power station to meet peak demand would not only be costly, it would take years to come online.

Such a power station would also have to achieve a return on investment, which would mean needing to charge extremely high prices for its output, as it would only be switched on for short periods in any given year

By contrast, the ARENA and AEMO demand response project has gone from a “standing start” in April this year to being ready to achieve functionality in time for summer.

There are also no new poles and wires involved, as the energy is already there in the combination of existing grid, battery storage and small-scale renewables on residential, commercial and industrial rooftops.

The cost is also a fraction of what it would cost to build a 200MW station.

ARENA chief executive Ivor Frischknecht said the polling was a very encouraging sign that demand response would be embraced by Australians consumers.

“Demand response makes better use of our existing poles, wires and generators, reducing costs for all energy consumers,” he said.

“This polling clearly indicates that Australians support the idea of managing demand during peaks in a smart, cost-effective way that avoids the need to build new infrastructure.

Mr Frischknect said the polling also suggested many Australians were happy to adjust their energy use slightly – such as turning down their cooling or heating, or switching off appliances not in use – to ease pressure on the grid if they can reduce their energy bills.

Guys, it’s voluntary

UNSW associate professor Alistair Sproul, deputy head of the School of Photovoltaic and Renewable Energy, told The Fifth Estate the crucial word was “voluntary”.

He said claims that people would be forced to switch off their airconditioning or even all power entirely were “wildly inaccurate”.

The nay-sayers needed to “look at what’s being proposed”.

The other thing to keep in mind, he said, was that even if people voluntarily opt in to participate, they can still choose not to reduce demand when asked.

“The issues [being raised] are non-issues.”

Renewables are the solution, not the problem

That includes claims made by the QLD opposition leader that renewable energy targets are the problem.

“The real situation is that if people have installed solar, they are offsetting their energy use – not drawing from the grid. They are helping the system manage peak demand.”

This is especially true on extremely hot sunny days, he said, as had been shown by AEMO in an analysis of a peak demand event in NSW last summer. Rooftop PV reduced energy use in the state by around 500MW, AEMO found.

There are also real benefits that do not pose a risk to wellbeing by increasing the thermostat on the airconditioning, Dr Sproul said.

For every one degree above 22 degrees, around 10 per cent less energy is used. So going from 22 degrees to 26 degrees reduces energy use by 40 per cent for airconditioning – one of the largest energy users in the average home.

Adding solar PV to a home and running the airconditioning during the day is also a smart solution. The peak demand comes when a large number of people come home to a hot house and turn on the aircon.

By switching it on in the morning, at a low setting and a higher set point, and reducing heat gain as much as possible, the resident comes home to a comfortably cool home, and will have less need to turn the aircon up.

Another easy win is switching off pool pumps during peak demand, or switching to a variable speed drive pump, he said.

“If everywhere around Australia we were to tackle pool pumps, we would have an extra one gigawatt of electricity,” Dr Sproul said.

“That’s another big power station we don’t need to build.”