Australia has just sweltered through the hottest summer on record, putting extreme pressure on the grid and resulting in blackouts in late January. But thanks to emerging demand response strategies and the participation of a bunch of industrial, commercial and individual energy users prepared to put the brakes on their consumption, more significant reductions were avoided for critical users such as households and aged care facilities.
Demand response for consumers and businesses involves providing incentives for them to adjust their energy use to adapt to changes in the energy system. This so called “negawatts”, or no wattage use, can be generated in a number of ways. Consumers can simply reduce consumption, they can switch to back up generators or they can dispatch stored energy into the grid for agreed periods.
These methods are now starting to have an impact on energy consumption patterns.
Associate Professor from the School of Electrical Engineering and Telecommunications at the University of New South Wales, Iain MacGill, told The Fifth Estate that the role demand response has to play in managing Australia’s energy loads “is not insignificant.”
However, “we’re still nowhere near the potential that we could be”, he says, particularly when compared to some other countries.
Demand response is a relatively low-cost way of improving the affordability and stability of Australia’s electricity system when compared to building more generation capacity. It’s also key to stimulating more renewables.
ARENA industry engagement manager Kiya Taylor says it’s a “critical enabler of more renewables entering the grid”. “It helps to increase the flexibility required to manage a grid where there is more variable energy sources.”
The rise of the “smart grid” and the digitalisation of the power system is also driving interest in demand response strategies and load management in general.
Government backed demand response projects show promise
ARENA and AEMO launched a demand response trial in late 2017, with the intention of having the pilot projects up and running in time for last summer.
Around $35.7 million of innovative projects run by tech firms, renewable storage firms and energy retailers involved commercial, industrial and residential energy users. The three-year pilot is expected to deliver 200 megawatts of dispatchable energy capacity by 2020.
Three participants based in Victoria – EnelX, United Energy and Powershop – had the opportunity to react to peak demand heat wave events on two days this January (24 and 25), at a time when demand could not be met by existing supply.
The way aggregators work is to contract with large businesses to voluntarily rein in their load when the wholesale price is high, saving the company money on its energy bill.
According to ARENA, EnelX (previously EnerNOC) activated its commercial and industrial portfolio clients in the late January heatwave to reduce demand, which provided an average of 30MW back to the grid.
Wastewater treatment plants, cold storage facilities, flour mills, fruit processing and packaging sites, technical colleges and shopping centres were among the 50 sites that altered their energy consumption over the two days.
“There was a real sense of customer ownership and willingness to help out on both days – both to contribute to stabilising the grid and to help keep the power on for other consumers, such as households and aged care facilities, who really need the energy supply,” EnelX program manager Rando Yam said.
Victorian distributor United Energy provided more than the 30 MW of contracted capacity by slightly reducing the voltage at substations across its network for a short and controlled period of time.
On one incident on 25 January, the distributer was also instructed by AEMO to load shed during the January peak events. But on the 24 January event, ARENA said that “the demand response was enough to completely avoid the need for AEMO to load shed.”
Although a smaller amount of energy was saved, online energy retailer Powershop was able to claw back nearly 4MW of emergency reserve by encouraging 8000 customers to reduce their energy usage.
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 changes in their behaviour, such as turning up airconditioners by a few degrees.
The Fifth Estate contacted ARENA for further information on the performance of the pilot projects but did not receive a response before publication.
Innovation in demand response is key
Overall, UNSW’s Associate Professor Iain MacGill says ARENA/AEMO’s trial program is a much-needed step in the right direction to support innovation and experimentation in the space.
MacGill says the aggregators such as EnelX have been “remarkably effective” in the ancillary services market, where they have been allowed to participate for some time. Aggregators are presently calling for changes to the rules so that they can also participate in the wholesale market.
According to MacGill aggregated demand response is particularly useful in peak events because it’s fast – “you can turn the switch on and off quickly”.
Some of the other emerging innovations include virtual powerplants and smart technologies that can remotely control loads, which can allow energy utilities to turn off non-critical appliances such as pool pumps during peak events.