Demand response trial to provide 200MW of emergency reserves

The Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO) have announced 10 pilot projects have been awarded funding under a demand response trial.

The $35.7 million initiative, launched in May and run as a competitive round, will see 200MW of capacity delivered during extreme peaks to prevent blackouts.

At least 143MW of that will be available for the upcoming summer.

During the next three years, the pilot projects will be trialled in Victoria, South Australia and New South Wales to free up temporary supply during extreme weather, such as prolonged summer heatwaves and unplanned outages.

AGL, United Energy, EnergyAustralia and Flow Power are among the 10 companies receiving funding for their projects.

AEMO managing director and chief executive officer Audrey Zibelman said the projects would undergo testing by AEMO in November and would be up and running by December.

“These demand response projects will help manage spikes in peak demand in a cost-effective way using our existing electricity infrastructure and clever new technology,” Ms Zibelman said.

“It is clear that demand response has untapped potential to manage demand during extreme peaks in Australia, just as it does in other countries.

“We’re hopeful this will create the proof of concept.”

Demand response is commonly used around the globe to avoid unplanned or involuntary outages, ease electricity price spikes and provide grid support services.

In other countries, up to 15 per cent of peak demand is met with demand response.

This program is the flagship initiative of ARENA and AEMO’s collaboration to test proof of concept projects to support grid security and stability.

ARENA chief executive Ivor Frischknecht said the funding round had well exceeded the 160MW initially hoped for, and cost less than expected.

“Through this initiative, we’ve been able to build a virtual power plant the size of two of Tesla’s giant 100MW batteries in a matter of months for a fraction of the cost of building new supply,” Mr Frischknecht said.

“We are also trialling an innovative range of technologies and behaviour change programs from voltage control to intelligent thermostats to app notifications.

“Demand response will not only ease the strain on the electricity grid and prevent blackouts.

“These projects will also put money back into the pockets of Australian businesses and households, helping to reduce their energy costs and emissions.”

The pilot projects will engage large-scale industrial and commercial businesses, such as cold storage facilities, manufacturing plants and commercial buildings.

Tens of thousands of households are also expected to voluntarily sign up to participate in exchange for incentives.

In the coming months, the pilot projects will be engaging customers and installing hardware to remotely monitor and control their energy usage.