DR Valuation and Experiences with Demand Response Programs in Australia

1
DR Valuation and Experiences with Demand Response
Programs in Australia

• Mini-symposium
• 16th June 2006
• Amsterdam, Netherlands

2
Australias Energy Market

• Second lowest power cost in OECD, based on large
  scale coal fired power stations
• 20 Million population, 14 million customers
• eg NSW over 6 million, well over 4 million
  living within 200km of Sydney, rest of the state
  sparsely populated (more than half state has lt2
  people/km2)
• 50b per year in consumption
• One national electricity market on the east
  coast, covering mainland states and Tasmania
  (through Basslink), Western Australia Northern
  Territory has separate systems due to physical
  distance
• Electricity industry privatised in Victoria
  South Australia, corporatised in NSW and
  government owned in other states/territories

3
Australias Energy Market

• Demand in all but Tasmania is dominated by summer
  peak caused by air conditioning
• Average Summer weather demand (50 probability of
  exceedence) for 2005/06 Summer (projected)
• New South Wales 13,102 MW
• Queensland 8,702 MW
• Victoria 9,260 MW
• South Australia 3,091 MW
• Tasmania 1,346 MW
• TOTAL NEM 35,519 MW
• Tasmania has a winter peak rather than a summer
  peak

4
Australian Team

• Members for energy companies, State and Federal
  Government agencies involved in electricity and
  greenhouse/sustainability policy
• Objectives for the AU Team
• Collate a catalogue of DRR products and programs
  in AU
• State-by-State assessment of DRR potential
• Inform the policy debate which is occurring at
  State and Federal level

5
Australian Team

• Benefits to Australia from joining Task XIII
• Obtain latest information on DRR products,
  programs and technologies from overseas
• Assess potential impact of options on Australian
  market using tools/benchmark information
• Understand how DRR could make a contribution to
  rational decision making in the Australian
  electricity market from a long term resource
  planning perspective
• Ensure policy makers, who include Team members,
  are fully informed of options and potential
  impacts

6
DR in Australia

• Valuation
• Done as part of NEMMCO annual forecast NEM
  participants or end-use customers can nominate
  Demand Side Participation (DSP) quantities during
  high spot price periods
• Very low levels reported
• Summer Peak (MW) DSP (MW)
• New South Wales 13,102 10 0.08
• Queensland 8,702 100 1.1
• Victoria/South Aust 12,351 191 1.5
• TOTAL NEM 35,519 301 0.8
• Data taken from NEMMCO 2005 Energy and Demand
  Projections, Jul05 Summary Report from
  www.nemmco.com.au

7
DR in Australia

• Valuation
• Problem with current system
• Price spikes are covered by average contract
  price ? can make up 30 of the total price ? No
  real incentive for retailers to investigate
  DSM/DRR
• Concentrated market/games being played by
  generators Australian Competition and Consumer
  Commission has found some evidence of gaming the
  markets
• Excessive and short-term volatility makes DSM
  difficult

8
DR in Australia

• Valuation
• State Government agencies have looked at
  valuation enabling DRR
• Federal Government, through Council of Australian
  Governments (COAG), is interested in reforming
  NEM to enable DRR
• AU Team are undertaking a modelling exercise to
  determine potential contribution of DRR overall
• ? Better inform policy debate

9
DR in Australia

• Programs
• Long history of DLC of domestic water heaters
  with offpeak tariffs
• Some seasonal tariffs, depending on location and
  market segment eg Tasmania have winter tariff
• Some arrangements with industrial customers, but
  site specific and details confidential
• Recent past (ie last 5-10 years)
• Increasing number of trial programs (electricity
  companies)
• Increasing levels of government interest
  intervention

10
DR in Australia

• Programs Electricity Companies
• Integral Energy (NSW)
• 800,000 customers over 24,500 km2 is NSW
  including fast growing/ new residential areas eg
  Kellyville 19MVA in 1996, 35MVA in 2004
• Over 1.2billion in revenue, assets gt2B
• Large customer incentives
• TOU pricing/ EG/ load curtailment agreements
• Audits as part of RFP process, assistance with
  PFC
• Small customer incentives
• TOU (low uptake), trialling AM CPP, DLC for off
  peak hot water
• Trials cycling aircon, ice-storage aircon,
  pool-pump
• Lots of information on trials publicly available

11
DR in Australia

• Programs Electricity Companies
• Country Energy Home Energy Efficiency Trial
• 800,000 customers in 5 State/Territories, manage
  largest area of any retailer in Australia
• CPP trial in residential setting to better
  understand consumer response
• 150 customers, 18 month trial starting in Dec04
• Inhouse access to real time information with Ampy
  Email meter
• Minimum 2 hours notice of CPP event (2 hours) up
  to 12 times per year
• Mainly positive results so far consumers
  shifted demand, greater awareness of energy use

12
DR in Australia

• Programs Electricity Companies
• EnergyAustralia (NSW)
• Smart Meter Deployment - by 2009, all customers
  with gt15 MWh pa (400,000 total)
• Strategic Pricing study 1,300 customers,
  dynamic pricing signals
• TOU for Residential Pool Owners
• Advanced Metering Infrastructure Trial 10,000,
  testing communications
• CBD Load Curtailment HVAC in commercial
  buildings
• TOU Trial 242 residential, 150 small
  business/commercial

13
DR in Australia

• Programs Electricity Companies
• Western Power Peak Demand Saver Program
• Feb04 compulsory restrictions on electricity
  use due to system constraints (high temperature ?
  aircon, gas supply to peaking plant constrained)
• Public backlash
• Western Power had to find 40MW of DR/ capacity
  support for 50 hours for 2004/2005 within 5
  months
• Contracted 61 sites with 81MW load reduction
  capability, ranged from 12.4K - 22K per MW/a
• Sites nominated amount they wanted to be paid
• Notice required 43MW day ahead, 19MW 4 hour,
  19MW 1 hour
• 50 of MW from manufacturing and mining, also
  from water, transport/storage, office/commercial,
  communications other
• Availability payment 20 of total payment

14
DR in Australia

• Programs New Energy Company
• Energy Response
• gt150MW contracted to NEM last summer
• Contract with NEMMCO for 125 MW for 15 hours from
  100 sites from 63 companies in Victoria and South
  Australia
• Mar06 - received 2.5M funds in DEUS Energy
  Saving Fund to encourage commercial and
  industrial customers in certain areas of New
  South Wales to reduce non-critical energy use at
  times of overall peak demand

15
DR in Australia

• Programs - Government
• Voluntary
• NSW Energy Saving Fund 40M per year for 5
  years can apply for funds to reduce demand,
  Mar06 grants were mostly energy efficiency, 2.5M
  to Energy Response (Demand Aggregator)
• Solar Cities - 75.3 million to demonstrate how
  solar power, smart meters, energy efficiency and
  new approaches to electricity pricing
• Mandatory
• NSW Demand Management and Planning Project
  (DMPP) - 10M fund to look at demand reduction in
  Sydney metro area as part of planning approvals
  for a grid augmentation project
• NSW RFP process in constrained areas ? bids ?
  recover through D factor
• Victoria rollout out advanced meters commencing
  1Jan08, full deployment within 5 years to 2.3
  million households
• NEM reforms interval meter rollouts from 2007

16
DR in Australia

• Programs - Government
• Commercial Buildings
• 24 of electricity consumption (ESAA)
• Use made up of 25 lighting, 24 cooling
  (chillers, cooling towers, pumps, motors), 21
  air handling (fans, motors), 12 refrigeration,
  5 office equipment
• Demand response opportunities
• Standby generators
• Load shedding HVAC set points, fixed dimming of
  lighting
• Australian Building Greenhouse Rating (ABGR)
  benchmark of greenhouse performance
• DR can improve ABGR rating
• Being used in marketing commercial office space
  link to Corporate Sustainability agenda

17
DR in Australia

• Programs - Industry
• Large industrial customer contracts can include
  DSM but almost never called for ? take matters
  into their own hands
• eg OneSteel (long products steel producer, 200
  sites)
• DSM was in contract but was never called on by
  retailer
• Renegotiated contract
• OneSteel can opt in and out during high NEM price
  periods
• Since 2003 has curtailed 20 times
• Electric Arc Furnace (40MW) switched to natural
  gas with only 10 minutes notice for up to 2 hours
• Compare to 10MW DSP stated in NEMMCO report
• Potential untapped in the market

18
DR in Australia

• Programs Technology Companies
• Currently available
• Wireless Monitors Australia Pty Ltd
  (CENT-A-METER)
• Computer Control Instrumentation (PowerMateTM)
• AMPY Email Metering (Home Energy Monitor)
• EDMI Pty Ltd (Automatic Meter Reading (AMR)
  Systems)
• Intermoco (Utiligy)
• RD
• CSIRO Distributed Energy Management Control
  Project
• Technology providers above are developing new
  models