How Yarra Valley Water reduced costs with demand response - Flow Power

How Yarra Valley Water reduced costs with demand response

Securing Yarra Valley Water’s energy supply

Flow Power helped Yarra Valley Water, Melbourne’s largest water retailer, reduce operational expenditure through a proactive approach to power management.

Yarra Valley Water’s Greenhouse Gas and Energy Specialist, Simon Prunster, offered insights into the role energy plays within the water sector.

“We provide an essential service that is dependent on consuming electricity. Put simply, without energy we could not function in our current mode of operation and this would have a major impact on the health and wellbeing of Melbourne.”

“We require a reliable supply of electricity to ensure we meet our Statement of Obligations in the provision of water and sanitation services on behalf of the Victorian Government.”

“The risk of blackouts causing unacceptable sewage spills has led the business to make capital investments in backup diesel generators that are rarely used.”

 

In addition to supplying Yarra Valley Water with electricity, Flow Power helped to manage energy cost risks. This was one of the key advantages of partnering with Flow Power, over alternative retailers.

“Managed exposure to pool pricing is not a service offered by many retailers. At the time of the VIC Water approach to market, on behalf of various water retailers, Flow Power was uniquely placed to meet our specific requirements. This is why we chose them and why we recontracted with them.”

Prunster states, “As part of the retail supply contract at these sites, Flow Power actively assisted Yarra Valley Water with risk management through either remotely activating back-up generation or advising plant operators to shed load to avoid high pool prices.”

“This type of active approach to electricity management gave Yarra Valley Water greater exposure to the wholesale price, and we did this with a view to reduce electricity costs.”

Prunster says Flow Power helped Yarra Valley Water change the way it used power, and minimise operational expenditure by managing energy-supply risks through demand response.

“Don’t be afraid of pool pricing if you can put in place strategies to manage risk, such as an effective demand response program.”

–  Yarra Greenhouse Gas and Energy Specialist, Simon Prunster

 

How does demand response work?

At Yarra Valley Water’s larger sites, they went from being passive consumers to having operators actively manage demand response events, to reduce operational expenditure. In executing this strategy, there was more work involved for the business, and it required coordination throughout the business.

Prunster says demand response was not an easy thing to get right straight away, but the more they participated, the better they got. It was an ongoing learning process.

Ultimately, they reached a level of demand response maturity. The business became used to making decisions based on cost versus benefit analysis.

 

Operators gained confidence making informed decisions on whether or not to participate in a demand response event, dependent on the specific circumstances at each site.

With Flow Power’s assistance, Prunster says Yarra Valley Water was able to avoid high pool price events through the implementation of a demand response program.

“Don’t be afraid of pool pricing if you can put in place strategies to manage risk, such as an effective demand response program.”

“By taking on exposure to pool pricing, all you are doing is paying the actual price of electricity, and if you execute a demand response strategy, then you can avoid paying the risk premiums that are inherently factored into the traditional retail price.”

Flow Power’s, CEO, Matthew van der Linden says there is “a lot of room for flexibility” within the energy retail space, and all it takes is a “little extra effort” to create a water-energy partnership that works.“

“We also worked closely with Yarra Valley Water’s metering. We installed our kWatch Intelligent Controllers onsite to match its generation and energy use to the signals of the market,” says van der Linden.

“Many water boards had been offered fixed rate contracts for their electricity supply. Following conversations with the Flow Power team, Yarra Valley Water were able to unpack the options for a more flexible arrangement.”

Questions about demand response? We’re here to help.

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