Put simply, demand response is a change in how and when your business consumes power to match demand for power with supply. Not only does it make sure you’re matching your use to the lowest cost times in the market but there are market incentives in place to reward the businesses that power down.
When Victoria experiences record-breaking heatwave such as what occurred on Thursday 24 and Friday 25 January 2019 it puts enormous pressure on our energy grid. To reduce demand, the Australian Energy Market Operator (AEMO) calls upon businesses to power down by triggering the Reliability and Emergency Reserve Trader (RERT).
Designed to be used as a backstop, RERT is triggered when AEMO needs to intervene in the market because there isn’t enough supply to meet demand despite other precautions.
This supports the reliability and security of the grid at times of critical need. In other states, such as New South Wales, AEMO may call upon businesses to participate in its ARENA demand response program instead. Many electricity networks also run demand response programs that businesses can benefit from.
Wherever you are, these programs are designed to give businesses an incentive to power down when demand is peaking to keep prices down and the lights on.
Interested? Let’s dig deeper into the programs available in your state.
Based in Victoria or South Australia? RERT is the answer
As part of RERT, AEMO engages businesses that can provide reserve energy on short and medium notice by powering down or off in return for financial rewards. For businesses that are contracted for RERT through a retailer like Flow Power that passes through market benefits there’s even more positives.
Businesses that have direct access to the wholesale market can participate in these programs, like RERT, and avoid the few hours of peak demand a year, lowering average energy costs. On rare occasions, RERT can be called even when prices aren’t high. For example, on 25 January, the RERT program remained active even while AEMO stepped in to cap market prices – providing businesses financial incentive to power down even though spot prices were significantly reduced from the day before. The support that businesses can provide to the energy grid through RERT is invaluable and can help keep the lights on during extreme events, therefore AEMO rewards businesses that can power down.
New South Wales? Get behind ARENA Demand Response
In 2017, Australian Renewable Energy Agency (ARENA funded a program to grow demand response. The program operates very similarly to RERT in Victoria and South Australia but extends to New South Wales. Through the companies participating in this pilot, businesses can help support the grid when it needs it most and receive participation payments for doing so.
Businesses can tap into the ARENA demand response program through Flow Power and gain access to tools, such as the kWatch® Intelligent Controller, to simplify or even automate demand response. Afterall, we’re here to make wholesale electricity better for your business.