What role might Demand Response play in a (possible) future grid featuring high levels of intermittency?

Last week Paul McArdle posted this article to WattClarity after speaking at All-Energy in early October. His presentation (with narration included) from the conference is available here:

Explaining what demand would look like on a renewable-heavy NEM to a wider audience

A previous article written by our CEO, Paul McArdle for WattClarity has recently been published on RenewEconomy.

Paul is booked in to speak at the 2015 All Energy conference about what role Demand Response might play in a future environment where intermittent generation sources supply a significantly higher percentage of the energy mix in the NEM.

In his article, Paul notes assumptions about consumption, the network and supply before going on to model a load duration curve.

DurationCurveUnservedNativeDemand03peak

New service (still under development) available at DemandResponse.com.au

We have been a keen supporter of different aspects of Demand Response in Australia’s national electricity market.  We have been, for instance, facilitating demand response for a number of large industrial energy users for more than a decade .

Over more than a decade, we have seen a steadily increasing awareness of the capacity of Demand Response to deliver significant value to the industry as a whole – whilst also providing a benefit to the particular energy user supplying the flexible consumption.

Years ago when we started this process, we found that the initial awareness was almost zero (and a reasonable amount of negativity in some quarters).  Hence we accepted, as part of our role, some responsibility for providing education about demand response – what it is, how it might work in the context of the NEM, and what the benefits would be.

We’ve not been the only ones involved in actively promoting the potential of demand response – there are a number of others that have made key contributions (which are referenced in the “Stakeholders” section of the site ** please let us know if we have missed others **).

The development of the site www.DemandResponse.com.au as another free service provided to electricity sector stakeholders, with the aim of making this particular aspect of complexity more understandable, was a logical extension of the time we have invested in education about Demand Response over the past decade and more….

We posted this article on the site on 1st July 2015 and have contacted many market stakeholders and observers, keenly seeking their input into making the site as effective as it can be in helping to make different methods of Demand Response as understandable by, and accessible to, a broad range of electricity users.

Helping to explain winter peak demand, and price volatility, to a wider audience

Cold weather during June 2008 saw electricity consumption soar in the Queensland region of the National Electricity Market – delivering some spot price volatility.

Seeking some insights into what was happening in the market at the time, we fielded calls from journalist Duncan Hughes (of the AFR).  Our CEO (Paul McArdle) assisted by

In his article “Power prices put business on back foot” Duncan quotes Paul as explaining one of the causes:

“demand was growing at 100MW every five minutes, which … necessitated … NEMMCO to schedule more expensive (peaking) generation as a temporary measure to meet high anticipated growth rate in demand…”

Duncan also quoted Paul as noting how demand response was active in response to the price spikes.

Explaining how a power upgrade delay may cost energy users billions

Our CEO, Paul McArdle has provided insights to Duncan Hughes from the Australian Financial Review in regards to how a power upgrade delay may cost energy users.

The article begins:

“DEFERRING until 2015 a $120 million upgrade of an electricity interconnector between Queensland and NSW will cost energy users about $5 billion in higher charges, major energy users say.

They claim an arcane formula – called the regulatory test – used to assess the merits of boosting the interconnector fails to take account for the real impact of the outcome on their costs.”

With the author quotes Paul commenting on the situation’s effects:

“Paul McArdle, managing director of market monitor NEM-Watch, said higher generating prices in summer peak periods would raise costs by $690 million a year, or about $5 billion for the next seven years.”

2008-03-13-the-afr

Providing insights to explain why Queensland energy prices soared close to record levels

After energy prices in Queensland soared close to near record level, even though there was enough spare generating capacity to meet the demand spike, there was much confusion and outrage among major energy users.

Seeking insights to help explain the situation, our CEO, Paul McArdle was quoted by journalist Duncan Hughes from the Australian Financial Review:

“The managing director of market monitor NEM-Watch, Paul McArdle, said major Queensland companies with retail electricity contracts but some spot-price exposure such as Smorgon Steel, OneSteel, zinc smelters and magnesium producers, managed the risk by winding back operations during the peaks.”

Paul went on to explain how recent events in the industry were affecting prices:

“Demand across the National Electricity Market was very modest and there was oodles of capactiy, more than 38,000 MW, available. But with the demise of state-owned Enertrade there are only four significant generators in the state and they have no problems keeping the price above $9000. They are doing their shareholders a good service.”

“Attempts to top up supply from generators in NSW were constrained because the interconnector between the states could only export 200MW, which would have been insignificant for managing prices.

Providing insights to help explain why smart electricity meters are being encouraged

In his article in February 2006, Nigel Wilson from The Australian has quoted our CEO, Paul McArdle in his article “Smart new meters to cut power” in February 2006. Mr Wilson sought insights from Paul in relation to news that Australian household would be encouraged to use smart electricity meters to cut electricity bills and reduce pressure on governments to build new power stations:

Queensland company Global Roam, which monitors electricity generation, said last week total demand for electricity in Queensland and NSW was 21,079 megawatts, while total available generation was 20,090MW.
 
Managing director Paul McArdle said the only reason lights were not going out was that the Snowy hydroelectric scheme was generating at near capacity and sending all its production into NSW.

Helping facilitate demand response by commenting on emerging opportunities

In the height of summer 2005-06 a journalist at The Age, Rod Myer, wrote this article “Power to cut out the middleman” to highlight a different approach a number of large industrial energy users were adopting to lower their average cost of energy consumed, whilst at the same time providing a valuable service to the market in helping to mitigate peak demand.

The article begins:

SEVERAL Australian businesses are choosing to manage their exposure to the national electricity market directly rather than contract with retailers. And many who choose to go down this path are providing much needed backup for the power system by turning their plant off when power prices spike.”

Given that our company has been active in facilitating Demand Response for a number of years, it made sense that our comment was sought about this emerging opportunity for energy users.

The author notes our CEO, Paul McArdle, as commenting that:

“… companies using Global Roam software had added about 200 megawatts of demand-side response to the market by cutting use at certain trigger power prices.”