AEMO highlights crucial role of demand response in managing energy system risk last summer 23 May 2018
A new report from the Australian Energy Market Operator’s (AEMO) has highlighted the role of demand response in improving energy security last summer, says the Energy Efficiency Council.
Council CEO, Luke Menzel, welcomed AEMO’s ‘Summer 2017-18 operations review’ as evidence that Australia’s market operator is meeting the challenge of improving the reliability of Australia’s energy system.
“The 2016-17 summer was rough for consumers, with load shedding events hitting households and businesses on very hot days. There were serious risks for 2017-18 if some of our old, large generators had broken down during a heat wave.”
“AEMO has stepped up to the plate, securing generation and demand response to help them manage risk during periods of peak demand last summer.”
Under the ‘Reliability and Reserve Trader’ (RERT) scheme, AEMO secured 141 MW of demand response in New South Wales, South Australia, and Victoria over summer 2017-18.
Demand response – common in countries around the world but not in Australia – means energy users can be paid if they voluntarily reduce their energy use during emergencies (when demand for electricity exceeds supply). This allows the system operator to keep energy flowing to other homes and businesses.
RERT resources were activated twice over summer, during very hot days when energy use was peaking and the system needed an additional buffer.
“AEMO found that demand response resources were effective, and performed to expectations.”
“The experience over summer demonstrates that demand response is both reliable and available. The fact that AEMO was able to secure 141 MW of demand response capacity in just a few months as part of its broader summer preparations, underlines just how underutilised this resource has been.”
“The big message out of last summer is the crucial role the demand side will play as we move to a more dynamic, flexible and responsive energy system in Australia.”
“However so far we are only utilising demand response for ancillary services and emergency capacity. As AEMO flags in their report, the next step is competition between supply and demand side resources in the wholesale electricity market, which is one of the very few options we have to quickly drive down energy prices for businesses and households.”
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