NSW invests in a 21st century energy system 23 June 2017
The Energy Efficiency Council has welcomed action from the NSW Government to support NSW energy users to voluntarily reduce their electricity consumption to improve energy system stability.
The pilot program, run by the Australian Energy Market Operator (AEMO) and the Australian Renewable Energy Agency (ARENA), has received a $7.5 investment from the NSW Government, which will be matched by ARENA. The pilot, which initially focused on South Australia and Victoria, is securing 'demand response' capacity by next summer to improve system reliability during extreme weather events, or unplanned generation outages.
The investment brings total funding for the program to $37 million. Ramping up effort on demand response was one of the key recommendations of the Finkel Review, released just two weeks ago.
“This is fantastic news, and demonstrates that momentum is building in Australia's transition to a 21st century energy system,” said Luke Menzel, CEO of the Energy Efficiency Council, the peak body for energy efficiency and demand response experts.
"We are emerging from a long period of inertia in Australia, which saw tools like demand response being left in the toolbox, despite the fact that they can bring down costs and improve reliability. That has contributed to skyrocketing costs for energy users, and reduced system security."
"This decision from NSW's new Energy Minister Don Harwin demonstrates a strong intent to use all the tools in the toolbox to solve Australia's energy crisis."
The NSW Government's action is in line with Dr. Finkel's recommendations, and the views of the NSW energy security taskforce, which also recommended action on demand response in its initial report released in May.
About demand response
"The fundamentals of demand response are simple – working with consumers to voluntarily move their energy use from periods of high demand (or low supply), to times when supply is plentiful," said Luke Menzel.
"Where demand response gets exciting is when you can do it quickly, and at a scale. The technology now exists for sophisticated and substantial demand response, enabled by aggregators that combine many different sites together into ‘portfolios’ that provide flexible, secure and stable demand response."
"This approach is common in energy markets around the world, but has long been underutilised in Australia's National Energy Market (NEM), because the right structures and incentives for aggregators to do this work haven't been put in place," concluded Menzel.
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