ARENA Valuing Load Flexibility report 20 April 2022
The Australian Renewable Energy Agency has released a commissioned report on valuing load flexibility in the National Electricity Market, undertaken by NERA Economic Consulting and Energy Synapse. The project modelled the effects of increasing demand flexibility across five different scenarios (called States of the World), against the demand-side participation assumptions in the AEMO Integrated System Plan Central scenario.
The States of the World included:
- Baseline: Adding in flexibility from flexibility from existing residential & commercial demand response (e.g. heating & cooling, hot water systems, pool pumps)
- High EV uptake: Adding in flexibility from electric vehicle charging and vehicle-to-grid capability
- Electrification: High electrification of residential, commercial and industrial flexible demand sources such as HVAC, metals and minerals production, and food and beverage
- High DER uptake: Adding in high behind-the-meter solar PV and battery uptake, as well as high large-scale solar deployment
- Hydrogen: Increasing load flexibility in grid-connected hydrogen electrolysers
Across all scenarios, the modelling finds significant savings to future capital and operating costs in the NEM, and even larger savings to customers through adding load flexibility and avoiding peak pricing events. Savings to customers could range between $5-18 per megawatt hour on a net present value basis, with the largest savings (and emissions reduction) being realised in the high DER uptake scenario. The report clearly demonstrates the value of energy management and flexibility, which will support ongoing work to increase the role of energy management and demand response in the transition to a net zero economy.
The full report and technical summary are available at https://arena.gov.au/knowledge-bank/valuing-load-flexibility-in-the-nem/