AEMO, ARENA want to expand demand response trials
By Giles Parkinson on 30 May 2018
The Australian Energy Market Operator and the Australian Renewable Energy Agency say they want to expand their successful trial of demand response activities, to facilitate and accelerate what they see as the inevitable shift from a centralised grid to a distributed one.
The two agencies worked with various state governments to aggregate a total of 146MW of demand response capacity last summer, which added to AEMO’s pool of emergency back-up in case of a supply shortfall.
The findings from that trial, presented in a joint submission to the Australian Energy Markets Commission, highlights the potential savings from demand response, particularly over the diesel generators that have traditionally responded when supply is short.
AEMO and ARENA said the establishment costs of demand response were one fifth that of a conventional diesel generators – coming in a $200,000 per megawatt of capacity, compared to $1 million/MW for a diesel generator.
And because a diesel generator still has to bear the cost of burning that fuel, if used, the gap between the operating costs of demand response and diesel generation were even bigger.
This table shows that the average cost of demand response was some six times lower than diesel generators. Some of the products delivered the service at a fraction of the cost.
Now AEMO and ARENA want to explore ways of trialling direct wholesale market access for demand side resources, which could include battery storage and tapping into appliances spread across the grid, in homes, businesses and factories.
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