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Get smart: AEMO unveils 200MW “virtual power plant”

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The Australian Energy Market Operator has signed up for 200MW of demand response capacity, creating a “virtual power plant” twice the size of the Tesla Big battery to deal with heatwaves and supply failures – and prevent blackouts – in the heat of summer.

The result of the much awaited demand response tender will see 143MW made available this coming summer, and the rest by 2020, in a crucial addition to AEMO’s ability to meet extreme demand peaks and supply shortfalls, and transition the grid to a smarter, faster and cleaner machine.

The projects feature a range of monitoring, control and storage technologies, to be installed in homes, businesses and large manufacturers, who will be paid to moderate demand, or switch their use to a different time.

This new “virtual power plant” will add to the Tesla big battery being built in South Australia – in total it will be effectively twice the size – and other measures put in place to ease the strain on the grid created by the recent closure of Hazelwood  brown coal power generator.

The tender, funded by the Australian Renewable Energy Agency (ARENA) and the NSW government, was won by 10 different pilot projects – out of 26 shortlisted – mostly through commercial and industrial customers, who will get paid for reducing their demand at critical times.

demand response

AEMO considers demand response – relatively undeveloped in Australia – a critical tool to deal with unexpected outages from coal and gas plants, particularly when they struggle in prolonged heatwaves.

It says it is far cheaper, and smarter, than building new gas plants – which has Australia’s traditional response for the last few decades, and it signals a major shift in the way the grid is managed.

AEMO chief executive Audrey Zibelman said the projects would undergo testing by AEMO in November and would be up and running by December.

“These demand response projects will help manage spikes in peak demand in a cost-effective way using our existing electricity infrastructure and clever new technology,” she said.

“It is clear that demand response has untapped potential to manage demand during extreme peaks in Australia, just as it does in other countries,” Zibelman said.

“We’re hopeful this will create the proof of concept for a new market mechanism that will ultimately be to the benefit of Australian consumers.”

Indeed, Zibelman has said that demand response initiatives could account for 30 per cent of peak demand, as it does in other countries.

ARENA will commit $28.6 million to the operational costs of the project, while the NSW government will pitch in $7.2 million for the 80MW of NSW-based projects. ARENA boss Ivor Frischknecht said more capacity had been achieved at a lower cost than expected.

“Through this initiative, we’ve been able to build a virtual power plant the size of two of Tesla’s giant 100MW batteries in a matter of months for a fraction of the cost of building new supply,” he said.

“Demand response will not only ease the strain on the electricity grid and prevent blackouts. These projects will also put money back into the pockets of Australian businesses and households, helping to reduce their energy costs and emissions.”

The projects have been put together largely by energy retailers tapping into a range of services offered by Australian and international companies, and incorporate a range of technologies and services, including voltage control and intelligent thermostats, and “app” notifications.

Large-scale industrial and commercial businesses – such as cold storage facilities, manufacturing plants and commercial buildings – will take part, including tens of thousands of households who will voluntarily sign up to participate in exchange for incentives.

One of the biggest winners will be EnergyAustralia, which will provide 50MW across three states using Wattwatchers monitoring technology and load curtailment devices, Redback Technology’s VPP technology for aggregation and GreenSync’s smart battery storage systems.

EnergyAustralia will provide 20MW of this capacity in NSW, 11MW in South Australia and 9MW in Victoria from commercial and industrial businesses, and residential customers.

Another big winner was Enernoc, which won two projects totalling 50MW in NSW and Victoria, while AGL Energy (smart meters, and controlled load), Zen Ecosystems and Powershop also won tenders.

United Energy will use voltage control devices installed at substations in Melbourne and Mornington Peninsula to “slightly lower” the voltage across its whole network of 600,000 households and businesses, and will use smart meters to ensure the voltage remains at a safe allowable limit. That will deliver 30MW.

The one major energy user to win a contract directly was Intercast & Forge, a South Australia metal foundry which has installed sophisticated energy systems that allow it to provide dispatchable demand response by powering down furnaces during peak events.

The Powershop initiative will encourage customers to “curb their power”, reducing energy usage for 1-4 hours, in exchange to the equivalent of a weekend of free electricity. It will also draw on 1MW of Reposit enabled batteries installed in Powershop customers’ homes and on a 1 MW co-generation facility at Monash University as a backup.

  

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  • Robert Comerford

    Am I the only one to suspect asking customers to turn off their air
    conditioners this summer is both a scare campaign and a smoke screen?

    • Rod

      If air conditioners are part of this, they will be turned off for about 10 minutes per hour. I would be happy to play if they pay. Are you listening AGL?

      • Sylvia Else

        Turning them off for 10 minutes per hour wouldn’t achieve much, becasue whey they’re turned back on they just run for longer to return to the thermostat set point. There is a minor saving because your average temperature is increased, which you could equally achieve just by setting the thermostat higher.

        • Rod

          Yes, but if the grid can turn enough ACs off instantly for long enough to balance voltage when a unit trips or to give enough time to bring fast acting gas in when demand peaks this is useful.

        • daroiD8ungais7

          There is an Australian Standard AS4577.3.1 for ACs. It’s not mandatory but most new AC will support. It basically mandates (for full compatibility) that AC have 4 physically switchable energy consumption levels 100%, 75%, 50% 0%. (overridable by local user). This is what they will use. There is analogous AS4577.3.X standrad for some other major household devices.

    • Mike Shackleton

      My lay person’s understanding is that many new/late model AC units are “controlled load” compatible. Meaning, they can receive a signal through the network that tells them to switch off/reduce load during periods of high demand. Other appliances where consumption is not essential like pool pumps could be set up to do the same thing using a plug through device that just cuts the power to the pump. I’m sure someone can explain it a bit better than me but it sounds a whole lot better than building a whole stack more generation capacity just to deal with those of us who want to wear a jumper inside during the middle of a heat wave.

      • daroiD8ungais7

        > “My lay person’s understanding is that many new/late model AC units are “controlled load” compatible. Meaning, they can receive a signal
        through the network that tells them to switch off/reduce load during
        periods of high demand.”

        What evidence do you have to justify this?

    • BushAxe

      Realistically targeting larger industrial/commercial loads first is going to give AEMO much more bang for their buck. Installing demand management on thousands of homes will take years to get similar results.

    • john

      NO it is asking people to moderate their demand.

  • George Michaelson

    I always believed this existed off-record, as pricing negotiations with some consumers like cold stores, shopping centres, who had an ability to use thermal mass (within limits) and act as a variable consumption model if need be. I’m stunned at the cynicism of the LNP in Qld who (on yesterdays ABC news) spun this as a retrograde step after Labor announced consumer demand management and a request to set AC on 26.. when it was an initiative proposed under a prior LNP government!

    • Mike Shackleton

      AC in Australia is insane – we have open-front shops that literally blast cold air into the street. You can go to a movie theatre in summer and need to wear a jumper because the AC is high. I understand going to the movies is a great thing to do when it is hot but does the temperature need to be below 20 degrees?

      You go to cities like New York during their heatwave. You access every building through a door or revolving doors.

      • Jake Frederics2

        Completely agree. We are very efficient.

        • daroiD8ungais7

          Or we just have no building standards.

    • John Saint-Smith

      You would have to appreciate Opposition Leader Tim Nicholl’s capacity for ugly partisan negativity on any subject in order to understand this. When an ALP Minister was recently forced to resign on urgent medical grounds, Nicholls greeted the announcement with a call for an early election (It is due before the end of May, next year).
      Should they win government, the LNP (and unofficial partners One Nation) will be certain to beg the NAIF for tax-payers’ funds to build a redundant coal-fired power station in North Queensland – because no other finance will be available.

      LNP-informed members of the Queensland public immediately reacted to the suggestion that people could voluntarily set their a/c at 26 degrees as tantamount to subjecting them to boiling in oil.

    • Steve Jordan

      I remember a comment a number of years ago about a group of large users approaching the authorities with an offer to reduce their consumption by agreement. However, at that time, the offer was rejected by said authorities.
      As George has suggested, this idea is not new.

  • Alasdair Stuart

    Am I the only one to think –
    Good thinking 99 ?

    • Ren Stimpy

      Hymie could manage the demand response for them. Just don’t turn on the radio in a heat wave because when The Nitty Gritty is playing Hymie stops everything else and starts dancing.

  • Michael Murray

    http://www.abc.net.au/news/2017-10-11/power-bills-would-you-switch-off-your-aircon-for-a-movie-voucher/9037330

    Who runs an air-con at 17º C ? I thought you were lucky to get a drop of 15º from most air-cons. So when it’s 40º you should be expecting 25º.

    Also how do we get paid for this ?

    • Phil

      I ran an 8kw non inverter unit at 20 on a 45 degree day to see if it could and it was JUST cycling in and out.

      The power consumption was horrendous

      • john

        Using 20c is not exactly smart use at least 24c or more.

    • Jake Frederics2

      No, you can get more cooling. If very hot and if you have solar panels it makes sense running ac at max 9am to 3pm when it is essentially free of charge. EG 7kW A/C should be using no more that around 2.2kW; so with around 4kW solar you’re cooling the home Free of Charge

  • Cooma Doug

    This is only the tip.
    A mate just told me he made a deal to install 15kw of solar. He has 7 kwh battery. When he is not home the available energy is significant. Batteries going from charge to discharge across the grid is a big deal.
    If there is a hot day with potential problem peaks, the battery responses and reduction in load will be huge.
    There are so many energy products in homes when you have a close look. This was written about over 30 years ago.
    This was talked about in the 70s
    Well before battery technology emerged, load side response ideas have been ignored.
    It is stunning what can be done with a 1980s motel for example, with power sharing and non disruptive load side response.
    We have only scratched the surface. The numbers they have put here are modest.

    • Les Johnston

      On the subject of air conditioning, multi-storey systems could just turn off the electric reheat to warm up some of the zones. This would make a killing by saving real electricity. I wonder if “smart” systems are just too smart for the average politician?

  • Cooma Doug

    Air cons 20 years ago were AC motors and consumed a lot of vars. Places like Canberra had huge var consumption on the lines between Sydney, Snowy and Vic. This caused a lot of voltage control problems and created high risk of exponential system colapse. The modern DC motors dont consume vars and the voltage issue is much less. The load management ability is also an untapped asset.

    Folks we wont need text messages in 10 years requesting 26 degrees or 18 in winter.
    There will be system frequency response in milli second time.
    This effectively splits the system load into areas where local actions will eliminate power swings. The response in the home will be non disruptive. Nobody will notice any problem.
    Common sense tells me that your home system management products will be accessed. There will be no need to reward for individual action. The bill will be reduced based on your product accessment.
    Ultimately if there 25% of grid homes accessed, this could give us more security management products than we will ever need.

    • ozmq

      I had to look up “vars” …

      • Richie

        Me too. From Wikipedia: In electric power transmission and distribution, volt-ampere reactive (var) is a unit by which reactive power is expressed in an AC electric power system. Reactive power exists in an AC circuit when the current and voltage are not in phase.

    • Julie Mulhauser

      Hi Cooma Doug,

      My understanding is some current models of air conditioners already come enabled with DSM. Maybe someone with better knowledge on this matter can enlighten me?

      I think a bad job has been done by the government of selling this good news story!

      The MSM is full of outraged people claiming we are now rationing energy and will be frying in a heat wave! No one is setting them straight- in addition to the usual suspects fanning the flames even the ABC reportage wasn’t terribly reassuring!

      Someone from ARENA or AEMO should be explaining to the MSM how the pilots will work and how the consumer will benefit from grid stability, not building more supply and possible payment to be part of the program.

      Unless someone credible explains them properly to the public – the projects are not going to be supported – don’t leave it to the pollies!

      • Patrick Comerford

        You are correct any new model of ac unit comes DRED enabled. ( Demand Response Enabled Device). An additional control module is included in the ac compressor run circuit which is programmed for three different levels of reduced output from OFF to 75% capacity. A ripple signal can be sent through the grid connection wiring (as currently done with any off peak controlled load) to the ac compressor and control the compressor motor.
        There is more to it than this but I am interested to learn what the process is for initiating the control signal and any other technical matters related to DRM. The link below provides some info.

        http://www.temperzone.biz/AU-Home/Tech-Info/Technical-Support/What-is-DRED/

        • Julie Mulhauser

          Hi Patrick,

          Thanks for this. Are the ARENA trials involving households utilising this ? The media release with the phone app notification and advice to go to a cinema makes it sound like people are being asked to turn off their ac. My understanding was the load is instantaneously managed but that a household wouldn’t notice any change in performance.

          As I say it has been woefully sold in the media – which is a real shame!

          As an aside – I posted on the Andrew Bolt blog today asking for people’s risk assessment due to climate change and their plan B and am now going through their responses – which is quite depressing – hard to know where to begin!

        • Mark W

          There was a trial of this capability in Brisbane (I think) last summer. It worked well, and the people involved in the trial mostly said they didn’t even notice their aircon was having its compressor (but not fan) switched off for 15 minutes occasionally. The trial was run iopn a rolling basis – at any given time only a portion of the aircons were controlled, and the control period was such that mostly there was limited impact on indoor temperature. Unfortunately I have no info on just how successful the trial was from a “reducing aircon peak load” perspective.

          • daroiD8ungais7

            Patrick, It’s Demand Response Enabling Device (not Enabled). You need a DRED and a DRED compatible AC (AS4755.3.1) . While DRED compatible ACs are becoming common you still need a DRED. Apart from that temperzone units you linked to I don’t think many would support a ripple signal compatible DRED. Ausgrid is doing a second trial this summer, targeting AS4755.3.1 ACs but unfortunately they have to use GSM signaling and a specifically installed DRED controller on all units – AFAIK. More info http://www.ausgrid.com.au/coolsaver.

          • Mark W

            Targeting aircons is a worthy initiative given that the surge in installations of home airconditioners over the past 20 years or so is a very major contribution to peak electricity usage today.

            But I can’t help feeling that it is solving the problem in the wrong part of the house in the wrong way. As home automation systems and compatible energy meters (e.g. the SMA Home Gateway 2.0) proliferate, the opportunity to take a whole-of-home approach to demand management (switch off the dishwasher, washing machine, dryer, freezer, HWS, electrical vehicle charger, pool filter, etc etc. as well as the AC compressor) and get a far stronger result. Indeed, homes will be able to feed power from their batteries (and a home with an electric vehicle will have up to 100kWh of battery available) if the incentives are right.

            The next big peak driver will be people plugging their electric vehicles into the charger when they get home. Will we need a second DRED to control that? How many of these intrusive devices will we end up with?

            Personally I would be very uncomfortable installing a device that is tamperable and therefore needs to be subject to outside checking behind my meter and inside my home. If the electricity retailer is going to pay me money to install a device on my aircon, then they presumably have to be able to ensure that device works.

            Far better to have a dynamic tariff system and communicate the tariff to the home automation system and then the consumer can make their own decision about whether to shed load or take it in the shorts on high peak tariffs. It will take longer for such a system to become widespread, but the positive impact on peak loads will be far higher and the demarcation between the consumer and the retailer remains at the meter where it belongs.

          • daroiD8ungais7

            Agree. AS4577.3.1. is actually a good spec though. All it does give a set of physical control inputs on an AC for 0%, 50%, 75%, 100%. How we use that physical interface is out of scope of that standard. The DRED really should be part of a smart home system. In VIC we have smart meters that are supposed to be Zigbee SEP compatible which means they support broadcasting TOU and DR events from distributors/retailers to compatible appliances in a house. It is baffling to me why we don’t see this capability talked about or used more in VIC. Maybe I’m just not looking in the right places. In NSW I guess they don’t have that yet so they have to install their own custom DREDs right now.

          • Mark W

            I am comforted by this! Seems like things are at least headed in the right direction.

  • Sylvia Else

    My computers, lights (compact fuoro and LED), airconditioner, and microwave oven all consume the same power regardless of voltage. My fridge and kettle would draw less, but they’d draw it for longer to compensate. In summary, I can’t see that a change in voltage would have any practical effect on my power consumption. So where would this 30MW of saving come from?

  • Steve Applin

    I’ll apologise for the stupid question in advance if it’s considered as such by those more knowledgeable than me on here.

    Demand Side Management (DSM) has been going on for years in WA, and it’s been successful. Why are the RWNJ’s making such a big deal of it on the NEM?

    • RobertO

      Hi Steve, remember the RWNJ are all member of the COALition whom want more COAL at all costs. New COAL in NQLD, say 10 years by the time it gets into action, new COAL in Victoria about the same time, costing the australian tax payers about $12 billion only to be sold off by the RWNJ to their mates for a bargin price of $10 billion (to them to take the power station from us) paid for by us tax payers (costing us $22 billion all up).

  • Sylvia Else

    Will the airconditioner have to be on for me to get a payment for letting them turn it off? I have a big one that I rarely use (I have a smaller one for my study), so perhaps I’ll just have to turn it on at times of high demand so that I can be paid when they turn it off again. If people can game the system to get paid, then many will.

    • Ren Stimpy

      You would be crazy to do that. They only need demand response in a very small fraction of the time. If you turn your air conditioner on expecting to get paid for demand response, but the system doesn’t need demand response at that time, you’re the fool.

      Here is the new rule for aircon use under demand response
      1) Turn your aircon on when you need to.

      Um, sorry it looks like the new rule is exactly the same as the old rule.

  • Robert Comerford

    I wasn’t far wrong. The airwaves are already full of scaremongering and tales of impending blackouts this summer and how we are going to have to suffer to stop it happening.

    The ‘free ticket to the pictures in exchange for shutting off your a/c’ grab is getting the most play as people quite rightly disparage any such suggestion.

    If they can override the drinking water quality standards in NSW to keep a few coal miners in a job in Lithgow when there are plenty of other coal mines in the state to feed that power plant they are capable of anything. I keep hearing how this power plant is a modern ‘clean coal’ one…. I am amazed ! :>)

  • Chris Fraser

    I wish them all well. It does sound like demand response is news only in Australia. It’s unfortunate my retailer is not participating.

  • Jake Frederics2

    This is a bad plan in the current form.

    Australia has a lot of further potential to manage demand eg. use of thermal mass, manage of water heating, a/c etc. but extending this program to residential users is an issue for me. I not not going to give a crap trying to save $5 at 7pm on a hot QLD day …….but my in-laws (75 and 80 years old) already said they will switch off to save some money. Therein lie the problem; people already suffering will be suffering more.

    BTW; on a hot day I run AC at 19 deg in order to switch off at 6pm when sun goes out (I am off-grid) and then switch to the ceiling fans. It is easy to manage consumption if you plan ahead.

    • Chris Fraser

      I’m not convinced in the notion of suffering more. Where did you identify the coercion as regards to your in-laws ?

      • Jake Frederics2

        Most people commenting on this site are well-off and many of them idealistic on top of that. I work (mostly) in the rural communities of QLD and many people don’t even have the means to finance $3k for solar which is a no-brainer in a hot climate zone. These are the people that will switch off appliances to save money if they had the opportunity to do so.

        • Chris Fraser

          Which would be good … as long as that is their opportunity and free choice to do so.Or maybe you’ve spotted a reverse disadvantage to consumers who can’t engage and make savings with it – because they either aren’t with the participating retailers or they’re pretty sure they’ll need all the energy they normally use at any time they need it.

  • RobertO

    Hi all, Think of demand management (DM) as a freeway, alway available but not at the size we all want. The M1 north of sydney works well 98% of the time. Demand management is applied to the size of the freeway. We all want 6 or 8 lanes north or south but we can not afford it so we put up with some delays on long weekends or the start or finnish of school holidays. Car crashs are the rolling blackouts that sometimes happen (and sometimes there appears to be no reason for it).
    With AC in WA they have been doing DM since about 2001 by ripple control where they turn the AC down slightly (to 85% power) over alternative parts of the grid for short periods of time (about an 1 hr at a time). Most people do not even know that they have had a tiny reduction in power because the system still working. Their power bill is reduced (slightly and they also get a discount on the AC when they buy it,used to be about $700 on a $5000 system. I believe it law over there). This has the effect of removing the top part of peak useage. It not used every day, but only when they get close to maximum demand on the network. This is just one form, there are other types of DM which will also be apply in the longer term. I think is was PJM in the states that said DM would cost them $15 Billion to apply control boxes to every house hold customer, with the average house hold customer saving about $1000 per annum and the network they manage would save $75 Billion per annum.