AGL unveils largest demand response trial, combing solar + storage

Australian energy retailer AGL Energy is working with 68 households in the Victorian suburb of Carrum Downs to investigate how energy management technology, as well as solar and storage, can be used to balance spikes in electricity demand during hot weather, and ultimately reduce consumer energy costs.

The demand response trial, the first of its sort to be led by a major electricity retailer, will more specifically seek to measure the impact on the grid of air-conditioning usage during hot weather events.

As noted on RE many times before, the collective impact of air-conditioning on Australia’s National Electricity Market – the infrastructure and the pricing structure – has been largely ignored by networks and regulators, next to the more divisive and politically convenient subject of mass rooftop solar uptake.

And yet around one-quarter of all our electricity bills are caused by the cost of the infrastructure we have built to meet the “critical” demand peaks that occur for just 40 hours of the year – almost exclusively when people turn on air-conditioners at the same time to seek relief from those summer temperature scorchers.

Meanwhile, the percentage of homes with air-conditioners jumped from around 25 per cent in 1975 to 70 per cent in 2012, with that percentage nearly doubling in the last decade.

AGL says the main aim of its trial – which is already underway and is scheduled to wind up at the end of this month – is to prove technical capability in reducing at least 25kW of energy being drawn from the grid for the duration of each hot weather event as a demonstration of alternative ways to balance peaks in energy demand.

Essentially, it is creating a virtual power plant of 68 homes in and around Carrum Downs – a part of Melbourne which is experiencing population and housing growth – and which may require upgrading of its electricity infrastructure in coming years.

These households – all with local network provider United Energy – have had cloud-interfaced air conditioning units installed and connected to virtual power plant software. Six of the homes have also had batteries installed, to work with existing solar PV systems.

During the trial, the customers’ air conditioners will be sent commands to slightly increase the setpoint temperature, to reduce power demand from the grid – although customers can opt out before or during each hot weather event over the four-month trial.

Those homes with rooftop solar and battery storage will dispatch stored solar power back to the grid during an event.

It will be particularly interesting to see how those houses with solar and batteries contribute. As Rob Campbell wrote on RE last year, “(battery) storage should reduce demand peaks on the grid at more significant times such as evening and therefore reduce network costs, but this is not likely to occur with organic take-up of battery storage. There needs to be a revolution, and retailers have the key.”

Jason Clark, AGL’s general manager of distributed energy services, hopes the trial will give customers an opportunity to be part of the solution, as well.

“If peak demand can be reshaped through minor changes to customer behaviour, network companies may be able to delay or avoid major investment that would put upward pressure on energy prices, while maintaining the same levels of supply reliability,” Clark said.

“We’ve had a high level of engagement from customers during the trial with 83 percent saying they felt no or little discomfort during a hot weather event. And, while 25 percent had some initial reservations about the trial, after three events 100 percent said they were satisfied with the trial, and of these, 71 percent were totally satisfied.

“Participants have also told us the potential for long-term benefit such as reductions in energy costs, having smarter monitoring of household energy usage and involvement in new energy products were reasons for being part of the trial.”