Demand response, VPPs added to extended South Australian energy productivity scheme

The South Australian government has extended and expanded a program designed to help households and businesses cut their energy costs, expanding a previous energy efficiency scheme to include demand response and the creation of new virtual power plants.

The South Australian government has rebadged its residential energy efficiency scheme, which has been evolved into the Retailer Energy Productivity Scheme (REPS) and extended its operation out to 2030.

The program places an obligation on electricity retailers active in South Australia to support customers to undertake a range of energy efficiency measures and has primarily supported upgrades of lighting and appliances.

The South Australian government expects that the changes will deliver a wider range of product offerings for consumers. Under the expanded program, retailers can also meet its obligations under the scheme by helping households to shift their demand, reducing consumption during peak periods by incentivising households to participate in demand response programs and to join virtual power plants that coordinate the use of battery storage systems.

The scheme has been expanded to provide incentives for the deployment of demand response services as well as load shifting initiatives, and will reward retailers for supporting customers to shift to time-of-use electricity tariffs that provide peak demand price signals that encourage households to use appliances like pool pumps and hot water systems in off-peak periods.

However, the changes have been introduced despite some concerns being expressed by advocacy groups, who told the South Australian government during consultation processes that it was possible the changes would see retailers shift their focus away from energy efficiency measures, to a focus predominantly on energy security measures.

“This focus may come at the expense of increasing thermal comfort and reducing energy consumption of households who participate in the scheme through their retailer, with the flow on benefits of reducing household electricity bills. SACOSS understands the need to improve energy security in SA; however we don’t believe that the REPS program is the correct
mechanism to attempt to achieve this,” the South Australian Council of Social Service said in a submission to the South Australian government in July.

In its own submission, the Energy Efficiency Council told the South Australian government that it was possible that significant job losses could result from the changes to the scheme, particularly if it meant a slow down in investment in energy efficiency measures.

“If energy saving activities halt in South Australia for a period of 6 to 18 months it would result in major job losses at a time that the South Australian economy can least afford it, along with reduced savings being delivered to households. This is an outcome the Government of South Australia clearly wants to avoid,” the Energy Efficiency Council said.

To address some of the concerns, the South Australian government has issued refreshed targets under the rebadged scheme, which now extend out to 2025, with a fifth of each year’s energy savings reserved for priority households, ensuring the scheme is able to support a wide range of households to cut their energy costs, with priority targets for lower income households renters, households participating in hardship programs.