Last week, United Energy and Melbourne smart energy start-up GreenSync announced they were partnering on a ground-breaking project that would leverage community solar, battery storage and demand management technologies to address problems of network constraint on Victoria’s Mornington Peninsula.
The five-year project, which will receive a $554,886 state government New Energy Jobs grant, is considered a “watershed” moment in the evolution of the Australian grid. And that’s because it features a traditional network company leveraging non-network solutions to fix an age-old grid problem that used to mean only one thing: more poles and wires.
Indeed, the Community Grids Mornington Peninsula project – which, as the name implies, will work with the community to overcome the popular tourist area’s issues of electricity supply constraint during the peak summer months – is expected to save United Energy around $30 million in avoided network investment.
But what will this mean for the households and businesses involved? What are the benefits to the community and consumers in general? What even is demand response? And does it mean forfeiting control of the air-con, just when we need it most?
GreenSync’s job is, as they explain it, to engage and incentivise households, small businesses and community organisations throughout the region. Their aim is to help them reduce and/or shift 11MW of energy demand at peak times through the use of solar PV and battery storage systems. Local utilities and other larger commercial and industrial operators will also be incentivised to control their discretionary loads.
This will be done at pilot scale at first, starting this summer with the installation of two battery systems to be coupled with solar PV at community centres, and up to 250 Demand Response Enabled Device (DRED) control units in households across the Peninsula.
Ultimately, the project – which will kick off in earnest over the summer of 2017-18 – will involve 5,000 households and businesses and potentially install thousands of battery storage and solar systems and DRED control units.
For GreenSync, this will be done via its PeakResponse Units (pictured below), installed at customer sites. As the website explains it, examples of equipment connected to the GreenSync Cloud through its PeakResponse Units include pumps, air compressors, standby generators, electrical battery storage systems, mineral crushers, metal furnaces, chillers, fans, freezers and lighting systems.
DRED – not as bad as it sounds…
For the participating households, the installation of DRED units will mostly mean that their air conditioners – switched on by the thousands during the peak holiday season – can have their power remotely optimised or their use sequenced to lower peak demand when the grid is under stress.
But as GreenSync managing director and co-founder Phil Blythe is keen to point out, the goal is for this to be done without reducing comfort – and mostly without anyone even noticing.
“Most consumers won’t even notice the difference, except for the very rare occasion where they may be on the verge of a blackout,” he told One Step on Tuesday.
At those rare “critical peak” times, “it’s either the whole system goes down, or we just start adjusting your air conditioner.”
How does it work?
Here’s how an industry insider explained demand response to One Step, using an analogy with air travel…
“Has this ever happened to you? After arriving at the airport, clearing security and heading to the departure gate, an announcement is made that your flight is overbooked. At least one, and possibly a few passengers will need to take the next flight.
When this occurs, there are usually two options available to the airline: 1) send an extra plane; or 2) offer passengers an incentive to be ‘bumped off the first flight’.
Option 1 seems ludicrous; surely the cost of sending another plane is prohibitive for just a few passengers.
In option 2, the airline offers the ‘bumped’ passenger compensation for opting to take the later flight – often in the form of a business class seat or a night in the local five-star hotel.
This is a really cost-effective solution for airlines to achieve the most efficient outcome. NB: It’s important to remember that this is an extremely rare occurrence.
Electricity markets should operate in exactly the same way: the market is ‘overbooked’ or extremely peaky for a very finite number of hours in the year.
When this peak event occurs there are the same two options: build additional network, or incentivise customers to use less energy during the short peak demand period.
It’s clear and it’s open and it’s out there. The asset exists in the NEM and it’s dormant.”
Clever analogies aside, Blythe – who has worked on numerous community-based demand management projects – says it’s a pretty easy sell to Australian communities.
“It’s a matter of, if we don’t do anything here, we’re going to have to invest tens of millions of dollars in more poles and wires,” he told One Step at GreenSync HQ in Melbourne.
“We can do that, or we can start diverting that (capital) into battery storage systems or helping you put in smart devices in your home, that allow you to participate and help manage the grid as a community.
“The community spirit now in Australia around mobilising, or doing anything around distributed energy, is really strong,” Blythe said.
“It doesn’t take much of a push for people to say ‘hey yeah that’s a great idea, we want to participate’. If the community feels they’re part of actually solving a problem, they’re very much willing to participate.”
And once people understand the solution will also save them money – not just through energy efficiency, but through lower bills thanks to reduced network expenditure – well then you’ve really got them on board.
“We can provide some financial relief back to households, back to businesses, inside that local community. The power of showing that we are diverting money into the local community is one of the most important parts of it.”