New South Wales transmission operator TransGrid says it has opened a tender process to procure at least 40MW of demand management solutions in Sydney’s CBD, which it says could defer more than $236 million of network investment.
The 40MW of demand management – usually the ability to reduce a load or switch off non-essential items at times of peak demand – will likely cost just a fraction of the $236 million in network investments.
It is a sign of things to come. The Australian Energy Market Operator favours it as a major tool to deal with peak demand events in the future, and to add to the flexibility of the grid. The Energy Security Board has also embraced it.
Traditional generators hate the idea. Peak demand events is usually when they make most of their money, and they don’t want to see that opportunity reduced or eliminated with some new fangled smart technology.
Snowy Hydro CEO Paul Broad, trying to justify the huge investment in Snowy 2.0, has described demand management as “enforced blackouts”, and the Murchoch media and the Coalition back bench has run with that image. Broad also doesn’t like battery storage for the same reason.
Transgrid and other networks, however, think it is a good idea, particularly since the Australian Energy Market Commission moved into the 21st Century and finally approved rule changes that would encourage networks to do clever and cheaper things, rather than simply building more poles and wires and sub-stations, and endlessly replacing and upgrading them.
Transgrid says its issues in the Sydney CBD is being able to reinforce the power supply to the inner city as cables supplying the area reach the end of their technical life and need to be retired.
It says it can defer investment in a new 330kV cable construction by procuring a variety of demand management solutions to reduce the risk of “unserved energy” to consumers in Sydney as existing infrastructure reaches the end of its serviceable life.
And TransGrid’s Energy Services Manager, Rachele Williams, says the pre-tender response has been encouraging.
“We have seen a very strong response from non-network proponents in our early consultation, and there’s a lot of potential for deferring the commissioning of network infrastructure through the use of non-network solutions,” Williams said in a statement.
“In particular we’re interested in non-network solutions to manage electricity demand to reduce risk in inner Sydney during summer heatwaves.
“We’ve seen a range of options from renewable generation, load curtailment, demand response, and battery storage solutions.
Williams said that this could be one of the largest capital expenditure deferrals by non-network solutions in Australia to-date.
They are not the only ones to look to other options for inner-city Sydney. Ausgrid recently announced incentives to encourage more rooftop solar in various parts of its city network for the same reason – to help defer investment in new substations. It said this was clearly the cheapest option.
TransGrid’s tender process will run in two stages, allowing flexibility to procure more demand management should demand forecasts or cable conditions change.
The first stage is seeking 20MW for this coming summer, and 40MW for the next three summers to 2021/22. Prospective tenderers can find more information at https://www.tenderlink.com/transgrid/.