Demand response allows electricity consumers to respond to a signal from an organisation, like Transpower, to reduce their electricity demand for a period of time in exchange for a payment. It’s a win-win situation where consumers get compensated for their involvement and see lower charges long term, while helping Transpower manage demand on the grid.
Early trials: 2007-2010
Transpower’s involvement in demand response started in 2007. We carried out a trial in the upper South Island, proving demand response was a reliable option as a transmission alternative. However, at the time there were very few consumers with the technical ability to provide demand response into our programme, which resulted in high prices. This situation was confirmed when we sought 60 MW of demand response in the upper North Island in 2010.
A growing alternative: 2011-15
Our initiatives since that trial have focused on growing demand response as a power system resource by removing barriers for participation. In 2011, we purchased a Demand Response Management System (DRMS) to allow our programme to scale to a meaningful size. Previous initiatives were manually coordinated and created limits in the number of organisations that we were able to deal with. The DRMS effectively removed that barrier by automating many of the communication, verification and coordination functions required in an operational demand response environment.
The operational effectiveness of the DRMS was confirmed in 2013. When our programme commenced that year, interested participants registered 134 MW of demand response. By the end of that year’s programme, more than 200 MW was delivered in our largest demand response so far. That event was in the Auckland region and represented approximately 16% of peak demand in the region. While the 2013 programme was considered a success, it highlighted areas for future development.
Proving future capability: 2015-20
From 2015, our five-year programme targets geographic regions where we think demand is likely to be constrained in the future. Our programme aims to establish a proven capability in time to meet the needs of the power system.
We’ve also focused on developing our understanding of how the programme can work for campus-based organisations (like hospitals and universities) which commonly have backup generation installed already. Currently we have several hospitals and a university registered to participate.
Other key energy consumers in our investigation have included the agribusiness industry (in particular, irrigation and dairying operations) and the early-adopter group who are actively using batteries to store generated energy.
Our current programme extends until June 2020, with contracts being awarded for periods within each financial year with options for extension.
Case Studies
Wade heard about the Demand Response Programme and realised his store could probably be part of the programme.
“I completed the Request for Proposal forms during a Registration Cycle”, Mr Brown said. “It wasn’t complicated but it did require me to have knowledge about my peak demand, average power use, and how kilowatt hours (kWh) fit into the picture.”
“After the Registration Cycle finished, Transpower were in touch to let me know my business had made the cut.”
Timaru District Council – Waste Water Treament Plant
“We first heard about the Programme when we read about it in the newspaper. We hadn’t been involved in anything like this before, but it was easy to see the value for us. We have to run our generator on a frequent basis to make sure it’s always ready, and with this scheme we actually get paid to do this – so it’s really good for us.
“We don’t use the App, so we rely on email. In the morning if there is a request, an email pops up and if we are available to run the generator in the period when the grid requires power, I respond. During the day we always have people on site, monitoring the plant, so it’s almost always easy to manage it.
Nelson Marlborough DHB – Nelson Hospital
Nelson Marlborough District Health Board (DHB) installed powerful new generators at Nelson Hospital in 2009 – and part of the business case was the potential for revenue generation. David Francis, Energy Specialist for the Nelson Marlborough DHB, said that any measures to generate additional revenue flow ultimately benefits patients.