The Australian Renewable Energy Agency (ARENA) has provided $864,000 to assist AGL Energy develop and trial a new price intensity tool to help energy users better time the energy consumption with peak renewable generation.

The two-year trial, beginning early 2024, will help big energy users maximise storage or shift electrical loads to times of high generation, when energy is cheap and renewable. The trial will initially recruit four Melbourne-based customer sites and utilise their price intensity forecasts to manage energy loads, freeing up around 25MW of combined flexible load which can be used to ease pressure on the energy grid.

The $1.78 million project will provide Melbourne Airport, a major supermarket chain, a warehouse and logistics company, and a water utility company with 30 minute pricing updates based on solar and wind generation forecasts and thermal generator availability over a seven-day period. Together these sites offer up a potential of 385MW load management across the National Electricity Market (NEM).

The price signals will help the organisations better plan their energy use, ratcheting it up when prices are low due to abundant renewable energy and down when prices are high.

By responding to the price signals, the four customers could cut their energy costs and free up about 25MW of ‘flexible load’ capacity during the trial, which will deliver broader benefits to the electricity system.

Shifting demand away from peak times and reducing demand at critical times can complement energy storage and reduce the overall cost of energy and support integration of more renewables into the grid.

A report conducted by ARENA, The Role of Flexible Demand in Australia’s Energy Future, identified potential sources of demand flexibility that included new retail and commercial products such as energy-as-a-service, dynamic tariffs and demand-based market hedges, as well electrification and control of commercial and industrial loads such as heat pumps, electric furnaces and thermal storage for cold stores and commercial property. AGL’s project will look to address these sources of demand flexibility. 

To enable sites to respond to the tool, trial participants will develop and implement hardware and software modifications to the energy management systems at their respective sites. 

Assistant Minister for Climate Change and Energy, Jenny McAllister, said the innovation could have widespread benefits for major energy users.

“The Federal Government is investing in technology that will allow energy users to lower energy costs, by drawing on the grid when renewables are at their most abundant,” Ms McAllister said. 

“Tools like this can provide big energy users the price signals they need to optimise the use of their energy, an important step as we become a renewable energy superpower. 

“Small changes to energy usage by individual companies can make big differences by easing pressure on the grid, increasing the availability of renewable energy and putting downward pressure on energy prices.”

ARENA CEO, Darren Miller, said flexible demand offers a viable solution to the evolving requirements of the electricity grid.

“Unlocking flexible demand at commercial and industrial sites can free up electricity capacity at times of high demand and consume electricity when renewable electricity is abundant. This will help us create a truly smart, adaptable and efficient energy grid,” Mr Miller said. 

“Through AGL’s trial, the development of the price intensity forecasting tool will help to reduce barriers for industry to take up renewable energy, shifting usage to times which can lower power bills and reduce strain on the grid. We look forward to seeing the end results of the project which will assist other sectors in their own energy transition.”

AGL Chief Customer Officer, Jo Egan, said the two-year project with support from ARENA will allow AGL to assess the implications of dynamic flexible loads on energy pricing and the potential benefits of load flexing. 

“Flexible demand projects like this enable AGL to develop our technological expertise in harnessing renewable energy while also exploring novel ways to reduce customer costs. We look forward to sharing the knowledge of the trial with ARENA and our participating partners to optimise the transition to renewable energy.”

AGL’s price intensity forecasting tool commences with the development of the software and hardware in early 2024, with findings to be shared mid-2025.

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