A landmark trial is investigating how flexible management could play a pivotal role in navigating the challenges of household energy resources.
The Australian Renewable Energy Agency (ARENA) has announced it will contribute $6.2 million in funding to SA Power Networks’ $13.8 million Energy Masters project, unveiled in May 2024 in conjunction with the South Australian Government.
The Energy Masters project will trial smart, flexible energy management in 500 South Australian households, optimised by a HEMS (home energy management system), in an Australian first demonstration of aggregated flexible demand in residential settings.
The CER challenge
As customers move to further electrify their homes and transport, demand on the electricity distribution system could double by 2050. Concurrently, the increased integration of renewable energy sources into the electricity grid presents a challenge for traditional methods of generating, dispersing and storing energy.
Consumer energy resources (CERs) are set to play a crucial role in the energy transition. CERs are consumer resources that generate or store electricity and include flexible loads that can alter demand in response to external signals, such as rooftop solar, batteries, and electric vehicles (EVs).
A report from the Energy Security Board, Consumer energy resources and the transformation of the NEM, said, “The next decade presents an opportunity for Australia to harness the potential of CER to support the decarbonisation of Australia’s energy systems. With more weather-dependent renewable generation in the market, CER will play a crucial role in helping balance fluctuations in energy demand and supply. CER can help deliver a more reliable and secure energy system at lower cost for all consumers and contribute to a lower emissions energy sector if they are an integrated part of the energy system.”
The Energy Masters’ trial of demand‑side flexibility technology is designed to enable customers to better optimise their in-home energy use, while supporting the needs of the grid at certain times. ARENA has estimated that demand-side flexibility presents an opportunity to avoid between $20 and $30 billion in generation and network investment across Australia, which will in turn reduce the costs passed through to customers.
SA paves the way
South Australia is leading not just Australia, but the world, in its uptake of renewable sources. ElectraNet, the state’s transmission operator, reported in March 2024 that wind and solar accounted for 75 per cent of local demand supply in the past 12 months – the highest rate of incorporation in the world. As a result of this achievement, the South Australian Government has made ambitious targets of 100 per cent net renewable energy by 2027 and net zero emissions by 2050. However, to reach this target, South Australia will require significant investment in new renewable sources.
The Energy Masters trial is designed to reduce the amount of additional generation, network and storage capacity needed to meet this target, in turn reducing costs passed through to customers. Beginning with 500 households, the trial also aims to demonstrate the benefits of a collaborative approach between customers and industry to drive demand flexibility and smart electric homes.
The key components of the pilot are:
- Installation of a HEMS and efficient electric appliances with dedicated subsidy support
- Development and trial of new retail energy offers and demand flexibility technologies
- An 18-month research program exploring technical, policy and behavioural challenges and opportunities
- Utilising the information gained from the trial to inform the design of interoperability standards and aid the future scale-up and national adoption of two-way demand flexibility
Participating households will have access to appliance subsidies, simple retail offers from partner electricity retailers, and a smart home energy management system to optimise their home energy use. Subsidies will be available for smart split-system air‑conditioners, heat pump hot water, and smart EV chargers.
Households will also be provided with a HEMS to enable optimisation of their home energy use. In return, households will participate in research that aims to demonstrate the value of energy-smart households and a simple, reliable and cost-effective way for all South Australians to become masters of their energy use.
Flexible demand
The Australian Energy Market Operator (AEMO) has predicted that mainland regions in the National Electricity Market (NEM) and Wholesale Electricity Market (WEM) will experience daytime minimum operational demand that exceeds minimum voltage thresholds within the next five years.
ARENA has identified flexible demand as being central to Australia’s renewable energy transition and mitigating these issues. But what does flexible demand mean?
Demand flexibility is the capacity of demand-side loads to change their consumption patterns according to energy availability and cost. Demand flexibility can help make electricity more affordable by helping customers use less power when prices are high and discharging CERs when demand reaches a peak.
In its report, The Role of Flexible Demand in Australia’s Energy Future, ARENA identified the key ways it planned to further develop flexible demand uptake in Australia. These included:
- Demonstrating the potential value of flexible demand to the electricity system, including through the avoidance of additional network and storage build costs
- Demonstrating the technical and commercial viability of a range of novel flexible demand options, including managed charging of electric vehicles, flexible operation of hydrogen electrolysers, and other load shifting technologies in industrial, commercial and residential settings
- Integrating and orchestrating novel sources of flexible demand and supporting infrastructure and services, such as demand management systems, dynamic operating envelopes and virtual power plants
- Supporting projects and knowledge sharing that will inform the regulatory framework on flexible demand, and support two-sided markets
ARENA Chief Executive Officer, Darren Miller, said the Energy Masters project would demonstrate the value that flexible demand can offer households in a market saturated with renewable energy.
“South Australia has led the world in terms of variable renewable energy penetration, so it’s a perfect setting to trial how flexible energy use can complement a high share of renewable generation,” Mr Miller said.
“We’re working with SA Power Networks and the South Australian government to trial the coordination of CER in a real-world setting while unlocking value for participating households and look forward to seeing the outcomes of this trial and how its findings can be replicated across Australia.”
Home energy management systems
One of the key features of the Energy Masters trial is the inclusion of HEMS. HEMS are essentially systems comprising both software and hardware that are programmed to monitor and manage energy consumption, generally via a smartphone app or a website
HEMS can be used and configured to meet individual energy needs, such as turning appliances on or off remotely, programming devices to run at certain times and offering customers real-time information on their energy usage.
HEMS are also designed to help energy consumers to save both energy and money. By offering a single, centralised system through which to manage a customer’s portfolio of CER, HEMS can help to ensure customers only use the electricity they need at the cheapest price.
Federal Minister for Climate Change and Energy, Chris Bowen, said, “Household energy upgrades can make a huge difference to household bills – we’re thrilled to be investing in South Australia on another project to ease the cost of living. Managing and coordinating energy use is critical to getting bang for buck in the household and across the grid – this project is about unlocking bill-saving technology for more households.”
HEMS can manage a mix of appliances, like solar PV, air‑conditioners, battery storage, hot water systems, pool filtration and sanitation equipment, electric vehicles and more. The more appliances added to the system, the more flexible energy usage options become.
With time of use and demand tariffs already available in the market, a HEMS can use the differences in pricing to alternate between self-generated and grid-supplied energy depending on the lowest cost to the consumer.
The option to automate certain appliances and processes further minimises energy consumption and cost. HEMS can turn on lights, set air temperature or open an electric garage door according to customer needs. HEMS can also be linked to Google Home, Alexa or other similar systems for voice activated energy management.
Positive partnerships
The South Australia Government and SA Power Networks have partnered for the project, with the government to lead household engagement and recruitment as well as providing higher subsidies for low-income and energy hardship households to participate in the trial
SA Power Networks will contribute $2.8 million to the initiative. The project will also unite a unique group of industry partners, including ARENA, retailers and technology innovators, to drive the reach and success of the program.
Electricity retailers EnergyAustralia and Amber will develop tailored retail offers designed to help participants to maximise the benefits of retail and network flexibility.
Other project partners include:
- Research Partner: RACE for 2030
- HEMS Technology Partner: Clipsal Cortex
- Installation Partner: MAC Trade Services
- Energy Retail Partners: Amber Electric and EnergyAustralia
- Delivery Partner and Finance Provider: Plenti
In return for participation in the trial, households are required to take part in a research program, led by RACE for 2030, that will report on the value of energy-smart households and garner valuable insights and information about device interoperability to inform the development of national standards.
SA Power Networks said that the research also aims to demonstrate the value of energy-smart households and a simple, reliable and cost-effective way for all South Australians to become masters of their energy use.
Households will be carefully selected by the project team to make sure the research is representative of as many South Australians as possible.
Places will be set aside for low-income and energy hardship households to participate in the trial, with higher subsidies available for those households.
Expressions of interest for Energy Masters will open in the second half of 2024, with the project due to run until 2027.
Image credit: alexgo.photography/shutterstock.com.
