Topic 8: Distributed Energy (DE)

Question 1

Demand Side Management (DSM) (or Energy Demand Management or Demand Side Response) and its DRIVERS

Answer 1

Any activity to reduce consumer energy demand including energy efficiency, demand response, distributed generation/storage, financial incentives, behavioural change through education, etc.

Drivers of DSM:

• Environmental - increased EE and decreased GHG emissions
• Network - reduced demand increases network reliability and reduces need for augmentation
• Market - short-term responses to electricity market conditions eg reduce load during peaks
• Security - DSM can provide frequency, voltage services.

Question 2

Demand Response

Answer 2

• Price-based (usually) response to consumer energy demand
• Curtailment = reduction in the output of a generator from what it could produce given available resources
  
  • Some loads can be foregone if benefit supplied < cost of provision
• Load-shifting = shifting energy demand to another time period, usually when prices are lower
  
  • Either load is time flexible (e.g. clothes washing) or has inherent storage (e.g. charging phone)

Question 3

Distributed Storage

Answer 3

• Allows consumers to change load profile without changing behaviour
• Battery storage is currently not cost-effective (and likely won’t be for some time)

Question 4

How to harness DR/DS

Answer 4

• Tariffs (i.e. price signals) → ToU, CPP, Real time
• Direct control → sign a contract with DR aggregator or a network to allow direct control (with or without notice)
• Market → distribution market under discussion by AEMO/AEMC

Question 5

Barriers to DE

Answer 5

• Customer exposure to wholesale markets = ideal market efficiency
• Lack of transparency in metering and tariffs makes this hard i.e. no price signal
• Cost of information and technology means small customers struggle to participate in the market
• Consumers like having intermediaries (e.g. electricity retailers)
• Market failures
  
  • End users do not have the skills/background to make rational decisions i.e. lack of education
  • Costs of participation exceed benefits for small consumers i.e. lack of equal access to funds
  • Managing market risk requires specialised information i.e. lack of equal access to information