Energy Education: What is Demand Response?

Hi, my name is Charlie Lange and I work as a Trading Integration Analyst at Shell Energy.

Welcome to our Energy Education video series, where we answer questions about Australia’s energy market and grid. Today, I’ll be answering your questions about Demand Response. Thanks for having me!

Q: Can you explain what Demand Response is?

So, Demand Response is basically a way to help keep the electricity grid stable— especially when demand is really high.

It works by encouraging energy users to cut back on their electricity use during those peak times. That could mean switching to on-site generation or batteries, powering down some equipment, or even shifting energy use to a different time of day.

And when lots of energy users do this together, it can have a huge impact. It helps balance supply and demand and can even prevent blackouts.

Plus, there’s a financial incentive—they can actually get paid for participating in certain demand response programs.

Q: How does Demand Response work?

It’s a pretty straightforward process.

First, Shell Energy will identify a period when the balance of demand and supply could be tight, which could result in a surge of electricity prices.

We then coordinate with our customers who are part of our demand response programs to reduce their energy use during this time.

Customers reduce their energy use either automatically through smart software systems or manually on-site.

After the energy reduction is confirmed, we verify the customer’s efforts and compensate them according to the terms of their contract.

Q: What are the benefits of Demand Response?

There are quite a few!

For the grid, it’s all about stability. Reducing or shifting demand during peak times helps avoid blackouts.

For our customers, it can mean lower electricity bills during those high-price periods, and the potential to earn some extra revenue.

Q: What does Demand Response have to do with renewable energy?

Great question.

In Australia, we’re seeing more and more renewable energy coming into the grid, which is fantastic—but it also brings some challenges.

This is because renewables like solar and wind can be a bit unpredictable – due to their dependence on weather conditions.

Demand Response helps balance out those fluctuations and makes the grid more flexible and resilient. So, it’s actually a key part of supporting the transition to a cleaner energy future.

As you can see – Demand Response is a really important tool in today’s energy world. It’s cost-effective, it helps keep the grid stable, and it gives businesses a chance to save money and even earn a bit extra.

And that’s all for now, thank you so much for joining me for this episode of our Energy Education series!