For the past eight years, Shell Energy has been helping customers contribute to maintaining a stable and balanced energy grid, while earning revenue through participation in our various demand response programs. As well as our traditional Wholesale Demand Response (WDR), Emergency Demand Response has played a key role in ensuring grid stability throughout the summer of 2021/22.
Emergency Demand Response is provided through AEMO’s Reliability and Energy Reserve Trader (RERT) mechanism. These emergency events typically occur during Australian summers, when extreme weather events affect supply and demand. Unplanned generator outages are common, and this sometimes coincides with increased demand on the grid. Emergency Demand Response is used to combat the threat of forced load-shedding during these peak demand periods. For business energy users in the NEM, a supply shortfall has the potential to drive higher wholesale prices, additional charges on energy bills and increase the risk of power outages.
When major events are forecasted, AEMO will issue Lack of Reserve (LOR)¹ warnings to alert the market that further capacity may be required. If the market risk continues to increase, AEMO will activate its RERT mechanism and call upon participating energy users to utilise reserve capacity.
The beginning of 2022 saw the NEM at risk of experiencing supply shortfalls, particularly in the Queensland region, due to high temperatures, constraints in the transmission network and several prolonged generator outages. These events placed significant pressure on the grid and on the AEMO to ensure demand could be met. As the risk continued to increase, on 1 February AEMO activated the RERT mechanism in Queensland. Once the RERT mechanism was activated, Shell Energy worked closely with customers in the Emergency Demand Response program to ease strain on the grid and minimise the risk of forced load-shedding by grid operators.
Through this RERT event in Queensland, Shell Energy successfully dispatched 93% of our contracted customer load demand response capacity over a 3.5-hour event period.
A large industrial manufacturer in the building industry earnt more than $500,000 in revenue for powering down in the specified 3.5-hour period on 1 February. This was the first RERT event the customer had participated in and it experienced no disruption or impact to regular business operations.
We engaged and guided the customer throughout the whole process, so they were informed of all market notices, changes to weather conditions and grid conditions, and received regular updates on the likelihood of a RERT event and potential event duration. Being a large industrial business, the customer discovered through Shell Energy’s tailored engagement model, that its demand flexibility was well suited to RERT.
This was due to two key factors:
Shell Energy works closely with customers to develop tailored operating procedures and engagement models that will work most effectively for each individual customer. We provide regular forecasting and market updates throughout the summer months to ensure participants have information that will help them put measures in place to successfully respond to any events called, with minimal disruption to business operations.
In 2021, every customer in Victoria, South Australia and Queensland that used over 4 gigawatt hours (GWh) per annum was engaged for the opportunity to participate in our Demand Response programs. In 2022, eligible New South Wales customers that use more than 4GWh per annum will also be included in our engagement process.
At Shell Energy, we offer access to a number of different Demand Response programs. Suitability and benefits of each program depends on your energy load and patterns, equipment and system automation, and response capabilities. Learn more here.
Many of our large energy customers access more than one Demand Response program to maximise value. We encourage you to contact us today to find out how we can tailor the right Demand Response solution for your business.
For further information, contact Jai Jagasia on (03) 9214 9395 or visit shellenergy.com.au/energy-solutions/demand-response.
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