What is Demand Response?

At Shell Energy, we offer access to four types of Demand Response. Suitability and benefits of each program depends on your energy load and patterns, equipment and system automation, and response capabilities.

Many of our large energy customers access more than one program to maximise value. Get in touch with us today to find out how we can tailor the right Demand Response solution for your business.

  • Find out if your business qualifies to get paid to reduce energy use

  • Get started

The different types of Demand Response

At Shell Energy, we recognise that not all businesses can respond immediately to a Demand Response event. To help you understand what programs might work for your business, consider which of the following Demand Response capabilities applies to your business:

Frequent Response

Frequent Response is for large energy users that can respond within 30 minutes and on a regular basis (1-3 times per month). This means you will have automated systems that can very quickly adjust your energy consumption upon request.

Programs requiring frequent response, are:

    • Ancillary Services Demand Response (FCAS)
    • Wholesale Demand Response

Infrequent Response

Infrequent Response is for large energy users that can respond within 120 minutes – 2 days on an irregular basis (<6 per year).

Programs that require infrequent response are:

    • Emergency Demand Response (RERT)
    • Network Demand Response

Demand Response programs

Shell Energy offers eligible customers access to the following four types of Demand Response available in the National Electricity Market. Contact Shell Energy and we can advise you which programs are suitable for your business and the value that can be created from your participation.

Wholesale Demand Response

Under this program, your business will be asked to reduce energy taken from the grid, by utilising on-site generation or curtailing equipment when electricity prices are high to help relieve pressure on prices.

By reducing your demand, you will also generate new revenue and reduce your energy bill.

Occurs:
Year-round, but mostly from December to March

Frequency:
Moderate frequency, 5 to 20 times per year

Time of Day:
1pm to 7pm Australian Eastern Standard Time

Response Time:
<30 minutes

Emergency Demand Response

Emergency Demand Response, usually provided as part of the Reliability and Energy Reserve Trader (RERT) function, can be employed during peak demand periods to help combat the threat of blackouts caused by generation or network constraints and extreme weather events.

The RERT function is conferred on the Australian Energy Market Operator (AEMO) to maintain power system reliability and security. Your business may be called upon by Shell Energy, under its RERT Agreement with AEMO, to reduce energy usage during times of very high demand. As well as receiving payments, your participation can help to avoid costly power outages on the network.

Occurs:
Year-round, but mostly from November to March

Frequency:
Low frequency, 1 to 3 times a year

Time of Day:
9am to 9pm Australian Eastern Standard Time (min 3 hours / max 6 hours per event)

Response Time:
<120 minutes

Ancillary Services Demand Response

Australia’s electricity grid needs to have a frequency range close to 50 hertz (Hz) so that generators can operate safely.

The Ancillary Demand Response program is used by AEMO to prevent grid collapses (black outs) when system frequency deviates from 50 Hz. This calls for eligible businesses to provide a fast injection or reduction in energy to return the grid to its safe range.

Ancillary Demand Response is also known as Frequency Control Ancillary Services, or FCAS.

Occurs:
Year round

Frequency:
High frequency, 10 – 20 times per year

Time of Day:
When scheduled

Response Time:
<5 minutes

Network Demand Response

When the network is under strain, such as when power lines are nearing capacity, Network Demand Response requires your business to reduce energy use to help maintain network reliability.

Opportunities vary by State and the specific location of your electrical connection to the grid, so reach out to us to find out how you might participate in Network Demand Response.

Occurs:
Typically October to April

Frequency:
Typically <6 times a year

Time of Day:
Typically 11am to 8pm Australian Eastern Standard Time

Response Time:
120 minutes – 2 days

Woman staring at data on a screen

Automation and Controls

Participation in some Demand Response programs can require very fast response times. For example, with Ancillary Demand Response (FCAS), users are required to respond within six seconds to five minutes. This response time is only possible with automation and controls on your energy-intensive systems.

At Shell Energy, we work with leading controls and optimisation solution providers to automate and control your on-site energy consumption. When your systems are automated, your energy use can be automatically adjusted. This lets you take advantage of Demand Response opportunities.

We have paid our customers more than $8 million*

The Shell Energy difference

  • Engineering

    Our team of experienced engineers work with customers to improve energy productivity at complex sites by delivering feasibility studies and implementing automation to help you better manage your electricity demand and respond to energy events.

  • Environmental certificate creation

    We have been creating environmental certificates for our customers for over a decade. Certificates can help you recover some of your energy project costs and meet your sustainability targets sooner.

  • Retail electricity pricing

    Shell Energy is Australia’s largest dedicated supplier of business electricity, which means we know how our customers consume energy. We apply this knowledge to optimise your business’s load for efficiency and commercial benefit.

  • Automation and controls

    For Demand Response, we work with leading controls and optimisation solution providers to automate and control your on-site energy consumption.

Frequently Asked Questions (FAQs)

Demand Response programs involve large energy users reducing their demand for energy taken from the grid when requested to help maintain grid reliability. This demand reduction may occur by reducing use, or utilising on-site power generation such as backup generation, or discharging energy stored in batteries. Businesses receive performance-based payments for their participation.

Demand Response events are activated when there is significant pressure on the electricity system due to very high demand or supply constraints.

Demand Response events often occur during Australian summers, when power plant outages happen, when network lines are nearing capacity and/or when electricity prices are high.

  • Generate revenue
  • Meet test obligations for on-site generators
  • Contribute to a secure and reliable energy market

To be eligible to participate in Shell Energy’s demand response programs, your business must meet the following criteria:

    • Must be based in VIC, SA, QLD or NSW
    • Use over 3 GWhs per annum
    • Can reduce a minimum of 500 kW via load reduction, back up generation, storage or chiller plants
    • Can reduce electricity usage when requested
    • Capable of reliable participation with minimal or no disruption to everyday operations

Shell Energy will send a dispatch request to participating customers when demand response is required.

In some instances, participants will receive advance notice of the Demand Response event. Depending on the terms of the Demand Response agreement, customers may choose not to participate.

At the time of an event, a Shell Energy Demand Response customer will receive emails, phone calls and texts from us to alert them to the opportunity. To participate, the business may do one or more of the following to reduce demand on the network:

    • Switch off energy-intensive equipment
    • Change equipment operating hours
    • Switch to on-site back-up generators
    • Utilise battery storage.

If our dispatch system is integrated with your controls systems, we can manage your demand response participation remotely, so you never miss an opportunity.

After each event, we issue performance-based payments to participating customers. Payments can be made directly to you, or on your monthly Shell Energy retail electricity invoice.

5-Minute Settlement

On October 1 2021, electricity spot prices were changed to settle every five minutes, instead of every 30 minutes. This aligned the market price signals with the electricity network, which matches demand and supply every five minutes.

Shell Energy’s Demand Response program and automation technologies can help customers quickly respond to the new 5-minute market.

HVAC machinery

HVAC LoadFlex

HVAC LoadFlex helps you reduce energy consumption, create additional revenue streams and improve performance and environmental outcomes without the need to resort to more costly energy-efficiency strategies, such as plant upgrades.

Find out more

*Since October 2013, Shell Energy has paid over $8 Million (excluding GST) in Demand Response related payments to our customers. This includes Demand Response related bill adjustments and direct payments to customers.

Start generating additional revenue with Demand Response