Enel X’s response to Australia’s new energy market rules
Enel X joined the Australian Institute of Energy’s forum to discuss the proposed Demand Response Mechanism rule change
Published on Wednesday, 2 October 2019
All eyes are on the Australian Demand Response market with new market reforms in the pipeline. In late July, the Australian Energy Market Commission presented its draft rule for a new demand-response mechanism. If passed, the draft rule will allow large commercial and industrial energy users to sell demand directly in the wholesale market in order to reduce overall demand at peak times. The implementation date is currently set for July 2022 however market players are looking at bringing the timeline forward.
On the back of this significant news, the Australian Institute of Energy (AIE) and the Victoria Energy Policy Centre recently organised a forum to encourage open discussion about the proposal and the influence this change will have on the demand response service providers (DRSP) market.
Taking place on August 26 at Victory University’s Central Business District Campus, the event attracted both suppliers and beneficiaries of DR services, energy users and other industry stakeholders. Enel X was invited to participate in the discussion to provide an aggregator’s perspective.
When the rule is implemented, Australia will see demand response play a similar role to generation where energy users will be paid as if they were generators. This sustainability progress will not only reduce emissions and prevent blackouts, but will also put downward pressure on wholesale prices.
The panel of speakers included Kedem Levy, Enel X’s Energy Flexibility Advisor, Rob Murray-Leach, Head of Policy at the EEC (Energy Efficiency Council), Victoria Mollard, Director at the AEMC, Violette Mouchaileh, Executive General Manager, Emerging Markets & Services from AEMO; and Craig Memery, Policy Team Leader at PIAC (Policy Team Leader at the Public Interest Advocacy Centre).
Levy and Murray-Leach discussed the impact of energy efficiency in terms of demand side capacity compared to other forms of generation. Enel X’s experience with Victoria Cold Storage, which has prioritised energy management, energy efficiency and Demand Response, was covered as a case study. According to Murray-Leach, a change in the rules is absolutely necessary to optimise and capitalise on the opportunities afforded by DR.
The panel was chaired by Stephanie Bashir, CEO and founder of Nexa Advisory, and Bruce Mountain, Associate Professor at Victoria University and head of the Victoria Energy Policy Centre, opened the proceedings and fielded questions from the audience.
It was agreed that in the long term, the ideal solution is to create a two-waymarket that is open to both the supply and demand side, where everyone can participate. Enel X’s DRSP approach was shared by Levy, focuses its clients’ interest in reducing their energy costs via DR programmes. The best strategy is to identify the numerous opportunities available to businesses to allow them reduce their energy load by supporting the national grid and earn revenue for doing so.
Today, Enel X has over 200 clients in Australia and New Zealand with a total of 390 MW of managed energy enrolled in programmes. All are managed by Enel X’s 24/7 national operations centre in Dublin. The clients are large energy users, ranging from data centres to warehousing and refrigeration companies, food producers, hospitals, universities and production facilities, all with a high level of flexibility.
Enel X has unrivalled market access for client programmes, from FCAS (Frequency Control Ancillary Services), where clients ensure the grid frequency never deviates from its normal operating 50 Hz, immediately curtailing load in less than one second for up to six seconds, to backup generator programmes and other grid and network support services.
When the FCAS market opened in 2017, Enel X’s client portfolio directly contributed to a 57% cost reduction in the raise market. This shows how quickly opening the market can impact prices, and how the DRM can have much more impact. Levy confirmed there is almost 2.5 GW of latent DR ready to be used once this rule change has been approved.
There is no doubt that the Australian energy market is becoming more electrified thanks to new market opportunities. With Enel X’s technological solutions, the energy of tomorrow in Australia is becoming cheaper and more sustainable than before.
Interested in finding out more about the solutions Enel X provides in Australia? Click here.