Energy demand: How AEMO keeps us cool in summer heatwaves

AEMOAustralian Energy Market Operator (AEMO).

Australia is a place of extreme weather – from blazing hot summers to bitterly cold winters. But despite hot weather hitting every state in the nation this summer, the power grid still needs to keep supply and energy demand in balance.

That’s where the Australian Energy Market Operator (AEMO) comes into the picture. AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems. Because meeting demand is difficult in extreme conditions, AEMO sources extra power to keep the system up and running in emergencies.

When energy demand swamps supply: Australia Day Weekend 2019

The lead up to Australia Day Weekend 2019 saw heatwaves across the country, most notably in Victoria and South Australia.

Energy demand warnings issued by AEMO during January heatwaves.

AEMO issued major energy demand warnings during January heatwaves.

The dramatic weather caused energy demands to soar as air-cons cranked up to cool us down.

In response, AEMO issued its highest Lack of Reserve (LOR) warning. This notified the market of the need for more capacity.

Essentially, an LOR is a request for more power from the usual sources. Both Victoria and SA received an LOR level 3 alert, warning of a possible interruption of 39 MW maximum.

But when temperatures on January 24 and 25 closed in on 45 degrees, demand went through the roof.

Calling in the Emergency Reserve troops

AEMO then sent out a ‘Reliability and Emergency Reserve Trader’ (RERT) capacity call.

A RERT is a request from AEMO to large power and industrial players to cut back their electricity demands to free it up for use elsewhere, such as in residential areas.

A RERT call is issued only in extreme cases, such as the January heatwaves in Victoria and South Australia.

For example, on January 24 2019, AEMO entered into a RERT contract with the following companies to free up the amounts of power indicated:

The Australian Steel Company (Operations) – Victoria – 51 MW
Enel X Australia – Victoria – 30 MW
Paper Australia Pty Ltd – Victoria – 20 MW
Powershop Australia Pty Ltd – Victoria – 4 MW
SA Power Networks – South Australia – 210 MW
United Energy Distribution Pty Ltd – Victoria – 30 MW
Visy industries Australia Pty Ltd – Victoria – 20 MW

The use of RERT has opened up discussions around how renewable energy could be used in energy demand emergencies.

A new approach to energy back ups

There’s a strong feeling that there must be a faster way to respond to heatwave-type energy demand emergencies. Relying on gas or hydro is no longer sustainable, as they are usually running at capacity.

That’s why AEMO partnered with ARENA in 2017 to trial new sources. The goal: to create an innovative source of energy demand by testing “different demand response approaches and technologies across commercial, industrial and residential energy users”.

The trial bore fruit in just over a year, with three projects quickly responding to the RERT. The three-year trial funds 10 projects and it may be called upon again at the next major weather event.

Changing the market

ARENA says more and more industrial sources are able to respond to these energy demand alerts due to renewable energy.

The uptake of commercial solar, for example, makes managing a grid more flexible.