The Australian Renewable Energy Agency (ARENA) and the NSW Government will commit $15 million in funding for a demand response pilot.
ARENA will provide grant funding to support tech development costs associated with demand response projects.
The demand for electricity goes up in summer months, due largely to air-conditioning, which strains the grid.
The NSW Government will commit $7.5 million in funding, to be matched by ARENA.
This brings the total ARENA funding for its demand response competitive round to $30 million.
Demand response funding: $37.5 million over 3 years
NSW Minister for Energy Don Harwin said that this pilot showed that energy security is a key priority.
“We need national market reform through the Finkel Review to secure a clean, affordable and reliable energy future. Part of that is reforming the market so we have smarter ways to ensure security, and this pilot will help accelerate the case for national reform.”
This expands the summer demand response pilot program to a total of $37.5 million in funding over three years.
This competitive funding round is a joint initiative with ARENA and the Australian Energy Market Operator (AEMO).
The aim is to reduce demand on extremely hot days or during emergencies, avoiding unplanned outages.
This $15 million funding pool will be reserved for NSW projects, with the aim to generate 6,070 MW of demand response capacity for peak days and emergencies.
ARENA has previously committed up to $22.5 million over three years in grants to trial demand response technologies and models.
It will now allocate the original $22.5 million to projects outside NSW. The aim is to provide approximately 100 MW of demand response in the National Energy Market.
Energy Security Taskforce identified power ‘spikes’
In May, the NSW Energy Security Taskforce in its initial report identified that extreme weather can create spikes in demand.
The Taskforce recommended the NSW Government take precautions during energy emergencies and to reduce demand during peak periods.
ARENA and AEMO’s pilot program to trial demand response is endorsed by Chief Scientist Alan Finkel in his report.
The competitive funding round for applications to be part of the pilot program will close on July 17, 2017.