What is Flexible Demand?
Australia’s electricity market has traditionally operated to vary generation output to balance supply and demand. This approach has been supported by more storage and greater infrastructure connectivity, the cost of which can be significant.
Demand flexibility offers a way to reduce the load on the grid during busy periods, reducing energy costs and lowering peak demand. It can be implemented in real time in response to market signals, generation shortfalls or network constraints.
Flexible demand is an increasingly viable alternative to network infrastructure and large-scale batteries, and can balance supply and demand more efficiently and cost-effectively. But this approach will require new technologies, market processes and ways of engaging with energy users.
Flexible Demand project ideas
To accelerate the opportunities offered by flexible demand, we are expanding our portfolio of projects that can provide new flexible demand capacity. We welcome project proposals that can provide new flexible demand capacity either through ‘load shaping’ or ‘load shifting’ to help align customer electricity demand with variable renewable energy supply.
If you wish to receive more information on our future activities in flexible demand, contact proposals@arena.gov.au.
How does it work?
Demand flexibility could be achieved through a number of sources, including:
- Orchestrating customer appliances such as water heaters, pool pumps and air conditioners to use abundant low cost solar during the day
- Managed electric vehicle (EV) charging to ensure they are charged by low cost, low emissions electricity and avoid extensive network builds to cope with coincident charging patterns
- Electrifying and controlling commercial and industrial loads such as heat pumps, electric furnaces and thermal storage for cold stores and commercial property
- Flexible hydrogen electrolysis operated dynamically in response to market signals, or abundance of renewable energy generation
- New retail commercial products such as energy-as-a-service, dynamic tariffs and demand-based market hedges
- Market reforms to integrate demand side resources to efficiently incorporate demand side flexibility into the future supply mix.
How are we supporting projects?
Our purpose is to support the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers. By connecting investment, knowledge and people to deliver energy innovation, we are helping to build the foundation of a renewable energy ecosystem in Australia.
Our portfolio of projects have demonstrated how demand flexibility can improve systems and market integration, enhance products and price signals, and empower customers. Whether it’s through EV smart chargers, home energy management systems, or demand response, our projects showcase how demand flexibility can transform our energy system.
Learn more
Report: Valuing Load Flexibility in the NEM
ARENA commissioned NERA Economic Consulting and Energy Synapse to model the potential value of flexible demand in the electricity transition.
Report: The Role of Flexible Demand in Australia’s Energy Future
As Australia continues to grow its share of renewable electricity generation, ARENA is looking at innovative ways to maintain system security and reliability.
Blog: How to Lower Energy Bills and Emissions with Demand Flexibility
Demand flexibility shifts energy use to save money and reduce strain on the grid.
Category: Demand Response (DR)
DR is the voluntary reduction or shift of electricity use by customers, which can help to keep a power grid stable by balancing its supply and demand of electricity.
What do we look for in projects?
Our Investment Plan has identified flexible demand as a key focus area under our strategic priority to optimise the transition to renewable electricity. To accelerate the opportunities offered by demand flexibility, we are seeking projects that can provide new flexible demand capacity.
We welcome proposals for projects that:
- involve ‘load shaping’ and/or ‘load shifting’ to align customer electricity demand with variable renewable energy
- demonstrate bi-directional flexibility in end-use customer loads and not rely solely on battery storage and/or solar curtailment
- demonstrate innovation in customer incentives that result in greater demand side participation in the energy market
- are capable of responding to minimum demand including in response to AEMO Minimum Demand Level 1 (MSL 1) market notices.
ARENAWIRE Blogs
How the IEA rates Australia’s energy transition
The IEA’s Australia 2023 Energy Policy Review commends Australia’s recent progress toward a sustainable renewable energy future but says a lot of work is still needed to complete the job.
Hydrogen FEED study forges ahead
A massive green hydrogen plant proposed for Gladstone in Queensland is one step closer, with Stanwell progressing to front-end engineering and design study.
Renergi installs innovative biomass pyrolysis plant
From start-up inception in 2012 to the verge of plant operation in 2023, ARENA has supported biomass-to-energy company Renergi along its renewable energy journey.
