Demand side participation provides a tool for customers to actively participate in the energy market, by offering options for them to manage their electricity consumption and, in turn, their electricity expenditure.
These techniques are available to customers of all sizes. Larger commercial and industrial customers may install their own energy generation supplies, undertake energy efficiency activities or negotiate arrangements to curtail their demand at peak usage times for incentive or energy cost benefits.
Similarly, smaller customers including residential and small business customer may undertake activities such as energy efficiency (eg replacing light bulbs, reducing standby power), peak demand shifting (eg moving energy use to off-peak, cheaper time periods), reducing consumption, and generating their own electricity (eg installing solar PVs). Information to customers on the availability and impact of such actions is critical in supporting effective customer energy management.
Network companies consider demand side participation options to be an alternative to network expansion. Networks need to build to meet the maximum demand on the network, for example demand on the hottest day of the year. Demand side participation options such as distributed generation, agreements with energy users to curtail energy use at peak demand time (in return for an incentive payment or discount) can delay or cancel the need for a network investment.
Network companies are keen to ensure that demand side options can be used where they provide a commercially sound and sustainable option as part of the network planning and investment process. ENA supports changes to the current demand management and embedded generation incentive scheme in the National Electricity Rules to implement this objective.
- Incentives for network driven DSP, PWC Report for ENA, October 2012