With Australian energy prices soaring, demand flexibility mechanisms can help businesses navigate the minefield of a highly volatile energy market, writes Lisa Balk, sales director at GridBeyond.
Australia is on the way to achieving its net-zero emissions target by 2050, which will largely be driven by transitioning to renewable energy sources from thermal generation. While this progression is encouraging, it presents several challenges along the way.
Recently, the world has experienced an uncertain investment environment, as well as high energy demand, extreme weather events and surging international fuel prices, which contributed to the unprecedented suspension of the spot power market by the Australian Energy Market Operator (AEMO) in June 2022.
These events show the importance of long-term planning for our transition to net zero.
Renewables are already making a solid contribution to Australia’s energy mix, comprising more than 30 per cent of the nation’s energy, with the potential to be 50 per cent by 2025. As an energy source, renewables are effective, however they can be unpredictable and, at present, are an intermittent power source.
If Australia is to decarbonise and meet its net-zero targets, digitalisation and technologies that enable flexible assets – on both the generation and demand sides – will be crucial.
While Australia is in the throes of an energy crisis, the positive news is we are not alone in preparing for a future dominated by intermittent renewables. By working with local and global companies we can strengthen our planning and execution of the transition more effectively.
Australia is a market with very strong fundamentals for the long-term success of demand flexibility services where electricity consumers highly value any services that protect them against the high volatility of market prices by creating increased cost savings and additional revenues.
By participating in attractive grid services such as a frequency control ancillary services (FCAS) market, Australian businesses can find relief from the volatile energy market.
The energy market operator uses FCAS as a process to maintain the frequency of the system within the normal operating band of around 50 cycles per second. Essentially, FCAS provides a fast injection or fast reduction of energy to manage supply and demand. These services are facilitated by AEMO to maintain frequency and ensure the stability and reliability of the grid.
Another opportunity for Australian businesses is a wholesale demand response mechanism (WDRM), where businesses can be incentivised to minimise energy usage during peak periods which is usually most attractive when energy prices peak and electricity supply is scarce. This assists in reducing costs and aids in relieving pressure on the grid.
Businesses can earn revenue by being paid spot pricing for energy avoidance. This can be quite attractive for companies with fixed prices. With the current surge in energy prices in the Australian market, companies are seeing up to $15,000/MWh in savings.
Founded in Ireland more than 15 years ago, GridBeyond now operates in the US, UK, Japan and most recently Australia. Supporting in excess of 450 customers globally across 550 sites, the company is a trusted business partner of many established global brands.
We support companies to navigate and optimise their participation in FCAS and WDRM in all industries where energy consumption is high, and can identify load flexibility within their processes. A significant proportion of the company’s current clients are in cold storage and refrigeration, aggregates, mining, milling and pulping, and glass industries.
GridBeyond currently has a portfolio of more than 1400MW, with 700MW of flexibility under management. In addition, we have 200MW of batteries under contract, and a virtual 80MW battery unit operating with the UK’s National Grid for more than four years.
The company’s services accelerate the uptake of renewable generation by facilitating revenue streams for demand side energy users and front-of-the-meter asset developers alike, facilitating low-carbon practices and supporting the delivery of a less carbon-intensive grid system.
We use machine learning and AI-powered technologies, driven by data science, that enable commercial and industrial (C&I) businesses to participate in a wide range of grid programs that not only bring new revenue streams and cost savings to help businesses mitigate against price rises, but support the grid by ensuring power supplies remain secure for consumers in increasing a renewable drive-power sector.
By providing AI-powered demand response, virtual power plant (VPP) services, and generation and storage asset optimisation services, it allows C&I customers to play into Australia’s National Electricity Market.
Companies participating in demand side response in Australia are usually required to shut down their whole site for a short period to meet the requirements of the FCAS scheme. This achieves the mandatory requirements to participate in FCAS, but at significant cost. Shutting down and restarting an entire site is problematic and has the potential for short-term and long-term effects on production, efficiency, delayed restart time, and possible damage to assets.
GridBeyond’s AI technology allows the identification and isolation of assets within the production process for temporary shutdown which prevents the need to shut down an entire site. This allows production to continue, minimises potential damage to assets, and does not affect critical loads.
The FCAS and WDRM markets in Australia are very similar to Ireland. With our leading expertise and the evident parallels in our markets, GridBeyond is bringing our unique and exceptional expertise to Australian businesses to manage their flexible energy resources and co-optimise them with wholesale trading.