INDUSTRY ATTITUDES AND BARRIERS ____________________________________28

Sector / load

Residential hot water Residential swimming pool pumps Residential air conditioning Commercial HVAC Total

Coincident with peak demand Emergency FD resource Market participation FD resource

(MW Shed) (MW Shift)

Built environment 450 170 6,900 1,500 9,020

450 170 970 190 1,780

Coincident with minimum demand Indicative estimate only

(MW)

4,900 450 970 190 6,510

Other (non-coal) mining1 Food, beverage & tobacco manufacturing Other transport, services & storage Water, sewerage & drainage services Agriculture, forestry & fishing Total (32% industry consumption) Industrial unknown unknown unknown unknown unknown 1,044 224 22 83 140 1,511 unknown unknown unknown unknown unknown

1 Given the size of loads involved in this sector, it is assumed that these FD resources are already participating to the extent that they are cost-effective and able to participate.

There are several other FD resources that could also put downward pressure on consumer electricity bills, but are outside the scope of this opportunity assessment. These are largely addressed by other RACE for 2030 research programs. They include:

• standby generators (mainly diesel): ~2000 MW (but possibly included in the table above) • batteries: 5000 MW by 2025 (AEMO) • electric vehicle battery management • voltage tapping: a United Energy trial suggests 450 MW of FD potential • solar PV curtailment (for managing minimum demand or voltage excursions).

The review also excluded the substantial volume of load shaping that could be achieved through improved energy efficiency during peak times.

Comparing the scale of potential FD resources above with peak demand on the NEM (~35,000 MW), this study concludes that there is ample FD resource potential to materially contribute to the reliability and efficiency of the Australian electricity system.

How much could flexible demand be worth to Australian consumers?

We analysed the potential value of 1000 MW of ‘market participating’ FD resource for the purpose of estimating the value of the national FD opportunity. This target is seen as modest and hence eminently achievable. This ‘last GW’ resource would effectively dampen the worst impacts of infrequent but high cost events in the electricity system.

Unlike much of current FD participating in RERT (deployed only when there is an emergency), this FD would be continuously and actively engaged in various segments of the electricity system (wholesale, network, FCAS etc.) and responsive to signals (price or non-price). Thus, it would harvest revenue from multiple value streams (value-stacking).