Victorians will be paid to cut energy during extreme heat, peak demand this summer

VICTORIANS will be paid to turn down their airconditioners during extreme heat or times of peak power demand this summer in an effort to avoid large-scale blackouts.

Victorians will be paid to turn down airconditioners during extreme heat or at times of peak power demand in an effort to avoid large-scale blackouts this summer. Picture: iStock

VICTORIANS will be paid to turn down airconditioners during extreme heat or at times of peak power demand in an effort to avoid large-scale blackouts this summer.

This strategic “demand management” approach to power use — already widely used overseas — will be one of the measures taken to keep the lights on in Victoria.

Australia’s energy market operator revealed this week that both Victoria and South Australia needed to take urgent measures to avoid an increased risk of energy shortfalls in the coming months.

Under the plan, Victorian households and businesses would be able to volunteer to use less energy, for a discount on their bill, when the national power grid is under stress.

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Macca’s view.

Energy providers who will take part in the $30 million trial — run by the Australian Energy Market Operator and the Australian Renewable Energy Agency — will be announced in late October.

The scheme would provide incentive payments to consumers who volunteer to be on standby to cut their power use — for as little as 30 minutes — during emergencies or on days of high electricity demand.

This could involve consumers turning down airconditioners or cutting backyard pool pumps for a short period, in return for credits on their bill.

This could potentially cut up to $500 off an annual household power budget.

Energy retailers will decide how to recruit customers and the discount rate.

Industry sources say that if widely adopted, the policy could deliver about 3000 megawatts of power to the national grid, potentially making it unnecessary to build gas-fired plants that would be called on only occasionally.

Victorians will be paid to turn down airconditioners during extreme heat or at times of peak power demand in an effort to avoid large-scale blackouts this summer. Picture: iStock

Victorian Energy Minister Lily D’Ambrosio told the Herald Sun demand management had been put in place briefly in July, 2014 under the former Liberal government.

The Herald Sun understands Victoria will not follow South Australia’s decision to use large-scale diesel generation this summer for temporary back-up power.

Instead it will work with the AEMO, which will compensate businesses who feed power from their private generators into the grid when emergency power is required.

The recent closure of Hazelwood power station has led to a “tight” supply and demand balance in the national electricity market, which is more vulnerable than ever to the loss of output.

Chief Scientist Alan Finkel, in his review into Australia’s future energy security, said demand management could be rolled out rapidly.

“Making better use of demand response in the National Energy Market represents a low cost and as yet underdeveloped opportunity to maintain reliability,” he said.

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The Australia Institute executive director Ben Oquist said demand response could allow consumers to not only save money but make money this summer, while also helping to stabilise the power grid.

“Consumers could be paid $25 a pop just to turn down their airconditioner and pool pump for a couple of hours,” he told the Herald Sun.

“This should be the focus of our energy debate, not what happens to an ageing coal plant in NSW in 2022.”

The Australian Renewable Energy Agency said energy providers, retailers, large industrial customers and technology firms had applied to take part in a three-year demand response trial from December.

They are expected to run a variety of demand response programs that will involve both industrial, commercial and residential consumers.

AEMO chief executive Audrey Zibelman has said that power demand management at peak periods had proved cost-effective and could help avoid blackouts.

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