Demand Management Plan - April 2020 - Energex

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Demand Management Plan - April 2020 - Energex
Demand
Management Plan
April 2020
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

Contents
EGM message                                                     3
Introduction                                                    4
About us                                                        5
Demand management                                               6
  What is it?                                                   6
  Customers participating in our DM program                     7
Challenges and opportunities shaping our strategies and plan    8
  Customer value                                                8
  Demand outlook                                                8
  Renewables                                                    8
  Climate change                                                8
  Fringe of grid                                                8
  Electrification of transport                                  9
  Customer expectations                                         9
  Regulation and policies                                       9
  Case study – Electric Vehicles (EVs): Discovering customer
  charging and energy use                                       10
Our strategy and plan                                           11
  Overview                                                      11
  Our principles                                                11
  Our strategies and initiatives                                12
  Our program                                                   13
  Case study – Market delivered Demand Response (DR)            14
DM program budget and targets for 2020-21                       15
  COVID-19 impacts                                              15
  Energex forecast expenditure and targets                      15
  Ergon Energy forecast expenditure and targets                 15

                                                      2
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

                              Message from
                              our Executive
Across the globe, a renewable         expertise and key partnerships,
energy revolution is unfolding.       we are well placed to deliver
This is an exciting time that         best practice DM and to continue
presents both challenges and          evolving our strategies and
opportunities. During this time,      approach to adapt to a high
networks must remain focussed         penetration DER future.
on safety; affordability; enabling
                                      Finally, I would like to thank all
connection and optimisation of
                                      the customers, industry partners
distributed energy resources
                                      and DM providers already
(DER); maintaining security and
                                      participating in our DM Program.
reliability and most importantly,
                                      We are only as strong as these
understanding and delivering
                                      partnerships. I look forward to
what our customers value.
                                      working with our existing and
Demand Management (DM)                new customers and partners
will continue to be important,        during 2020/21 and beyond.
particularly as the amount of
variable generation, transport
electrification and climate
variability increases. DM will also
complement the roll-out, where
cost effective, of alternative
energy supply solutions to            Peter Price
customers (for example, in Fringe
                                      Head of Corporate Strategy,
of Grid areas).
                                      Executive General Manager
The recent merger of Energex          Strategy, Asset Safety and
and Ergon Energy has                  Performance
strengthened our position as the
largest DM program in Australia.
With our depth of experience,

                                                      3
Demand Management Plan - April 2020 - Energex
Introduction
Each year Energex and Ergon           • are cost efficient – working with   • help achieve the Queensland
Energy publish a Demand                 customers, DM providers and           renewable energy target –
Management Plan (DM Plan) to            industry partners to deliver cost     by enabling connection of
engage and inform our customers,        efficient initiatives to reduce       distributed energy resources
DM providers and industry               peak demand and improve               (DER) to the grid
partners on our planned DM              network utilisation                 • are fair and equitable – by
Program for the next five years. It   • improve safety, security and          unlocking the value of DM
forms part of a suite of strategies     reliability – by coordinating         services for all, not just those
to deliver safe, affordable,            network and customer                  with direct access to DER.
secure and sustainable energy           resources to work together
solutions. Consistent with Energy                                           The DM plan meets Energex
                                      • activate the market and             and Ergon Energy’s regulatory
Queensland’s purpose, the DM
                                        transition – by paying for DM       requirements under section
Plan outlines initiatives that:
                                        services where they provide         127C the Queensland Electricity
• are customer centric –                value and responding to             Regulation, which requires an
  supporting customers in their         regulatory and market changes       annual DM Plan to be submitted
  energy choices
                                                                            for each upcoming year.

                                                      4
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

About us                                                                                                                                                                                                    Our network
We are proudly part of the                                                                                  centres to remote communities
Energy Queensland Group, a                                                                                  of outback Queensland and the                                                                                     7,247
Queensland Government owned                                                                                 Torres Strait. Energex’s network                                                                              employees
organisation, and together                                                                                  supplies electricity to homes
we strive to deliver on our                                                                                 and businesses in the South East
                                                                                                                                                                                                                                         34
                                                                                                                                                                                                                                                       stand-alone and
vision to energise Queensland                                                                               region of the State. The South                                                                                                             grid-connected
                                                                                                                                                                                                                                                       power stations
communities. As Energex and                                                                                 East Queensland region includes
Ergon Energy, our role is to                                                                                the major urban areas of Brisbane,
operate the distribution networks                                                                           Gold Coast, Sunshine Coast,
across Queensland. The Energex                                                                              Logan, Ipswich, Redlands and                                                                    220,000km
and Ergon Energy electricity                                                                                Moreton Bay.                                                                                    powerlines
distribution networks cover 1.7
million km2 across Queensland.                                                                                                                                                                                                                     1.7 million
Ergon Energy supplies electricity                                                                                                                                                                                                                       power poles
to homes and businesses over a

                                                                                                                                                                                                                                             3
vast area covering around 97% of                                                                                                                                                                                                                    network control
the State – from coastal and rural                                                                                                                                                                                                                  centres

                                                                                                                                                                                                            2.3 million
                                                                                                                                                                                                            connected customers

Our service area
                                                                                                                                                                                                                                          34,500GWh
                                                                                                                                                                                                                                 electricity delivered a year
                                                                                                      Boigu Is.                Saibai Is.
                                                                                                                Dauan Is.              Stephens Is.

                                                                                                                                    Yorke Is.         Darnley Is.                                           5,086MW                                   2,612MW
                                                                                                     Mabuiag Is.
                                                                                                                         Yam Is.
                                                                                                                                                        Murray Is.
                                                                                                                                                                                                           South East                                 Regional
                                                                                                                                               Coconut Is.
                                               Bamaga                                           Badu Is.
                                                                                                                                   Warraber Is.                                                            Queensland                                 Queensland
                                                                                               Hammond Is.
                                                                                                                  Kubin, Moa Is.
                                                                                                                                                                                                           peak demand                                peak demand
                            Mapoon                                                         Thursday Is.            Wasaga, Horn Is.

                         Napranum

                                                                                                                                                                                                                                                   587,392
                                                        Lockhart River
                                                                                                                                     TORRES STRAIT
                           Aurukun

                                               Coen                                                                                                                                                                                                solar energy
                                                                                                                                                                                                                                                   systems connected
                                      Pormpuraaw

                                                                                                                                                                                                            3,365MW
                                       Kowanyama                              Cooktown

Gununa, Mornington Is.                                                                                                                                                                                      renewables
                                                                                 Mossman
                                                                                                                                                  Regional network - Ergon Energy Network
                                                                                                                                                                                                            connected
                                                                                    Cairns
                                                                    Mareeba
                                                                                                                                                  Isolated supply - Ergon Energy Network
 Burketown                                                           Atherton
                               Normanton                                                Innisfail
       Doomadgee                                                 Ravenshoe                                                                        Ergon Energy Retail
                                                                                       Tully
                                     Georgetown
                                                                                                                                                  South East Network - Energex
                                                                              Ingham
                                                                                                     Palm Island

                                                                                                    Townsville
                                                                                                         Home Hill
 Camooweal
                                 Julia Creek                         Charters Towers                    Bowen
     Mt Isa     Cloncurry                                        Hughenden                                              Proserpine
                                            Richmond                                                                                                                                                                    Gympie

                                                                                                           Pinnacle          Mackay
                                                                                                                                                                                                                              Noosa
                                                                                                                              Sarina
                                                                                                                                                                                                                         Nambour
                                                                                                       Moranbah
                                                        Winton                                                                                                                                                        Maroochydore
                                                                                                             Clermont                                                                                                     Caloundra
                  Boulia
                                                                                                     Middlemount              Yeppoon                                                                      Kilcoy             Woodford
                                                Longreach                                                                                       Rockhampton
                                                                                                      Emerald                                                                                                          Caboolture
                                                                      Barcaldine                                         Blackwater               Gladstone                                          Toogoolawah
                                                                                                                                                                                     QUEENSLAND
                                                                                                 Springsure                                                                                                               Redcliffe
              Bedourie                                                                                                             Biloela             Miriam Vale                                         Esk
                                                                                Blackall                                 Moura          Monto
                                                        Jundah                                                                                    Gin Gin      Bundaberg                                   Fernvale
                                                                                                                                                                                                                                 Brisbane
                                                                                                                        Theodore
                                                                                                                                                   Childers
                                                  Windorah                                                                                                          Hervey Bay                    Gatton
                                                                                                                                                Biggenden                                                           Ipswich
                                                                                                                                                                    Maryborough
              Birdsville                                                                                                    Mundubbera                                                                                        Beenleigh
                                                                                                                                                Gayndah
                                                                                   Charleville                                                                 Kilkivan
                                                          Quilpie                                                  Wandoan                                                                                                    Surfers Paradise =
                                                                                                                                       Kingaroy         Murgon
                                                                                                           Roma
                                                                                                                            Chinchilla                    Yarraman                                                  Boonah      Beaudesert
                                                                                                                                                                                            QUEENSLAND
                                                                                                                            Tara      Dalby        Toowoomba

                                                              Cunnamulla                                                             Millmerran               Brisbane
                                                                                                    St George                                                                                                       NEW SOUTH WALES
                                                                                                                                           Warwick
                                                                                                                                        Stanthorpe

                                                                                                                                                              5
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

DEMAND MANAGEMENT
What is it?
Demand Management (DM) is                   response to growing DER in the          customers with tools that enable
part of our suite of solutions              network, DM must evolve to              them to manage their demand
for network management                      include consideration of these          and consumption to reduce their
which may be used instead of                customer assets to optimise end-        electricity costs.
or in conjunction with network              to-end investment.
                                                                                    There are three major DM
expenditure, to ensure an
                                            DM can also be particularly             approaches as outlined in the
optimised investment outcome.
                                            valuable when there is uncertainty      table 1 and shown in figure 1.
In the context of electricity
                                            in demand growth forecasts, as
networks, DM is the act of                                                          These approaches are
                                            DM does not lock in long-term
modifying demand and/or                                                             implemented by customers or DM
                                            investment. In these situations,
electricity consumption, for the                                                    providers in exchange for financial
                                            DM can provide considerable
purpose reducing or delaying                                                        incentives via their electricity bill
                                            ‘option value’ and flexibility.
network expenditure (i.e.                                                           or directly from networks.
removing or delaying a network              DM solutions are also known
constraint). This definition                                                        DM must be deployed to match
                                            as non-network solutions as
recognises that DM need not be                                                      the temporal (i.e. how often and
                                            they provide an alternative to
specific to removing network                                                        what duration) and spatial (i.e.
                                            network solutions. In the Energex
constraints only at times of peak                                                   what level of the network and how
                                            and Ergon Energy context,
demand. Rather that network                                                         many customers are affected)
                                            DM involves working with our
constraints also include retirement                                                 nature of the network constraint.
                                            customers and DM providers to
or replacement of an aging asset;                                                   As more DER is connected to our
                                            modify demand and/or energy
redundancy support during                                                           network, the temporal and spatial
                                            consumption as an alternative
equipment failure; minimum                                                          nature of network constraints
                                            to capital expenditure. The more
demand and associated issues                                                        will change. As such, our DM
                                            capital expenditure that can be
with voltage, system frequency                                                      capability will need to adapt to
                                            deferred or avoided, the greater
and power quality management;                                                       suit these new and emerging
                                            the savings to our customers.
managing diverse power flows                                                        network constraints.
                                            Furthermore, DM provides
and system security issues. In

                                                                                    Peak shaving
     DM Approach         Description                                Type of DM

                         Reducing demand at peak period (e.g.
 1   Peak shaving
                         Using onsite generation)

                         Shifting demand to other times of          Demand
                         the day when networks are less             Response (DR)   Load shifting
 2   Load shifting       constrained (e.g. Load control tariffs).
                         Load shifting can be used to manage
                         peak demand and minimum demand.

                         Use less electricity to perform the        Energy
 3   Energy efficiency
                         same task.                                 efficiency
                                                                                    Energy efficieny
Table 1: DM Approaches

                                                                                        Typical residential customer load profile
                                                                                        Load after demand management measure

                                                                                    Figure 1: Demand Management Approaches

                                                                6
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

Customers participating in our DM program
Our DM Program is only as strong as our partnerships with customers, industry partners and DM providers.

                                                                                 Energex network   Ergon Energy
    Number of Customers
                                                                                      area         network area
    Customers with load control tariff#                                                 711,256       408,219

    Customers with PeakSmart air conditioners#                                          74,579         4,341

    Customers who have reduced demand in Target areas*                                   548           256
#
  As at 31 March 2020 and reported to AEMO
*Includes contracted demand response (non-network generation contracts)

     Premises with controlled load
     Premises with PeakSmart
     Premises with reduced
     demand in Target Areas

Figure 2: Energex and Ergon Energy
Managing Demand in Queensland

                                                                          7
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

CHALLENGES AND
OPPORTUNITIES SHAPING
OUR STRATEGIES AND PLAN
Customer value                        Renewables                               Climate change
• Affordability remains a core        • The Queensland government              • Climate change is increasing
  concern for many customers.           has set a target to achieve 50%          the probability of extreme
  Energex and Ergon Energy              renewable energy by 2030.                weather events and average
  are committed to doing all we       • The connection of solar energy           temperatures. The economic
  can to take the pressure off          continues to grow across both            implications on our electricity
  electricity prices by continuing      networks. During 2018-19,                networks are potentially
  to drive down our cost of             rooftop solar PV was being               significant and therefore
  distributing electricity.             connected to our South East              necessitates increasing network
                                        network at a rate of over 2,900          adaption and resilience, while
                                        systems per month. In Regional           also ensuring we can respond
Demand outlook                          Queensland the volume of new             quickly and safely during and
                                                                                 after extreme weather events.
                                        solar PV connections in 2018-19
• Peak demand continues to              was almost 50% higher than in
  increase, albeit at a lower rate.     the previous 12 months, with the
  Our network experienced               total solar PV capacity added
                                        being 300% higher due to the
                                                                               Fringe of grid
  record levels of peak demand
  in the summers of 2017, 2018          connection of several large solar
                                                                               • Many of our customers in
  and 2019. Discrete areas of           farms. The future intention of
                                                                                 remote areas of Queensland are
  the network are experiencing          customers to install solar PV is
                                                                                 serviced by low density three
  strong growth, requiring              strong, with 48% of households
                                                                                 phase or Single Wire Earth
  augmentation projects to              stating that they will have or
                                                                                 Return (SWER) technology. Our
  address demand growth.                intend to have a system in the
                                                                                 SWER network is the largest in
                                        next three years1.
• Changes to energy flows and                                                    the world and includes 65,000
  demand are occurring due to         • A growing number of                      km of line. Around 4% of
  growing numbers of DER and            households are installing a              Ergon Energy’s customers are
  new technologies interacting          battery as part of their solar           provided electricity via SWER.
  with the grid. New daily load         PV installation. Around 1% of all
                                                                               • DER (e.g. solar pump) and/
  profiles are emerging with            solar PV installations also have a
                                                                                 or Stand-Alone Power
  the ‘hollowing out’ of demand         battery installed and almost one
                                                                                 Systems (SAPS) can provide,
  during the middle of the day          in three Queensland households
                                                                                 in some cases, cost effective
  due to distributed solar PV           intend to install a battery
                                                                                 alternatives to network
  generation.                           storage system in the next 10
                                                                                 delivered electricity supply.
                                        years (28%)2. It is expected
                                        that customers with batteries          • Changes in regulation are
                                        will increasingly participate in         currently under consideration
                                        Virtual Power Plants (VPPs) and          that enable distributor and third
                                        provide DR services from their           party led SAPS to be installed
                                        battery to DR aggregators.               where economically efficient.

                                      • A critical challenge for electricity
                                        networks is the ability to host
                                        increasing levels of DER. This
                                        will require collaboration with
                                        industry, evolution in connection
                                        standards, investment in smart
                                        grid technologies and digital
                                        platforms to better manage the
                                        high penetration of DER.

                                                        8
Demand Management Plan - April 2020 - Energex
Demand Management Plan 2020-21

Customer                                                  Electrification of                                Regulation
expectations                                              transport                                         and policies
• From our stakeholder                                    • In Australia, there has been a                  • This DM Plan is consistent
  engagement, we heard that                                 very slow uptake of electric                      with national regulations
  there is strong support for                               vehicles to date, but this is                     aimed at encouraging network
  continuing our DM Program.                                expected to increase. This                        businesses to make efficient
  Key expectations from our                                 is due to transport modes,                        planning, investment and
  customers and stakeholders                                including fleet vehicles                          expenditure decisions and to
  include:                                                  and public transport, being                       explore non-network options,
      • To partner with them to                             increasingly electrified globally.                including
        manage network demand                               This coupled with increasing                      • Distribution annual planning
        into the future                                     affordability of Battery Electric                   – refer to our Distribution
                                                            Vehicles (BEV) battery packs,                       Annual Planning Review and
      • To continue to provide
                                                            will see greater future uptake                      Reports (DAPRs) – Energex
        incentives to customers and/
                                                            of BEVs in Queensland, driving                      DAPR and Ergon Energy
        or DM providers to provide
                                                            greater electricity demand                          DAPR
        DM solutions
                                                            across the state.
      • To extend the eligibility                                                                             • Demand Side engagement
                                                          • At the end of June 2019, there                      obligations – refer to our
        of load control tariffs to
                                                            were 1,000 BEVs and almost                          Demand Side Engagement
        other customer groups (e.g.
                                                            as many Plugin Hybrid Electric                      Strategy
        agriculture, large commercial
                                                            Vehicle (PHEVs) registered in
        and industrial) to help                                                                               • Regulatory investment
                                                            Queensland. With the recent
        manage network demand                                                                                   test for distribution
                                                            release of several new models,
      • To facilitate the integration                                                                           (RIT-D) – refer to Energex
                                                            this has grown to just under
        of renewables into the                                                                                  consultations/Ergon Energy
                                                            2,000 BEVs and 1031 PHEVs
        network                                                                                                 consultations
                                                            (29 February 2020). By June
      • To help provide products                            2021, it is forecast there                      • This DM Plan is also consistent
        and solutions to manage                             will be around 6,500 EVs in                       with national electricity
        their energy, demand and                            total (PHEVs and BEVs) in                         reforms currently underway
        prices                                              Queensland.                                       aimed at delivering customer-
                                                                                                              oriented electricity network
                                                          • If EV charging is unmanaged,
                                                                                                              transformation.
                                                            the additional load on the
                                                            network is likely to coincide
                                                            with the existing evening peak.
                                                            Initial insights indicate owners
                                                                                                            Intelligent Grid
                                                            of electric vehicles nearly                     Enablement
                                                            always charge at home (83%),
                                                            with many able to control when                  • The electricity market is
                                                            they charge (54%)3.                               evolving which presents
                                                          • Vehicle to Grid (V2G) charging                    a transition challenge for
                                                            technology, whilst at an early                    all participants, both new
                                                            stage of development, is                          and existing. A successful
                                                            expected to provide a range of                    transition will enable networks
                                                            energy services including DR in                   to integrate sophisticated
                                                            the future.                                       energy management platforms
                                                                                                              provided by new market
                                                                                                              participants with their existing
1
    Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)
                                                                                                              distribution management
2
    Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)
3
    Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=46)        systems.

                                                                                 9
Demand Management Plan 2020-21

CASE STUDY
Electric Vehicles (EVs):
Discovering customer charging and energy use
To plan for network impacts
associated with Electric Vehicles
(EVs) we have partnered
with the EV monitoring and
charge management provider,
Fleetcarma to undertake a
research program on customer
charging behaviour; both at home
and away from home.

The research funded by the
Demand Management Innovation
Allowance Mechanism (DMIAM)
will involve up to 200 EV owners
(battery only and plug-in hybrid),
with cars registered within
Queensland. Those participating
in the research will receive $100
and gain access to an online
portal to see their charging and
trip activity. An additional $100
will also be available for those
owners who allow charging            The study will give invaluable   the demand on the network
management of their EV. A range      information on how EV owners     over time. These patterns will
of different EVs will be selected,   use their vehicle and their      be used for network planning
as well as, different households     approach to “refuelling” with    to ensure that, as the EV
(e.g. with and without solar PV      electricity. This information    market grows, the network is
and batteries).                      will then be used to             able to meet the new demands
                                     generate baseline electricity    being placed on it.
                                     consumption profiles, showing

                                                    10
Demand Management Plan 2020-21

OUR STRATEGY
AND PLAN
Overview                                                               Our principles
The DM Plan for 2020-21 sets out                                       Our six guiding principles,
how we will continue to work with                                      that underpin the DM Plan, are
our customers, DM providers and                                        based on the Energy Network
industry partners over the coming                                      Transformation Roadmap
year. Our plan is ultimately about                                     (ENTR)4 balanced scorecard.
reducing network costs through                                         These principles have been used
implementing effective and                                             to prioritise our initiatives and
efficient DM activities. We will                                       activities. See figure 3 below.
build on our existing initiatives
                                                                       4
                                                                           https://www.energynetworks.com.au/projects/
and deliver on our goal of
                                                                           electricity-network-transformation-roadmap/
providing a secure and reliable
network. We will continue to listen
to our customers, DM providers
and industry partners and
continuously strive to innovate to
future proof our DM Program.

                                                 Customer centric –
                                                 supporting end use                     Cost efficient –
                                                  customers in their                 working with end use
                                                   energy choices                   customers and industry
                                                                                    partners to reduce peak
          Queensland                                                                 demand and improve
      renewable energy                                                               network utilisation to
       target – enabling                                                               keep costs down
         connection of
      distributed energy
       resources (DER)
           to the grid                                                                                        Signalling the market
                                                                                                                – paying for DM
                                                                                                              services where they
                                                                                                                  deliver value
                                                                           LO ALU
                                         N Y

                                                                             V
                                     TI RG

                                                                             W ED
                                                                               ER
                                   SI E
                                  N N
                                       O

                                                                                  B ER
                                 A E

                                                                                   IL V
                              TR AN

                                                                                     S
                                                                                     LS IC
                                LE

                                                                                       FO ES
                              C

                                                                                         R

                                                CUSTOMER CHOICE
                                                  AND CONTROL
                              SA AN

                                                                                    S D
                                FE D S

                                                                                  VE N
                                                                                TI S A
                                  ,R E
                                    EL CU

                                                                              EN S
                                                                             C E
                                       IA RE

                                                                           IN IRN
                                         B
                                           LE

                                                                            FA

                                                                                                          Fair and
     Improve safety,                                                                               equitable – unlocking
 security and reliability –                                                                         the value of demand
     by coordinating                                                                             response for all end use
  network and customer                                                                               customers, not just
    resources to work                                                                              those with distributed
         together                                                                                     energy resources

Figure 3: Our principles

                                                                                                     11
Demand Management Plan 2020-21

Our strategies and initiatives

                                                                              Our Program       Related Initiatives
Strategy                                                                     DM Initiatives –     – what we will
                                                                             what we will do         support

Ensure efficient investment decision making                                    Broad based      Investment Planning
                                                                                                      Process
We will continue to engage with customers and DM providers to seek DM           Targeted
solutions to provide cost-effective alternatives to network options.
This approach will enable us to leverage investment across the electricity
supply chain and deliver efficient, well planned network expenditure and
apply downward pressure to network prices in the longer term.

Incentivise customer efficiency                                                Broad based      Investment Planning
                                                                                                      Process
We will continue to provide incentives to customers and DM providers to         Targeted
provide DM solutions as part of our approach for delivering efficient non
network options to defer, avoid or complement network investment.
In the medium term, ’smart’ DER (e.g. demand responsive batteries or BEVs)
are expected to provide an increasing proportion of DM solutions, either
directly or via DR aggregators.

Active customer response enablers                                            DM Development       Intelligent Grid
                                                                                                    Enablement
We will maintain direct control of customer loads using our existing Audio
Frequency Load Control (AFLC) capability. We will complement this
capability, where cost efficient, by procuring and dispatching DR.
The procurement and dispatch of DR will require investment in intelligent
grid technologies and digital platforms. This will be implemented as part
of Energex and Ergon Energy’s broader ‘Intelligent Grid Enablement’
investment plans.
This enhanced capability will reduce network augmentation requirements
and increase DER hosting capacity.

Manage two-way energy flows                                                  DM Development       Intelligent Grid
                                                                                                    Enablement
We will trial and test DM solutions to increase DER hosting capacity while
maintaining reliability and power quality performance at statutory levels.
This is in line with our customer expectations and the Queensland
Government target of achieving 50% renewable energy by 2030.

Transforming supply at the fringe of grid                                    DM Development        Fringe of Grid
                                                                                                  Transformation
We will continue to look for opportunities for DM to reduce the cost of
electricity supply in remote areas.
DM can be used to reduce the size and cost of customer DER and stand-
alone power systems (SAPS) and form part of an integrated, cost-effective
alternative to traditional network solutions.

Support our Program by investment in innovation                                  DMIAM                DMIAM
We will continue to undertake innovative trials and projects to test and
validate DM solutions. These trials will be supported by funding available
under DMIAM and will be targeted to accelerate future DM capabilities.

                                                               12
Our program

Description                                      2019-20    2020-21 Focus areas                                    2020-25

Initiative: Broad based

This initiative is available to residential      Existing   •   Continue to reduce costs of delivery.              Proposed
and small business customers across the                     •   Continue to align Ergon and Energex programs          to
whole network. It delivers direct control of                •   Enhance the customer and community experience      continue
loads during periods of extreme demand
                                                            •   Improve PeakSmart application process for Ergon
or emergency response, preventing area
                                                                Installers and industry partners
problems and network outages.
Incentives are provided to customers who
enrol their PeakSmart air conditioners or
connect their appliances to load control
tariffs.
Incentives are also given to industry
partners who install PeakSmart enabled air
conditioners.

Initiative: Targeted

This initiative is available to customers and    Existing   • Continue to align Ergon Energy and Energex           Proposed
DM providers who can deliver DM solutions                     programs                                                to
in specific areas of the network identified as              • Continue to publish incentive maps that show where   continue
having future network constraints.                            DM solutions are required
Market engagement is undertaken to seek                     • Deliver on our Demand Side Engagement Strategy to
DM solutions from customers and DM                            improve market engagement
providers.                                                  • Increase DM solutions (non-network solutions)
                                                              delivered through Investment Planning Processes
Incentives are provided to customers or DM
providers to provide DM solutions.

Initiative: DM Development

This initiative drives continuous                Existing   • Enhance web content on DM activities                 Proposed
improvement of existing initiatives and                     • Enhance web content on electric vehicles                to
enabling future DM capability.                                                                                     continue
                                                            Tariffs
                                                            • Support uptake of new load control tariffs
                                                            • Support wider Ergon Energy/Energex uptake of new
                                                              tariffs
                                                            • Finalise implementation of Queensland Government
                                                              funded Large Customer Adjustment Trial (LCAT) and
                                                              Large Customer Adjustment Program (LCAP)
                                                            Fringe of Grid
                                                            • Pilot customer DM program
                                                            Intelligent Grid Enablement
                                                            • Prepare Load Control Strategy to guide future
                                                               investment in digital platforms
                                                            • Support development of AS/NZS 4755.2. This
                                                               Standard provides framework for DR from customer
                                                               appliances (including air conditioners, BEVs, hot
                                                               water systems and pool pumps)
                                                            • Based on trial results, expand ‘solar soak’ using
                                                               existing AFLC capability to increase DER hosting
                                                               capacity.

Initiative: DMIAM

The initiative supports future energy choices    Existing   • Fringe of grid alternative supply options            Proposed
and DM capabilities that reduce long term                   • Managing network and distributed energy resources       to
network costs.                                                for fringe of grid areas                             continue
A suite of innovative trials and projects                   • Facilitating enhanced distributed energy resource
to test and validate DM products and                          connection
processes are funded via DMIAM.                             • Evaluation of Home Energy Management Systems
                                                            • Electric vehicle customer charging and energy use
Every year progress on DMIAM projects
                                                            • Acquiring load management through energy services
are published, refer to our annual DMIAM
                                                              market
(Energex/Ergon Energy).
                                                            • Integrated urban development energy management

                                                                 13
Demand Management Plan 2020-21

CASE STUDY
Market delivered Demand Response (DR)
As distributed energy resources                          HEMs have the potential to
become more common-place                                 save customers money on their
in homes, we need to better                              electricity bills, give them access
understand the value and                                 to new value opportunities
opportunities they present for                           and improve the use of their
customers and the networks                               renewables, while maintaining
supporting them.                                         their lifestyle. HEMs could also
                                                         deliver benefits to the network
In October 2019, Energex
                                                         through improved load factor
commenced a pilot to trial DR
                                                         and reduced impacts of peak
using home energy management
                                                         generation from solar PV
systems (HEMs) in up to 500
                                                         installations.
households across the Chapel
Hill, North Lakes, Springfield                           Recent research has
Lakes and Wakerley areas. Five                           shown customer interest in
HEMS providers are participating                         HEMs services is greatest
in the pilot, offering varied                            around receiving personal
energy management services and                           recommendations on how to
products.                                                save and being able to remotely
                                                         control appliances to manage
The DMIAM funded pilot
                                                         electricity usage. Over half (54%)
replicates a normal market where
                                                         of survey participants would
HEMS suppliers attract customers
                                                         install a HEMS if it was $200 or
with the inherent value of their
                                                         less5.
offers. Incentives for customer
participation are paid to the                            If successful, both networks
HEMS provider instead of to the                          would be able to complement
end customer.                                            their existing legacy load control
                                                         capability with cheaper, more
The pilot will provide information
                                                         flexible, sophisticated energy
on how HEMS providers can
                                                         management platforms provided
attract customers to take up their
                                                         by energy service providers.
market solutions; the value of
these solutions to the customer
and network; the attractiveness of
set-and-forget “smart” solutions;
and how HEMS technology will
integrate and communicate with
the electricity network.

5
    Energy Queensland, Powerlink (2020) Queensland Household Energy Survey 2019 Insights Report (n=4,536)

                                                                                14
Demand Management Plan 2020-21

DM PROGRAM BUDGET
AND TARGETS FOR 2020-21
COVID-19 impacts
At the time of finalising the DM Plan, the level of impact the COVID-19 pandemic will have on the forecast spend
and achievement of performance targets for 2020-21 is unclear and has not been included in the tables below.

Energex forecast expenditure and targets
The forecast expenditure to                                Operating        Capital            Total       Demand
implement Energex’s DM Program          Initiative        Expenditure     Expenditure       Expenditure   Reduction   $/kVA
for 2020-21 is estimated at $5.90                           ($,000)         ($,000)           ($,000)       (MVA)
million, as show in Table 3. The
                                        Broad based          3,706              -                3,706      17.8       209
table also provides the breakdown
of performance targets for each         Targeted                1,226           -                1,226      16.3       75
initiative.
                                        DM
Future year MVA demand                                          970             -                970         n/a       n/a
                                        Development
reductions may also change year         Total for
to year dependent on program                                 5,902              -                5,902      34.1       n/a
                                        DM Program
focus and customer uptake of
                                        DMIAM                   1,100           -                1,100       n/a       n/a
new technologies.

                                       Table 3: Energex direct costs (excludes overheads)

Ergon Energy forecast expenditure and targets
The forecast expenditure to                                Operating        Capital            Total       Demand
implement Ergon Energy’s DM             Initiative        Expenditure     Expenditure       Expenditure   Reduction   $/kVA
Program for 2020-21 is estimated                            ($,000)         ($,000)           ($,000)       (MVA)
at $5.09 million, as show in
                                        Broad based             841             -                 841        3.5       242
Table 4. The table also provides
the breakdown of performance            Targeted                3,713           -                3,713      26.3       141
targets for each initiative.
                                        DM
Future year MVA demand                                          543             -                543         n/a       n/a
                                        Development
reductions may also change year         Total for
to year dependent on program                                 5,097              -                5,097      29.8       n/a
                                        DM Program
focus and customer uptake of
                                        DMIAM                   1,100           -                1,100       n/a       n/a
new technologies.

                                       Table 4: Ergon Energy direct costs (excludes overheads)

                                                           15
ergon.com.au
energex.com.au
Ergon Energy
PO Box 1090
Townsville QLD 4810
Energex Limited
                      2-20-0139

GPO Box 1461
Brisbane QLD 4001
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