Demand response: what is it, how it can help you save money and stabilise the energy grid

The way we use energy in the home is rapidly changing thanks to technology such as smart devices, rooftop solar and batteries. As this “distributed generation” continues to grow, we see a new world of potential where energy can be smarter, more responsive, and cleaner.  

Written By Brendan Manzie, Future Energy at Origin 

What is demand response?  

Imagine being rewarded to reduce your energy use at peak times by doing something as simple as  turning your air-conditioning down a few degrees. That’s demand response.  

Demand response involves customers voluntarily reducing their electricity usage (or shifting their usage to another time) through actions like using the washing machine or dryer later in the evening once the peak has passed and demand for energy is lower. 

Customers can also automate their actions by giving permission to their electricity retailer or distributor to turn down their appliances remotely through a smart plug or device.  

How demand response can make our energy grid more reliable 

To understand the role of demand response, let’s take a step back and look at how energy demand has changed across Australia’s energy market.  

The growth of renewable energy in the National Energy Market (NEM) has changed the supply and demand balance across the day. 

Energy demand in the middle of the day used to be met by large coal and gas-fired power stations. Now in the middle of the day when the sun is shining – a large amount of demand is being met by solar and wind.  

This means traditional coal and gas-fired power plants are required less during the day – but they are still integral in times of peak demand and when the sun isn’t shining, such as in the evening. 

This means more variability in supply across the energy system – and a juggling act to manage the balance between supply and demand, given it is not easy to turn large baseload power stations up and down according to demand.  

Demand response can help to make electricity systems flexible and reliable because the saved energy from customers collectively reducing their use can be a quick and cost-effective way to reduce the demand for electricity at peak times. This provides an alternative to increasing the amount of electricity being generated or building new power plants, and is a more efficient use of energy already in the system. 

What is Origin doing? 

Through our Future Energy team, we have evaluated over 2,000 companies over the past three years to find great ideas to make energy easier and smarter for our customers. 

Recently we partnered with a US energy tech start-up OhmConnect to make demand response easy – and fun – for customers.  

Who is OhmConnect? 

OhmConnect already has more than 500,000 customers across the US and Canada who participate in regular, energy saving events.  

Customers are given an energy reduction target to achieve, and are rewarded with prizes, cash, or the opportunity to redeem for smart devices that can automate further energy efficiencies. 

The platform was developed by some of the people behind Zynga games – the creators of Farmville and Words with Friends – by applying the same scaled gamification logic to energy efficiency.  

Last US summer alone, they paid customers more than US$3.2 million in rewards for a reduction of over 387MWh in electricity demand – equivalent to charging 34 million smartphones!  

What does this mean for Origin customers? 

Origin is working with OhmConnect to launch a demand response platform for our smart meter customers. Look out for more details here very soon.  

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